EKSO BIONICS HOLDINGS, INC. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Form 10-Q)

In this Quarterly Report, the "Company", "we", "its" and "our" refers to Ekso
Bionics Holdings, Inc. and its wholly-owned subsidiaries. The following
discussion of our financial condition and results of operations should be read
in conjunction with the condensed consolidated financial statements and the
notes thereto included elsewhere in this Quarterly Report on Form 10-Q for the
quarter ended September 30, 2022 (this "Quarterly Report") and in our Annual
Report on Form 10-K for the fiscal year ended December 31, 2021, which is
incorporated herein by reference (the "Annual Report").

This Quarterly Report contains forward-looking statements. These forward-looking
statements include statements other than statements of historical facts
contained or incorporated by reference in this Quarterly Report, including
statements regarding (i) the plans and objectives of management for future
operations, including those relating to the design, development and
commercialization of exoskeleton products for humans, (ii) a projection of
income (including income/loss), earnings (including earnings/loss) per share,
capital expenditures, dividends, capital structure or other financial items,
(iii) our future financial performance, including any such statement contained
in a discussion and analysis of financial condition by management or in the
results of operations included pursuant to the rules and regulations of the SEC,
(iv) our beliefs regarding the potential for commercial opportunities for
exoskeleton technology in general and our exoskeleton products in particular,
(v) our beliefs regarding potential clinical and other health benefits of our
medical devices, and (vi) the assumptions underlying or relating to any
statement described in points (i), (ii), (iii), (iv) or (v) above. The words
"may," "might," "would," "should," "could," "project," "estimate," "pro-forma,"
"predict," "potential," "strategy," "anticipate," "attempt," "develop," "plan,"
"help," "believe," "continue," "intend," "expect," "future," and similar
expressions (including the negative of any of the foregoing) are intended to
identify forward-looking statements.

The following factors, among others, including those described in the section
titled "Risk Factors" included in our Annual Report, as updated and supplemented
in this Quarterly Report under the heading "Part II - Item 1A. Risk Factors,"
could cause our future results to differ materially from those expressed in the
forward-looking information:

•our ability to obtain adequate financing to fund operations and to develop or
enhance our technology;
•our ability to obtain or maintain regulatory approval to market our medical
devices;
•our ability to complete clinical trials on a timely basis and that completed
clinical trials will be sufficient to support commercialization of our products;
•the anticipated timing, cost and progress of the development and
commercialization of new products or services, and improvements to our existing
products, and related impacts on our profitability and cash position;
•our ability to effectively market and sell our products and expand our
business, both in unit sales and product diversification;
•our ability to achieve broad customer adoption of our products and services;
•existing or increased competition;
•rapid changes in technological solutions available to our markets;
•volatility with our business, including long and variable sales cycles, which
could have a negative impact on our results of operations for any given quarter;
•changes to our domestic or international sales and operations;
•our ability to obtain or maintain patent protection for our intellectual
property;
•the scope, validity and enforceability of our and third-party intellectual
property rights;
•significant government regulation of medical devices and the healthcare
industry;
•our ability to receive regulatory clearance from certain government
authorities, including any conditions, limitations or restrictions placed on
such approvals;
•our customers' ability to get third-party reimbursement for our products and
services associated with them;
•the potential for our products to be subject to voluntary or involuntary
recall;
•our product liability insurance may not adequately cover potential claims;
•warrant claims and our accelerated maintenance program results in additional
operating costs to us;
•our failure to implement our business plan or strategies;
•our ability to successfully consummate acquisitions on acceptable terms and to
integrate any such acquisitions;
•our early termination of leases, difficulty filling vacancies or negotiating
improved lease terms;
•our ability to retain or attract key employees;
•scope, scale and duration of the impact of outbreaks of a pandemic disease,
such as COVID-19 (coronavirus);
•stock volatility or illiquidity;
•our ability to maintain adequate internal controls over financial reporting;
•the impacts of foreign currency price fluctuations; and

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•overall economic and market conditions.

Although we believe that the assumptions underlying the forward-looking
statements and forward-looking information contained herein are reasonable, any
of the assumptions could be inaccurate, and therefore, such statements and
information included in this Quarterly Report may not prove to be accurate. In
light of the significant uncertainties inherent in the forward-looking
statements and forward-looking information included herein, the inclusion of
such statements and information should not be regarded as a representation by us
or any other person that the results or conditions described in such statements
and information or that our objectives and plans will be achieved. Such
forward-looking statements speak only as of the date of this Quarterly Report.
Except as required by law, we undertake no obligation to update any
forward-looking statements to reflect events or circumstances after the date of
such statements.

Overview

Our Business

We design, develop, and market exoskeleton products that augment human strength,
endurance and mobility. Our exoskeleton technology serves multiple markets and
can be utilized both by able-bodied persons and by persons with physical
disabilities. We have sold or leased devices that (i) enable individuals with
neurological conditions affecting gait, including ABI, SCI and MS, to
rehabilitate, and in some cases, to walk again, (ii) assist individuals with a
broad range of upper extremity impairments, and (iii) allow industrial workers
to perform difficult repetitive work for extended periods.

We believe that the commercial opportunity for exoskeleton technology adoption
is accelerating as a result of recent advancements in material technologies,
electronic and electrical engineering, control technologies, and sensor and
software development. Taken individually, many of these advancements have become
ubiquitous in peoples' everyday lives. Supported by an industry leading
intellectual property portfolio, we believe that we have learned how to
integrate these existing technologies and wrap the result around a human being
efficiently, elegantly and safely. We further believe this endeavor is
achievable across a broad spectrum of applications, from persons with lower limb
paralysis to able-bodied users.

EksoHealth

EksoHealth is our business unit focused on the development and commercialization of exoskeletons for medical applications.

Our leading product in EksoHealth, the EksoNR, is a robotic exoskeleton used to
provide physical therapy for patients with lower extremity impairment. EksoNR
includes unique features designed specifically to assist physical therapists and
other clinicians to teach patients to walk again after suffering a neurological
impairment. Typical conditions that can be treated with the assistance of EksoNR
include ABIs, such as stroke and traumatic brain injuries, as well as SCIs, MS,
and others. The benefits of EksoNR rehabilitation can include earlier
mobilization of patients, longer and more intense rehab sessions, and increased
quality of sessions as compared to alternative therapies. EksoNR is typically
used in clinical settings, most commonly at inpatient rehab facilities and
stroke centers.

EksoUE, our exoskeleton device for upper limb medical applications, is a wearable upper body exoskeleton used for rehabilitation. EksoUE is designed to help patients with a wide range of upper limb impairments and aims to provide them with a greater active range of motion and increased endurance for higher intensity rehabilitation sessions.

EksoWorks

EksoWorks is our business unit focused on developing, marketing, and selling
exoskeletons and other assistive tools for industrial applications. Target users
for these devices are generally able-bodied, and, as such, the technologies are
primarily employed to reduce worker fatigue. The benefits of fatigue reduction
can include reduced rates of injuries, higher productivity, increased worker
morale, and lower employee turnover. EksoWorks products are primarily sold to
companies deploying the technologies for use directly in their operations.

Our wearable exoskeleton products in EksoWorks include EksoVest and the new EVO,
both of which are designed to support the weight of a worker's arms and tools
during overhead applications, reducing the fatigue associated with working at or
above shoulder height for extended periods. These products are currently
targeted at end users in the aerospace, automotive, manufacturing, and
construction trades.

Before ceasing marketing of the EksoZeroG support arm and associated products and accessories, at the end of the second quarter of 2022, we manufactured and sold our EksoZeroG tool carrier, which could be mounted on a lifting platform or

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scaffolding. Refer to Note 6. Revenue Recognition in the notes to our condensed
consolidated financial statements included elsewhere in this Quarterly Report on
Form 10-Q for more information.

Third Quarter 2022 Highlights

• Reservation of a total of 33 EksoNR units in the third quarter of 2022

• Declared turnover of $3.3 million in the third quarter of 2022, a 9% year-over-year increase

•Strong cash position of $29.2 million of the September 30, 2022

Economic and industrial trends

Our revenue is highly dependent on market demand for our exoskeleton products.
This market demand is influenced by many factors including the level of
awareness of robotic exoskeleton rehabilitation among the rehabilitation clinics
with significant ABI and SCI populations, the imperatives among construction and
manufacturing companies to drive adoption of improved safety and health
practices, as well as conditions relating to overall economic growth and general
business activity. Difficult and challenging economic conditions, including
growing supply chain issues amidst an increasingly inflationary environment,
could lead to increased price-based competition. In particular, the effects of
such increasing price-based competition may have an especially significant
impact on certain products that we offer, including the EksoNR, which have a
lengthy sale and purchase order cycle because they are major capital expenditure
items and generally require the approval of senior management at purchasing
institutions. Furthermore, our business includes operations in the Americas,
EMEA and APAC, so we are affected by demand for our products in those regions,
as well as the strengthening or weakening of local currencies relative to the
U.S. Dollar.

The COVID-19 pandemic and related public health measures have also materially
affected how we and our customers are operating our businesses, and have
materially affected our operating results, as demand for our exoskeleton
products decreased as many inpatient rehabilitation facilities temporarily
shifted priorities and delayed capital expenditures. While the duration and
extent to which this will impact our future results remain uncertain, we have
seen certain recovery in the demand for our exoskeleton products following the
gradual reopening and recovery of the broader global economy, and we believe the
clinical need for our products has not diminished, as evidenced by clinical data
showing the increased prevalence of strokes during the pandemic. Although
concerns about the emergence of new, more infectious variants of the coronavirus
remain, we have gradually resumed in-person engagements in addition to virtual
meetings with our current and prospective customers through conferences,
training events and educational demos to offer our support and showcase the
value of our Ekso devices. Further, now that our clinical team is fully
vaccinated and are active onsite at U.S. rehab centers, we expect to see an
uptick in live in-person interactions going forward. Although market
uncertainties related to the pandemic make it difficult for us to project the
full impact on our business and customers, we believe that we are
well-positioned to serve our customers when business conditions begin to
normalize.

Throughout the pandemic, our top priority has been to protect the health and
safety of our employees and our consumers. Employees who are essential to the
daily operations are required to work in our facilities where enhanced personal
protective equipment is in place. In addition, we have a hybrid work from home
and office policy for our employees whose jobs can be performed outside of the
office.

Management continues to actively monitor the global situation, including the
geopolitical instability arising out of military conflict and escalating
tensions between Russia and Ukraine, and its effects on our financial position
and operations.

Management Changes

On January 14, 2022, Jack Peurach, our former President and Chief Executive
Officer, notified us of his intention to resign as an officer and member of the
Board of Directors of the Company to pursue other endeavors. On January 20,
2022, our Board and Mr. Peurach reached an understanding regarding his decision
to leave the Company and entered into an Executive Separation and Release
Agreement pursuant to which Mr. Peurach's last day of service as the President,
Chief Executive Officer and as a member of the Company's Board was January 21,
2022.

In addition, our Board of Directors appointed Steven Sherman, who currently
serves and previously had served as the Chairman of our Board, to become Chief
Executive Officer of the Company effective January 22, 2022. Mr. Sherman
continues to serve as the Chairman of the Board of the Company, and Board member
Stanley Stern has been designated the Board's lead

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independent director. Furthermore, our Board of Directors appointed Scott Davis
to become President and Chief Operating Officer effective January 22, 2022.

On March 4, 2022, William Shaw, our former Chief Commercial Officer, notified
our Board of Directors of his intention to resign as Chief Commercial Officer of
the Company effective March 11, 2022 in connection with his retention as an
employee at another company.

On May 23, 2022, John F. Glenn our former Chief Financial Officer, notified the
Company of his decision to resign from his position as the Company's Chief
Financial Officer, effective June 17, 2022, in connection with his retention as
an employee at another public company. Mr. Glenn's resignation is not the result
of any dispute or disagreement with the Company including any matters relating
to the Company's accounting practices or financial reporting. On May 25, 2022,
our board of directors approved the appointment of Jerome Wong as Interim Chief
Financial Officer, effective upon Mr. Glenn's departure. Mr. Wong was approved
by our board of directors as Chief Financial Officer, Corporate Secretary and
Principal Financial Officer on October 26, 2022, after serving as Interim Chief
Financial Officer from May 25, 2022 to October 25, 2022.

Significant Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations
is based upon our condensed consolidated financial statements, which have been
prepared in accordance with U.S. GAAP. The preparation of these condensed
consolidated financial statements requires us to make estimates, judgments and
assumptions that affect the reported amounts of assets, liabilities, revenue and
expenses, and the related disclosure of contingent assets and liabilities. We
base our estimates on historical experience and on various other assumptions
that we believe are reasonable under the circumstances. Our estimates form the
basis for our judgments about the carrying values of assets and liabilities that
are not readily apparent from other sources. Actual results may differ from
these estimates. Our most critical accounting estimates include:

•the standalone selling prices used to allocate the contract consideration to
the individual performance obligations in our device sales arrangements, which
impacts revenue recognition;
•the unobservable inputs and assumptions used by management in estimating the
fair value of our warrant liabilities, which impacts net income or loss;
•the valuation of inventory, which impacts gross profit margins; and
•the estimates made regarding the recoverability of our net deferred tax asset,
which impacts our financial condition.

Autonomous selling prices

Our device sales arrangements contain multiple products and services, most often
including the device(s) and service, both of which we have identified as
distinct performance obligations. Revenue is allocated to each performance
obligation based on its relative standalone selling price. Standalone selling
prices are based on observable prices at which we separately sell the products
or services. If a standalone selling price is not directly observable, then we
estimate the standalone selling prices considering market conditions and
entity-specific factors including, but not limited to, features and
functionality of the products and services, geographies, type of customer, and
gross margin targets. Changes in the relative standalone selling price between
devices and service can have an impact on how transaction prices are allocated
between revenue and deferred revenue.

Responsibilities Related to Warrants

We use the Black-Scholes option-pricing model to value our warrant liabilities
at each reporting period, which requires the input of highly subjective
assumptions, most notably the estimated volatility of our common stock over the
expected term. We use our historical common stock volatility to estimate
expected volatility over the warrant terms. Management must also make uncertain
estimates regarding the likelihood and timing of certain future events for
application of the Lattice Model for the valuation of certain warrants. Changes
in these assumptions could have potential material impacts on the estimated fair
value of warrant liabilities. During the three months ended September 30, 2022,
management made no changes to its estimates regarding the likelihood of future
events, but revised its estimates regarding the timing of future events. We do
not believe the revision resulted in a material impact to the estimated fair
value of warrant liabilities measured using the Lattice Model.


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Inventory Valuation

Inventory is stated at the lower of cost or net realizable value. Cost is
computed using the standard cost method which approximates actual cost on a
first-in, first-out basis. The cost basis of our inventory is reduced for any
products that are considered excessive or obsolete based upon assumptions about
future demand and market conditions. If actual future demand or market
conditions are less favorable than those projected by management, additional
inventory write-downs may be required, which could have a material adverse
effect on the results of our operations.

Deferred tax asset

We estimate a valuation allowance in consideration of the realizability of our
net deferred tax assets, primarily based on our assessment of the timing,
likelihood and amounts of potential future income during which such items become
deductible. It is inherently difficult and subjective to estimate such amounts,
as we must determine the probability of various possible outcomes and estimate
future amounts. Management does not believe it is more likely than not that we
will generate future income in a timeframe and amount sufficient to realize our
net deferred tax assets. Changes in management's estimate of future income in
the timeframe during which the temporary differences and carryforwards
comprising our deferred tax assets become deductible could result in a material
impact to our financial position including the recognition of a net deferred tax
asset.

Accounting Policies

An accounting policy is considered to be critical if it requires an accounting
estimate to be made based on assumptions about matters that are highly uncertain
at the time the estimate is made, and if different estimates that reasonably
could have been used, or changes in the accounting estimate that are reasonably
likely to occur, could materially impact the condensed consolidated financial
statements. We believe that our critical accounting policies reflect the more
significant estimates and assumptions used in the preparation of the condensed
consolidated financial statements. Refer to Note. 2 Basis of Presentation and
Summary of Significant Accounting Policies and Estimates in the notes to our
condensed consolidated financial statements included elsewhere in this Quarterly
Report on Form 10-Q.

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Results of Operations

The following table presents our operating results for the three months ended September 30, 2022 and 2021 (in thousands, except percentages):

                                                 Three Months Ended September 30,
                                                    2022                    2021               Change               % Change

Revenue                                      $         3,329           $     3,049          $     280                         9  %
Cost of revenue                                        1,643                 1,242                401                        32  %
Gross profit                                           1,686                 1,807               (121)                       (7) %
Gross profit %                                            51   %                59  %

Operating expenses:
Sales and marketing                                    1,742                 1,685                 57                         3  %
Research and development                                 936                   618                318                        51  %
General and administrative                             2,662                 2,293                369                        16  %

Total operating expenses                               5,340                 4,596                744                        16  %
Loss from operations                                  (3,654)               (2,789)              (865)                       31  %
Other (expense) income, net:
Interest expense                                         (34)                  (24)               (10)                       42  %
Gain on revaluation of warrant liabilities               112                 1,125             (1,013)                      n/m(1)

Unrealized loss on foreign exchange                     (732)                 (268)              (464)                      n/m(1)
Other income (expense), net                                4                    (2)                 6                       n/m(1)
Total other (expense) income, net                       (650)                  831             (1,481)                     (178) %
Net loss                                     $        (4,304)          $    (1,958)         $  (2,346)                      120  %


(1)Not Meaningful


Revenue

Revenue increased $0.3 million, or 9%, for the three months ended September 30,
2022, compared to the same period of 2021. Revenue in the third quarter of 2022
included approximately $3.2 million in EksoHealth revenue and approximately $0.1
million in EksoWorks revenue.

EksoHealth revenue increased approximately $0.5 million for the three months
ended September 30, 2022, compared to the same period of 2021. The increase in
revenue was primarily driven by an increase in the volume of EksoNR device sales
in the EMEA and APAC regions. EksoWorks revenue decreased approximately $0.2
million for the three months ended September 30, 2022, compared to the same
period of 2021. The decrease in EksoWorks revenue was primarily driven by a
reduction in the volume of EVO and EksoVest sales.

Gross profit

Gross profit decreased 7% for the three months ended September 30, 2022 compared
to the same period of 2021, driven by a decrease in gross profit margins in
EksoHealth and EksoWorks segments. Gross margin was approximately 51% for the
three months ended September 30, 2022, compared to a gross margin of 59% for the
same period of 2021. The overall decrease in gross margin was primarily due to
the increase in EksoHealth service costs for both labor and materials usage, and
increases in inventory costs due to the continued global supply shortage.
Additionally, the average selling price for the EksoNR, on an aggregate basis
across all regions, for the three months ended September 30, 2022 decreased 12%
compared to the same period in 2021 as a result of a relative increase of
indirect device sales placed through our distributors. The decrease in gross
margin was partially offset by the relative increase in EksoHealth revenue,
which generally has higher gross margins, in overall revenue composition.

EksoHealth’s service costs have increased due to increased headcount, significant increases in shipping and freight costs related to service activities, and servicing an increased number of client units.

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Contents

Functionnary costs

Research and development expenses increased $0.3 million, or 51%, for the three
months ended September 30, 2022, compared to the same period of 2021, primarily
due to an increase in product development activity mostly related to sustaining
engineering activity for the EksoNR and the development of next generation
products.

General and administrative expenses increased $0.4 millionor 16%, for the three months ended September 30, 2022compared to the same period of 2021, primarily due to increased business development activities and costs associated with our move to our new headquarters and manufacturing facility in
San Rafael, California.

Total other (expense) income, net

Gain on revaluation of warrant liabilities was $0.1 million for the three months
ended September 30, 2022, and was associated with the revaluation of warrants
issued in 2019, 2020 and 2021. Gain on warrant liabilities was $1.1 million for
the three months ended September 30, 2021, and was associated with the
revaluation of warrants issued in 2019, 2020 and 2021. Gains and losses on
revaluation of warrants are primarily driven by changes in our stock price and
the risk-free rate.

Unrealized loss on foreign exchange for the three months ended September 30,
2022 was $0.7 million compared to an unrealized loss on foreign exchange of $0.3
million for the same period of 2021. The unrealized loss was primarily the
result of foreign currency revaluations of our inter-company monetary assets and
liabilities.

The following table presents our operating results for the nine months ended
September 30, 2022 and 2021 (in thousands, except percentages):

                                                  Nine Months Ended September 30,
                                                     2022                    2021               Change               % Change

Revenue                                      $          9,361           $     7,170          $   2,191                        31  %
Cost of revenue                                         4,825                 2,836              1,989                        70  %
Gross profit                                            4,536                 4,334                202                         5  %
Gross profit %                                             48   %                60  %

Operating expenses:
Sales and marketing                                     5,212                 5,265                (53)                       (1) %
Research and development                                2,855                 1,930                925                        48  %
General and administrative                              7,589                 6,415              1,174                        18  %

Total operating expenses                               15,656                13,610              2,046                        15  %
Loss from operations                                  (11,120)               (9,276)            (1,844)                       20  %
Other (expense) income, net:
Interest expense                                          (90)                  (77)               (13)                       17  %
Gain on revaluation of warrant liabilities              1,011                 2,011             (1,000)                      n/m(1)

Gain on forgiveness of note payable                         -                 1,099             (1,099)                      n/m(1)
Unrealized loss on foreign exchange                    (1,704)                 (640)            (1,064)                      n/m(1)
Other income (expense), net                                 1                   (18)                19                      (106) %
Total other (expense) income, net                        (782)                2,375             (3,157)                     (133) %
Net loss                                     $        (11,902)          $    (6,901)         $  (5,001)                       72  %



(1)Not Meaningful

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Revenue

Revenue increased $2.2 million, or 31%, for the nine months ended September 30,
2022, compared to the same period of 2021. Revenue for the nine months ended
September 30, 2022 included approximately $8.3 million in EksoHealth revenue and
approximately $1.0 million in EksoWorks revenue.

EksoHealth revenue increased approximately $2.0 million, or 32%, for the nine
months ended September 30, 2022, compared to the same period of 2021. The
increase in revenue was primarily driven by an increase in the volume of EksoNR
device sales in the Americas, EMEA, and APAC regions. EksoWorks revenue
increased approximately $0.2 million, or 19%, for the nine months ended
September 30, 2022, compared to the same period of 2021. The increase in revenue
was primarily related to the recognition of previously deferred prepaid
royalties associated with a license and distribution agreement that expired.

Gross profit

Gross profit increased 5% for the nine months ended September 30, 2022 compared
to the same period of 2021, largely driven by the increase in EksoHealth revenue
as discussed above. Gross margin was approximately 48% for the nine months ended
September 30, 2022, compared to a gross margin of 60% for the same period of
2021. The overall decrease in gross margin was primarily due to an increase in
EksoHealth service costs for both labor and materials usage, and increases in
inventory costs due to the continued global supply shortage. The decrease in
gross margin was partially offset by the recognition of previously deferred
prepaid royalties associated with a license and distribution agreement that
expired.

EksoHealth service costs increased due to increased headcount and the servicing
of an increased number of customer units, owing to the receipt of service parts
during the period, the shortage of which had previously precluded the completion
of service. Additionally, we have experienced significant increases in the cost
of shipping and freight related to service activities.

Functionnary costs

Research and development expenses increased $0.9 million, or 48%, for the nine
months ended September 30, 2022, compared to the same period of 2021, due to an
increase in product development activity mostly related to sustaining
engineering activity for the EksoNR.

General and administrative expenses increased $1.2 million, or 18%, for the nine
months ended September 30, 2022, compared to the same period of 2021, primarily
due to noncash stock-based compensation related to the appointment of our new
Chief Executive Officer, severance expense associated with the departure of our
former Chief Executive Officer, an increase in business development activities,
and costs associated with our move to our new headquarters and manufacturing
facility in San Rafael, California.

Total other (expense) income, net

Gain on revaluation of warrant liabilities was $1.0 million for the nine months
ended September 30, 2022, and was associated with the revaluation of warrants
issued in 2019, 2020 and 2021. Gain on warrant liabilities was $2.0 million for
the nine months ended September 30, 2021, and was associated with the
revaluation of warrants issued in 2019, 2020 and 2021. Gains and losses on
revaluation of warrants are primarily driven by changes in our stock price and
risk free rate.

Gain on forgiveness of note payable of $1.1 million for the nine months ended
September 30, 2021, related to the forgiveness of our PPP Loan. There was no
comparable item in the nine months ended September 30, 2022.

Unrealized loss on foreign exchange for the nine months ended September 30, 2022
was $1.7 million compared to an unrealized loss on foreign exchange of
$0.6 million for the same period of 2021. The unrealized loss was primarily due
to foreign currency revaluations of our inter-company monetary assets and
liabilities.


Cash and capital resources

Since our inception, we have devoted substantially all of our efforts toward the
development and commercialization of exoskeletons for the medical and industrial
markets. and toward raising capital. We have financed our operations primarily
through the issuance and sale of equity securities for cash consideration and
through bank debt.

Cash and capital resources

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Contents

On September 30, 2022, we had working capital of $28.9 million, compared to
working capital of $40.9 million at December 31, 2021. The decrease in working
capital was primarily due to a lower cash balance from cash used in operations.
Our cash as of September 30, 2022, consisted of bank deposits with third party
financial institutions. As of September 30, 2022, of our $29.2 million of cash,
$28.1 million was held domestically while $1.1 million was held by foreign
subsidiaries.

As described in Note 8 in the notes to our condensed consolidated financial
statements included elsewhere in this Quarterly Report on Form 10-Q under the
caption Notes Payable, net, borrowings under our new secured term loan agreement
with Pacific Western Bank have a requirement of minimum cash on hand equivalent
to the current outstanding principal balance. As of September 30, 2022, $2.0
million of cash must remain as restricted. After considering cash restrictions,
effective unrestricted cash as of September 30, 2022 is estimated to be $27.2
million. With this unrestricted cash balance, we believe that we currently have
sufficient cash to fund our operations beyond the look forward period of one
year from the issuance of these condensed consolidated financial statements.

Cash

The following table summarizes the sources and uses of cash (in thousands).

                                                                    Nine 

months ended September 30,

                                                                       2022                    2021
Net cash used in operating activities                          $         (11,044)         $     (8,081)
Net cash used in investing activities                                       (141)                  (60)
Net cash provided by financing activities                                      -                38,712
Effect of exchange rate changes on cash                                      (41)                    6
Net (decrease) increase in cash                                          (11,226)               30,577
Cash at the beginning of the period                                       40,406                12,862
Cash at the end of the period                                  $          29,180          $     43,439


Net cash used in operating activities

Net cash used in operations increased $3.0 million, or 37%, for the nine months
ended September 30, 2022, compared to the same period of 2021 primarily due to
higher payments for business development costs incurred in late 2021, increased
employee compensation, and increased inventory purchases.

Net cash used in investment activities

Net cash used in investing activities increased $0.1 million for the nine months
ended September 30, 2022, compared to the same period of 2021 due to cash
outflows for leasehold improvements for our new headquarters and manufacturing
facility in San Rafael, California.

Net cash provided by financing activities

Net cash provided by financing activities of $38.7 million for the nine months
ended September 30, 2021, was generated from the sale of common stock and
warrants for net proceeds of $36.5 million in connection with the equity
financing, net proceeds of $0.7 million from our "at the market offering"
program, and proceeds of $1.4 million from the exercise of warrants. There was
no comparable amount for the nine months ended September 30, 2022.

Material cash needs

Our material cash requirements include the following items, some of which are
represented in the table of Contractual Obligations and Commitments: (1)
employee wages, benefits and incentives, (2) the procurement of raw materials
and components to support the manufacturing and sale of our products, (3)
expenditures for the ongoing improvement and development of existing and new
technologies, (4) debt repayments (for additional information see Note 8 in the
notes to our condensed consolidated financial statements included elsewhere in
the Quarterly Report on Form 10-Q), and (5) operating lease payments (for
additional information see Note 9 in the notes to our condensed consolidated
financial statements included elsewhere in the Quarterly Report on Form 10-Q).


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We plan on utilizing our existing unrestricted cash balance to fund our material
cash requirements in the short and long term.



Contractual obligations and commitments

The following table summarizes our outstanding contractual obligations as of
September 30, 2022, and the effect those obligations are expected to have on our
liquidity and cash flows in future periods (in thousands):

                                                        Payments Due By Period:
                                                     Less than
                                         Total        One Year       1-3 Years       3-5 Years
Note payable, principal and interest   $ 2,124      $    2,124      $        -      $        -
Facility operating leases                1,579             314             822             443
Purchase obligations                     3,203           3,203               -               -
Total                                  $ 6,906      $    5,641      $      822      $      443



In response to, or in anticipation of, supplier disruptions and extended lead
times, we may stockpile certain components or raw materials to help prevent
disruption in our production of the EksoNR. Such purchasing behavior is a
contributing factor to the increase in purchase obligations as compared to prior
periods. These actions have, and could continue to have, a short-term adverse
impact on our cash used in operating activities and increase our inventory
balance. Obligations related to these activities are reflected in the line
purchase obligations in the table above.

Refer to Note 13. Commitments and Contingencies in the notes to our condensed
consolidated financial statements included elsewhere in this Quarterly Report on
Form 10-Q for additional information regarding our license agreements, purchase
obligations, and lease commitments.

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