Post by highskier on May 22, 2020 16:06:43 GMT
Stk up 9% today.
Ekso Bionics Announces CFIUS Determination Regarding China Joint Venture
GlobeNewswire May 20, 2020
RICHMOND, Calif., May 20, 2020 (GLOBE NEWSWIRE) -- Ekso Bionics Holdings, Inc. (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®
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®