New Age Tech
Did you know that there were 3 million industrial robotics in operation around the world in 2021? According to the International Federation of Robotics (IFR), this represents a growth of 10%, making 2021 the third most successful year in history for the robotics industry. In particular, North America sold 39,708 robotic units at a value of 2 billion, setting a new record.
The automotive industry is considered a key application of industrial robots. Between Asia, Europe, and the Americas, the demand for robots in the automotive industry is expected to grow by 8% annually. In total, the Global Automotive Robotics Market was valued at USD$8.69 billion in 2021. By 2027, this market is expected to reach USD$17.34 billion, expanding at a CAGR of 11.80%.
While the automotive robotics industry certainly represents a large portion of the robotics market as a whole, non-automotive orders have grown substantially. In 2021, non-automotive robot orders surpassed automotive robot orders for the first time in North America. So, what non-automotive industries are driving growth in the robotics market? The service and medical sectors, to name just a few.
The global service robotics market is expected to reach $41.49 billion by 2027, expanding at a CAGR of 15.9%. While this is significantly larger than the automotive robotics industry, the service robotics market is also much broader, consisting of professional and personal service robots. Professional service robots are used in diverse fields, including healthcare, forestry, and construction, among others.
In particular, the medical robotics system market is expected to expand at an impressive CAGR of 22.18% and is projected to reach USD$28.34 billion by 2026. On the contrary, personal service robots are used for non-commercial tasks like mobility assistance. With this in mind, this article will focus on three companies with a foothold in the service robotics market.
Guardforce AI Co. Limited
- $23.167M Market Capitalization
Guardforce AI Co. Ltd. (GFAI.Q) is a globally integrated security solutions provider focused on the development of robotic solutions and information security services. The Company’s solutions and services are intended to compliment Guardforce’s established secured logistics business. By integrating multiple functionalities of its products, the Company has rolled out RaaS for many industries.
Some of these industries include public health, hospitality, and transportation. Currently, Guardforce has partners in Singapore, Malaysia, Thailand, Hong Kong, and Macau. For context, Robots as a Service (RaaS) allows businesses to receive the benefits of robotic process automation by leasing robotic devices and accessing a cloud-based subscription service, similar to Software as a Service (SaaS) models.
On June 2, 2022, Guardforce announced that it has signed a supplemental Letter of Intent (LOI) to acquire an additional twelve robotics companies. This is in line with the Company’s previously announced definitive agreement to acquire seven robotics companies in China. If you would like to know more about this, check out this article covering Guardforce’s previous acquisitions.
“We remain focused on continuing our expansion in China, through the further penetration of the robotics market and increasing our presence within key economic areas of China. We are effectively executing on our business strategy and look forward to tapping into the tremendous demand for contactless robotic services…,” said Terence Yap, Chairman of Guardforce AI.
To summarize Guardforce’s latest developments, on March 21, 2022, the Company signed a non-binding LOI with the Kewei Group to purchase up to 36 of the group’s subsidiaries. According to the terms of the LOI, the acquisition of these companies will take place in two phases. In the first phase, Guardforce would acquire an initial eight companies, which the Company recently completed on May 24, 2022.
With this in mind, Guardforce has now signed an LOI to acquire 12 additional robotics companies from the Kewei Group. If successful, the Company will possess 20 of the 36 companies proposed in the original LOI. The value of Guardforce’s latest target acquisitions is USD$18 million, based on one-time projected average revenues for the twelve companies over the next five years.
The acquisition is expected to be paid for with a combination of 10% cash and 90% restricted ordinary shares of Guardforce at the previously agreed price of USD$2.00 per share. Once a definitive agreement has been signed, the acquisition is expected to close in the second half of 2022. Lei Wang, Guardforce’s CEO, also references the Company’s mobile digital advertising.
Ms. Wang briefly stated that Guardforce will leverage its robots to capitalize on the mobile digital advertising market in China, which is projected to reach an estimated USD$176 billion by 2026. Ms. Wang commented, “We intend to target this opportunity as an important incremental and high margin revenue stream.”
Guardforce’s share price opened at $0.5665 on June 3, 2022, down from a previous close of $0.5771. The Company’s shares were down -2.96% and were trading at $0.56 at market close on June 3, 2022.
- $16.033M Market Capitalization
Myomo Inc. (MYO.NYSE) is a wearable medical robotics company offering expanded mobility for those suffering from neurological disorders and upper-limb paralysis. The Company completed its Initial Public Offering (IPO) on June 9, 2017. In total, Myomo raised $5 million through the sale of 665,498 shares of its common stock at a price of $7.50 per share.
At the same time, the Company completed a private sale for total proceeds of $2.9 million. Through its public and private offering, Myomo generated a combined capital of $7.9 million. The Company develops and markets the MyoPro product line, which refers to a powered upper-limb orthosis designed to support the arm and restore function to patients suffering from neurological disorders or injury.
On May 11, 2022, Myomo announced its Q1 2022 financial results highlighting a revenue of $3.9 million, including $1.0 million in license revenue from the Company’s China joint partner. More on that later. In particular, Myomo’s product revenue was up 23% to $2.9 million, however, the Company’s gross margin fell to 66.7%. In total, Myomo’s cash position was $12.9 million as of March 31, 2022.
“First quarter product revenue was in line with our expectations, with growth reflecting a higher number of MyoPro units sold, strong results in international markets, and a leveling off in ASP-related growth as the percentage of product revenue from the direct-billing channel matures,” stated Paul R. Gudonis, Myomo’s Chairman and CEO.
For context, ASP refers to Average Selling Price, the price at which certain goods or services are typically sold. Referring back to Myomo’s China joint partner, on January 5, 2022, the Company announced its entry into an amended and restated joint venture agreement with Beijing Ryzur Medical Investment Co. Ltd. and Wuxi Chinaleaf Rehabilitation Industry Equity Investment Fund.
Furthermore, Myomo signed a Technology Licensing Agreement and a Trademark License Agreement with Jianxi Myomo Medical Assistive Appliance Co. Ltd., henceforth referred to as the JV Company. To provide some background, Myomo originally entered into a joint venture with the aforementioned companies on January 21, 2021.
According to the terms of the agreement, the JV Company will license Myomo’s Intellectual Property (IP) for an upfront license fee of $2.7 million, of which $200,000 is payable within 30 days of the agreement’s effective date, which was December 29, 2021. The remaining $2.5 million is payable within 30 days of Myomo’s capital contribution of $200,000 to the JV Company.
“Our joint venture is making tangible progress toward beginning operations, and we expect the remainder of the license fee will be paid during the second quarter. At that point, we will begin the transfer of the technology and record the remaining $1.7 million as revenue,” said David Henry, Myomo’s CFO.
The technology transfer to the JV Company was expected to be completed after receipt of the full license fee, which was planned before the end of Q1 2022. However, on April 4, 2022, Myomo announced that it has received $1 million of the total $2.7 million license fee as of March 31, 2022. With this in mind, the Company now expects the JV Company to complete payment of the license fee in Q2 2022.
Myomo’s share price opened at $2.26 on June 3, 2022, up from a previous close of $2.21. The Company’s shares were up 5.43% and were trading at $2.33 at market close on June 3, 2022.
Microbot Medical Inc.
- $42.293M Market Capitalization
Microbot Medical Inc. (MBOT.Q) is a pre-clinical medical device company specializing in transformational micro-robotic technologies. The Company develops and commercializes LIBERTY®, the first fully-disposable robotic system for endoluminal surgical procedures. For context, endoluminal refers to the area inside a tube, duct, or hollow organ in the body.
For example, an endoluminal surgical procedure may involve the intestines or stomach. Microbot went public on November 29, 2016, following a merger with StemCells Inc. (STEM.Q), a publicly-traded company on the NASDAQ. The Company’s merger entailed a one-for-nine reverse stock split. Shareholders, advisors, and consultants of Microbot received shares of StemCells’ common stock representing 95% of the company’s shares at the time.
On April 6, 2022, Microbot announced the promotion of Rachel Vaknin as the Company’s CFO. Ms. Vaknin possesses 20 years of experience and will be replacing Microbot’s previous CFO, David Ben Naim, effective April 1, 2022. Previously, Ms. Vaknin worked as the CFO of a company in the autonomous driving sector where she was responsible for budget planning, forecasting, and fundraising, to name just a few tasks.
“I am excited to have Rachel join our leadership team and help build out critical infrastructure needs to support our future commercialization efforts. I believe her financial expertise, in addition to her track record in leading finance functions and operations, will strongly support our business objectives over the next few years,” commented Mr. Harel Gadot, Microbot’s Chairman, President, and CEO.
More importantly, on March 31, 2022, Microbot announced that it has filed its pre-submission package for LIBERTY with the US Food and Drug Administration (FDA). Looking forward, Microbot plans to meet with the FDA following a normal review process to discuss the pre-submission and clear a pathway for the clearance of LIBERTY.
As previously mentioned, LIBERTY is a fully-disposable robotic system. LIBERTY is also non-capital intensive, portable, and remote-site-controlled, according to the Company. Aside from LIBERTY, Microbot is researching and developing the Self Cleaning Shunt (SCS) for the treatment of hydrocephalus and normal pressure hydrocephalus (NPH).
Hydrocephalus refers to the abnormal buildup of cerebrospinal fluid (CSF) in the ventricles within the brain. This can result in a wide range of symptoms, including headaches, vision problems, and poor memory. On the other hand, NPH usually begins slowly and is more common in adults over the age of 60.
With this in mind, Microbot’s SCS is designed to prevent obstruction in the CSF catheters implanted in the ventricle of the brain of patients who suffer from hydrocephalus or NPH. On February 13, 2017, Microbot announced a research collaboration with Washington University School of Medicine. This collaboration was intended to determine the safety and efficacy of the Company’s SCS.
“The data from this latest study brings us one step closer to commercialization as it continues to demonstrate that Microbot’s SCS™ offers a clear competitive differentiation compared with current shunts being used today in thousands of procedures,” said Harel Gadot.
On September 10, 2019, Microbot announced that its SCS “clearly demonstrated the ability to prevent shunt occlusion” in a follow-up in vitro laboratory study. The study, which concluded on August 14, 2019, demonstrated that the Company’s SCS was effective in preventing cell blockage when compared to standard of care surgical shunts.
Microbot’s share price opened at $5.79 on June 3, 2022, up from a previous close of $5.76. The Company’s shares were up 3.30% and were trading at $5.95 at market close on June 3, 2022.