December 6, 2021

Volume XI, Number 340

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December 03, 2021

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CFIUS Filing: Zhejiang Youchuang Venture Capital Investment, Shaoxing City Keqiao District Paradise Silicon Intelligent Robot Industrial Investment Partnership, and EKSO Bionics Holdings

Acquirer: 

Zhejiang Youchuang Venture Capital Investment Co., Ltd. (China); Shaoxing City Keqiao District Paradise Silicon Intelligent Robot Industrial Investment Partnership (China)

Acquired:  

EKSO Bionics Holdings, Inc. (U.S.)

Value: 

US$5 million

Industry: 

Medical Devices & Equipment; Healthcare; Exoskeleton Technology

On January 30, 2019, EKSO Bionics, Inc., a U.S. company that “designs, develops and sells exoskeleton technology to augment human strength, endurance and mobility,” entered into a joint venture contract with Zhejiang Youchuang Venture Capital Investment Co., Ltd., and Shaoxing City Keqiao District Paradise Silicon Intelligent Robot Industrial Investment Partnership, to establish a joint venture entity in China “to develop and serve the exoskeleton market in China and other Asian markets and to create a global exoskeleton manufacturing center in the Zhejiang Province of China.”  (EKSO Bionics Holdings, Inc., Form 10-Q, May 1, 2019, SEC Filing; see Equity Joint Venture Contract, EKSO Bionics Holdings, Inc., Form 10-Q, Ex-10.1, May 1, 2019, SEC Filing.)  In exchange, the “China JV partners and their affiliates agreed to purchase an aggregate of 3,067,485 shares of [EKSO Bionics Holdings, Inc.,] common stock . . .” (Id.)   Following inquiries from the Department of Defense and the Treasury Department, the parties “decided to submit a joint voluntary notice . . . to CFIUS,” (EKSO Bionics Holdings, Inc., Form 10-Q, Oct. 30, 2019, SEC Filing,) and submitted a notice in December 2019. (EKSO Bionics Holdings, Inc., Form 10-Q, Apr. 30, 2020, SEC Filing.)   “On February 20, 2020, CFIUS imposed interim measures to mitigate concerns CFIUS identified pending completion of its investigation.”  (EKSO Bionics Holdings, Inc., Form 10-Q, Apr. 30, 2020, SEC Filing.)  “On May 19, 2020, [the parties] received notice from CFIUS . . . 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 draft National Security Agreement (“NSA”), which will, among other things, require the termination of the Company’s role with the China JV.” (EKSO Bionics Holdings, Inc., From 424B5, June 9, 2020, SEC Filing.)  “[O]n July 13, 2020, the [parties] entered into a National Security Agreement, or NSA, which, among other things, required the termination of the Company’s agreements and role with the China JV. On August 12, 2020, the Company and the JV Partners agreed to terminate the agreements underlying the China JV. As of December 31, 2020, all agreements related to the China JV had been terminated.” (EKSO Bionics Holdings, Inc., Form 10-K, Feb. 25, 2021, SEC Filing.)

© Copyright 2021 Squire Patton Boggs (US) LLPNational Law Review, Volume XI, Number 166
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