ReWalk Robotics’ (NSDQ: RWLK) motorized exoskeletons can help the paralyzed walk again, detecting subtle shifts in a patient’s center of gravity. The exoskeleton senses if the patient leans forwards just slightly, initiating the first step. By continuing to shift their body, the patient keeps the unit in motion as it mimics a natural gait. Honestly, it’s nothing short of miraculous.

Miraculous though it may be, the motorized exoskeletons are also quite expensive with a list price of $77,000. But even that high price does not reflect the true cost of the unit, since patients must undergo rehab and training to use it, which adds a hefty amount of cost. With that kind of price tag, even though they are FDA-approved, most major insurance carriers are hesitant to approve their purchase. Based on ReWalk’s preliminary revenue estimate for the third quarter, released just a few days ago, sales for the quarter totaled just $1.4 million after selling 23 units. Insurance only covered 13 of those units.

Despite that, the company continues its research and development efforts to improve the units and add new features, pay its sales force and other employees, plus all the other costs associated with running a business. While sales are picking up, ReWalk is still burning through about $6 million in the average quarter.

That money must come from somewhere, so ReWalk began a secondary stock offering last week. Per the offering prospectus, an additional 3.25 million shares will be sold, which is extremely dilutive to existing shareholders. On top of that, the shares will be priced at $3.75 each, knocking nearly a third of the average price a share has been fetching over the past three months. Adding more insult to injury, each share will also carry 0.75 of a warrant to purchase another share with an exercise price of $4.75, still nearly $1 cheaper than the average price before the announcement.

With that kind of pricing, ReWalk must be in dire need of financing. It isn’t that unusual for secondary offerings to be priced below the prevailing market value, but this is big haircut so the market must think there’s a decent risk the company will run into more trouble. Considering this isn’t the first-time ReWalk has done a secondary offering, that probably isn’t an unreasonable assumption.

While ReWalk’s exoskeleton is a pretty miraculous development, at this point we don’t see how sales of the units could catchup to the company’s cash burn anytime soon. Without some serious expense cuts, the roughly $12 million the company will raise won’t last for long, sending it back to the well sooner rather than later. Add in the fact that the shares are already down more than 50% since we initially recommended them, we can’t see holding on at this point.

Sell ReWalk Robotics and shift the money to our other exoskeleton play, Parker-Hannifin which is a buy under $123.