LFWD 10-Q
Lifeward Ltd. (LFWD)
10-Q
2025-08-14
For: 2025-06-30
View Original
Added on
April 10, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
For the quarterly period ended June 30, 2025 or
For the transition period from to
Commission File Number: 001-36612
(Exact name of registrant as specified in charter)
| Not applicable | ||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act
|
Title of each class
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Trading Symbol
|
Name of each exchange on which registered
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Indicate by a check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Smaller reporting company |
|
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
As of August, 12, 2025, the registrant had outstanding 15,704,622 ordinary shares, par value NIS 1.75 per share.
LIFEWARD LTD.
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2025
TABLE OF CONTENTS
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i
Introduction and Where You Can Find Other Information
As used in this quarterly report on Form 10-Q (this “quarterly report”), the terms “Lifeward,” the “Company,” “LL,” “we,” “us” and “our” refer to Lifeward Ltd. and its subsidiaries, unless the context clearly indicates otherwise. Our website is www.golifeward.com. Information contained in, or that can be accessed through, our website does not constitute a part of this quarterly report and is not incorporated by reference herein. We have included our website address in this quarterly report solely for informational purposes. Information that we furnish to or file with the Securities and Exchange Commission (the “SEC”), including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to, or exhibits included in, these reports are available for download, free of charge, on our website as soon as reasonably practicable after such materials are filed with or furnished to the SEC. Our SEC filings, including exhibits filed or furnished therewith, are also available on the SEC’s website at http://www.sec.gov.
Special Note Regarding Forward-Looking Statements
In addition to historical information, this quarterly report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, that are based on our management’s beliefs and assumptions and on information currently available to our management. Forward- looking statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, potential market opportunities and the effects of competition. Forward-looking statements may include projections regarding our future performance and, in some cases, can be identified by words like “anticipate,” “assume,” “believe,” “could,” “seek,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “future,” “should,” “will,” “would” or similar expressions that convey uncertainty of future events or outcomes and the negatives of those terms. These statements may be found in the section of this quarterly report titled “Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this quarterly report. These statements include, but are not limited to, statements regarding:
| • | our expectations regarding future growth, including our ability to increase sales in our existing geographic markets and expand to new markets; |
| • | our ability to continue as a going concern for the next twelve months; |
| • | our ability to regain and maintain compliance with the continued requirements of The Nasdaq Capital Market and the risk that our ordinary shares will be delisted if we fail to regain and maintain compliance with such requirements; |
| • | our ability to maintain and grow our reputation and the market acceptance of our products; |
| • | our ability to achieve reimbursement from third-party payors or advance Centers for Medicare & Medicaid Services (“CMS”) coverage for our products, including our ability to successfully submit and gain approval of cases for Medicare coverage through Medicare Administrative Contractors (“MACs”); |
| • | our ability to successfully integrate the operations of AlterG, Inc. (“AlterG”) into our organization, and realize the anticipated benefits therefrom; |
| • | our ability to have sufficient funds to meet certain future capital requirements, which could impair our efforts to develop and commercialize existing and new products; |
| • | our ability to achieve the expected benefits from cost reduction initiatives, including streamlining operations and transitioning the manufacturing of our ReWalk products to our in-house manufacturer, and our ability to manage any related business disruptions; |
| • | our ability to navigate any difficulties associated with moving production of our AlterG Anti-Gravity Systems to a contract manufacturer; |
| • | our ability to leverage our sales, marketing and training infrastructure; |
| • | our ability to grow our business through acquisitions of businesses, products or technologies, and the failure to manage acquisitions, or the failure to integrate them with our existing business; |
| • | our ability to obtain certain components of our products from third-party suppliers and our continued access to our product manufacturers; |
| • | our ability to improve our products and develop new products; |
| • | our compliance with medical device reporting regulations to report adverse events involving our products, which could result in voluntary corrective actions or enforcement actions such as mandatory recalls, and the potential impact of such adverse events on our ability to market and sell our products; |
| • | our ability to gain and maintain regulatory approvals and to comply with any post-marketing requests; |
| • | the risk of a cybersecurity attack or incident relating to our information technology systems significantly disrupting our business operations; |
| • | our ability to maintain adequate protection of our intellectual property and to avoid violation of the intellectual property rights of others; |
| • | the impact of substantial sales of our shares by certain shareholders on the market price of our ordinary shares; |
| • | our ability to use effectively the proceeds of our recent offering of securities and any future offerings of securities; |
| • | the impact of the market price of our ordinary shares on the determination of whether we are a passive foreign investment company; |
| • | market and other conditions, including the extent to which inflationary pressures, interest rate, currency rate fluctuations, and changes in trade policies (including tariffs and trade protection measures that have been or may in the future be imposed by the U.S. or other countries), or global instability may disrupt our business operations or our financial condition or the financial condition of our customers and suppliers, including the ongoing Russia-Ukraine conflict, ongoing conflict in the Middle East (including any escalation or expansion) and the increasing tensions between China and Taiwan; and |
| • | other factors discussed in the “Risk Factors” section of our 2024 annual report on Form 10-K and in our subsequent reports filed with the SEC. |
The preceding list is not intended to be an exhaustive list of all forward-looking statements contained in this quarterly report. The statements are based on our beliefs, assumptions, and expectations of future performance, taking into account the information currently available to us. These statements are only predictions based upon our current expectations and projections about future events. There are important factors that could cause our actual results, levels of activity, performance, or achievements to differ materially from the results, levels of activity, performance or achievements expressed or implied by the statements. In particular, you should consider the risks provided under “Part I, Item 1A. Risk Factors” of our 2024 annual report on Form 10-K, and in other reports subsequently filed by us with, or furnished to, the SEC.
You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur.
Any forward-looking statement in this quarterly report speaks only as of the date hereof. Except as required by law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future developments or otherwise.
ii
|
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LIFEWARD LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
(In thousands, except share and per share data)
|
|
June 30,
|
December 31,
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|||||||
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2025
|
2024
|
|||||||
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(unaudited)
|
||||||||
|
ASSETS
|
||||||||
|
CURRENT ASSETS
|
||||||||
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Cash and cash equivalents
|
$
|
|
$
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|
||||
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Restricted Cash
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|
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||||||
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Trade receivables, net of credit losses of $
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||||||
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Prepaid expenses and other current assets
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||||||
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Inventories
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||||||
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Total current assets
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||||||
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LONG-TERM ASSETS
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||||||||
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Restricted cash and other long-term assets
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Operating lease right-of-use assets
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||||||
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Property and equipment, net
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||||||
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Goodwill
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||||||
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Total long-term assets
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||||||
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Total assets
|
$
|
|
$
|
|
||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
F - 1
|
LIFEWARD LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
(In thousands, except share and per share data)
|
|
June 30,
|
December 31,
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|||||||
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2025
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2024
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|||||||
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(unaudited)
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||||||||
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LIABILITIES AND SHAREHOLDERS’ EQUITY
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||||||||
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CURRENT LIABILITIES
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||||||||
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Trade payables
|
$
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|
$
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||||
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Employees and payroll accruals
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|
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||||||
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Deferred revenues
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||||||
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Current maturities of operating leases liability
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Earnout liability
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Other current liabilities
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||||||
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Total current liabilities
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||||||
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LONG-TERM LIABILITIES
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Deferred revenues
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Non-current operating leases liability
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Other long-term liabilities
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Total long-term liabilities
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||||||
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Total liabilities
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||||||
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COMMITMENTS AND CONTINGENT LIABILITIES
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||||||||
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Shareholders’ equity:
|
||||||||
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Share capital
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||||||||
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Ordinary share of NIS
Issued:
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||||||
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Additional paid-in capital
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||||||
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Treasury Shares at cost,
|
(
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)
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(
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)
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||||
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Accumulated deficit
|
(
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)
|
(
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)
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||||
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Total shareholders’ equity
|
|
|
||||||
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Total liabilities and shareholders’ equity
|
$
|
|
$
|
|
||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
F - 2
LIFEWARD LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except share and per share data)
|
|
Three Months Ended
June 30,
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Six Months Ended
June 30,
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||||||||||||||
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2025
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2024
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2025
|
2024
|
||||||||||||
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Revenues
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$
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|
$
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|
$
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|
$
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||||||||
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Cost of revenues
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||||||||||||
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||||||||||||||||
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Gross profit
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||||||||||||||||
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Operating expenses:
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||||||||||||||||
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Research and development, net
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||||||||||||
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Sales and marketing
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General and administrative
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||||||||||||
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Impairment charges
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||||||||||||
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||||||||||||||||
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Total operating expenses
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||||||||||||
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|
||||||||||||||||
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Operating loss
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
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Financial income, net
|
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|
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|
||||||||||||
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||||||||||||||||
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Loss before income taxes
|
(
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)
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(
|
)
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(
|
)
|
(
|
)
|
||||||||
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Taxes on income
|
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|
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|
||||||||||||
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|
||||||||||||||||
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Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
|
|
||||||||||||||||
|
Net loss per ordinary share, basic and diluted
|
$
|
(
|
)
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$
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(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
|
|
||||||||||||||||
|
Weighted average number of shares used in computing net loss per ordinary share, basic and diluted
|
|
|
|
|
||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
F - 3
LIFEWARD LTD. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)
(In thousands, except share data)
|
Ordinary
Shares
|
Additional
paid-in
|
Treasury
|
Accumulated
|
Total
shareholders’
|
||||||||||||||||||||
|
Number (1)
|
Amount
|
capital
|
Shares
|
deficit
|
equity
|
|||||||||||||||||||
|
Balance as of March 31, 2024
|
|
|
$ |
|
$ |
|
$ |
(
|
)
|
$ |
(
|
)
|
$ |
|
||||||||||
|
Share-based compensation to employees and non-employees
|
-
|
|
|
|
|
|
||||||||||||||||||
|
Issuance of ordinary shares upon vesting of RSUs by employees and non-employees
|
|
|
(
|
)
|
|
|
|
|||||||||||||||||
|
Net loss
|
-
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
|
Balance as of June 30, 2024
|
|
|
$ |
|
$ |
|
$ |
(
|
)
|
$ |
(
|
)
|
$ |
|
||||||||||
|
|
||||||||||||||||||||||||
|
Balance as of March 31, 2025
|
|
|
|
(
|
)
|
(
|
)
|
|
||||||||||||||||
|
Share-based compensation to employees and non-employees
|
-
|
|
|
|
|
|
||||||||||||||||||
|
Issuance of ordinary shares upon exercise of options to purchase ordinary shares and RSUs by employees and non-employees
|
|
|
(
|
)
|
|
|
|
|||||||||||||||||
|
Issuance of ordinary shares under at-the-market offering, net of issuance costs of $
|
|
|
|
|
|
|
||||||||||||||||||
|
Issuance of ordinary shares in a in a public offering, net of issuance expenses in the amount of $
|
|
|
(
|
)
|
|
|
|
|||||||||||||||||
|
Net loss
|
-
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
|
Balance as of June 30, 2025
|
|
|
$ |
|
$ |
|
$ |
(
|
)
|
$ |
(
|
)
|
$ |
|
||||||||||
|
Ordinary
Shares
|
Additional
paid-in
|
Treasury
|
Accumulated
|
Total
shareholders’
|
||||||||||||||||||||
|
Number (1)
|
Amount
|
capital
|
Shares
|
deficit
|
equity
|
|||||||||||||||||||
|
Balance as of December 31, 2023
|
|
|
$ |
|
$ |
|
$ |
(
|
)
|
$ |
(
|
)
|
$ |
|
||||||||||
|
Share-based compensation to employees and non-employees
|
-
|
|
|
|
|
|
||||||||||||||||||
|
Issuance of ordinary shares upon vesting of RSUs by employees and non-employees
|
|
|
(
|
)
|
|
|
|
|||||||||||||||||
|
Net loss
|
-
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
|
Balance as of June 30, 2024
|
|
|
$ |
|
$ |
|
$ |
(
|
)
|
$ |
(
|
)
|
$ |
|
||||||||||
|
|
||||||||||||||||||||||||
|
Balance as of December 31, 2024
|
|
|
|
(
|
)
|
(
|
)
|
|
|
|||||||||||||||
|
Share-based compensation to employees and non-employees
|
-
|
|
|
|
|
|
||||||||||||||||||
|
Issuance of ordinary shares upon exercise of options to purchase ordinary shares and RSUs by employees and non-employees
|
|
|
(
|
)
|
|
|
|
|||||||||||||||||
|
Issuance of ordinary shares under at-the-market offering, net of issuance costs of $
|
|
|
|
|
|
|
||||||||||||||||||
|
Issuance of ordinary shares in a in a public offering, net of issuance expenses in the amount of $
|
|
|
(
|
)
|
|
|
|
|||||||||||||||||
|
Issuance of ordinary shares in a Registered Direct offerings, net of issuance expenses in the amount of $
|
|
|
|
|
|
|
||||||||||||||||||
|
Net loss
|
-
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
|
Balance as of June 30, 2025
|
|
|
$ |
|
$ |
|
$ |
(
|
)
|
$ |
(
|
)
|
$ |
|
||||||||||
| (1) |
Reflects the Company’s one-for-seven reverse share split that became effective on March 15, 2024. See Note 7a to the condensed consolidated financial statements.
|
| (2) |
See Note 7f to the condensed consolidated financial statements.
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
F - 4
LIFEWARD LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
|
|
Six Months Ended
June 30, |
|||||||
|
|
2025
|
2024
|
||||||
|
Cash flows used in operating activities:
|
||||||||
|
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
||
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
|
Depreciation
|
|
|
||||||
|
Amortization of intangible assets
|
|
|
||||||
|
Impairment charges
|
|
|
||||||
|
Share-based compensation
|
|
|
||||||
|
Remeasurement of earnout liability
|
(
|
)
|
(
|
)
|
||||
|
Interest income
|
|
(
|
)
|
|||||
|
Exchange rate fluctuations
|
(
|
)
|
|
|||||
|
Changes in assets and liabilities:
|
||||||||
|
Trade receivables, net
|
|
|
(
|
)
|
||||
|
Prepaid expenses, operating lease right-of-use assets and other assets
|
(
|
)
|
|
|||||
|
Inventories
|
(
|
)
|
(
|
)
|
||||
|
Trade payables
|
|
(
|
)
|
|||||
|
Employees and payroll accruals
|
(
|
)
|
(
|
)
|
||||
|
Deferred revenues
|
(
|
)
|
(
|
)
|
||||
|
Operating lease liabilities and other liabilities
|
(
|
)
|
(
|
)
|
||||
|
Net cash used in operating activities
|
$ |
(
|
)
|
$ |
(
|
)
|
||
|
|
||||||||
|
Cash flows used in investing activities:
|
||||||||
|
Purchase of property and equipment
|
(
|
)
|
|
|||||
|
Net cash used in investing activities
|
$ |
(
|
)
|
$ |
|
|||
|
|
||||||||
|
Cash flows from financing activities:
|
||||||||
|
Issuance of ordinary shares in a Registered Direct offerings, net of issuance expenses in the amount of $
|
|
|
||||||
|
Issuance of ordinary shares under at-the-market offering, net of issuance costs of $
|
|
|
||||||
|
Issuance of ordinary shares in a in a public offering, net of issuance expenses in the amount of $
|
|
|
||||||
|
Net cash provided by financing activities
|
$ |
|
$ |
|
||||
|
|
||||||||
|
Effect of Exchange rate changes on Cash, Cash Equivalents and Restricted Cash
|
|
(
|
)
|
|||||
|
Decrease in cash, cash equivalents, and restricted cash
|
(
|
)
|
(
|
)
|
||||
|
Cash, cash equivalents, and restricted cash at beginning of period
|
|
|
||||||
|
Cash, cash equivalents, and restricted cash at end of period
|
$
|
|
$
|
|
||||
|
Supplemental disclosures of non-cash flow information
|
||||||||
|
Classification of inventory to property and equipment
|
$
|
|
|
$
|
|
|||
|
Expenses related to offerings not yet paid (1)
|
$
|
|
$ |
|
||||
|
Supplemental cash flow information:
|
||||||||
|
Cash and cash equivalents
|
$
|
|
$
|
|
||||
|
Restricted cash included in other long-term assets
|
|
|
||||||
|
Total Cash, cash equivalents, and restricted cash
|
$
|
|
$
|
|
||||
| (1) |
See Note 7f to the condensed consolidated financial statements
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
F - 5
LIFEWARD LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1: GENERAL
| a. |
Lifeward Ltd. (“LL,” and together with its subsidiaries, the “Company”) was originally incorporated under the laws of the State of Israel on June 20, 2001, and commenced operations on the same date under the name Argo Medical Technologies Ltd. This name was later changed to ReWalk Robotics Ltd. on June 18, 2014. On January 29, 2024, the Company announced that it had rebranded as Lifeward, with each subsidiary of LL renamed to reflect the new corporate identity. The Company officially changed its name to Lifeward Ltd. on September 10, 2024.
|
| b. |
LL has three wholly owned (directly and indirectly) subsidiaries: (i) Lifeward, Inc. (“LI”) originally incorporated under the laws of Delaware on February 15, 2012 under the name of ReWalk Robotics, Inc., (ii) Lifeward GMBH (“LG”) originally incorporated under the laws of Germany on January 14, 2013 under the name of ReWalk Robotics GMBH, and (iii) Lifeward CA, Inc. ( “LCAI”) originally incorporated in Delaware on October 21, 2004 under the name of Gravus, Inc., which was later changed to AlterG, Inc. on June 30, 2005.
|
| c. |
The Company is a medical device company that designs, develops, and commercializes life-changing solutions that span the continuum of care in physical rehabilitation and recovery, delivering proven functional and health benefits in clinical settings as well as in the home and community. The Company’s initial product offerings were the ReWalk Personal and ReWalk Rehabilitation Exoskeleton devices for individuals with spinal cord injury (collectively, the “SCI Products”). These devices are robotic exoskeletons that are designed for individuals with paraplegia that use the Company’s patented tilt-sensor technology and an on-board computer and motion sensors to drive motorized legs that power movement. These SCI Products allow individuals with spinal cord injury the ability to stand and walk again during everyday activities at home or in the community.
|
The Company has sought to expand its product offerings beyond the SCI Products through internal development and distribution agreements. The Company has developed its ReStore Exo-Suit device (the “ReStore”), which it began commercializing in June 2019. The ReStore is a powered, lightweight soft exo-suit intended for use during the rehabilitation of individuals with lower limb disabilities due to stroke. During the second quarter of 2020, the Company signed an agreement to be the exclusive distributor of the MYOLYN MyoCycle FES Pro cycles to U.S. rehabilitation clinics and for the MyoCycle Home cycles available to US veterans through VA hospitals.
On August 11, 2023, pursuant to an Agreement and Plan of Merger among LI, AlterG, Inc., Atlas Merger Sub, Inc., a wholly owned subsidiary of AlterG, Inc. (“Merger Sub”), and Shareholder Representative Services LLC, dated August 8, 2023, LI acquired AlterG, Inc. and AlterG, Inc. became a wholly owned subsidiary of the Company. With the rebranding of the Company, AlterG, Inc. was renamed as LCAI.
F - 6
LIFEWARD LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The Company markets and sells its products directly to institutions and individuals and through third-party distributors. The Company sells its products directly primarily in the United States, through a combination (depending on the product line) of direct sales and distributors in Germany, Canada, and Australia, and primarily through distributors in other markets. In its direct markets, the Company has established relationships with clinics and rehabilitation centers, professional and college sports teams, and individuals and organizations in the spinal cord injury community, and in its indirect markets, the Company’s distributors maintain these relationships.
| d. |
As of June 30, 2025, the Company incurred a consolidated net loss of $
|
The Company's expectation to generate operating losses and negative operating cash flows in the future and the need for additional funding to support our planned operations raise substantial doubt regarding our ability to continue as a going concern for a period of one year after the date that the condensed consolidated financial statements are issued. Management currently estimates that the Company's cash will fund its operations into the fourth quarter of 2025. The Company's ability to continue to operate is dependent upon raising additional funds to finance its activities. There are no assurances, however, that the Company will be able to complete such financings on acceptable terms or in amounts sufficient to continue operating the business under the operating plan. In the event that the Company is unable to raise sufficient additional capital, management’s contingency plans may include various cost reductions and operational efficiency measures unrelated to the Company’s product development activities. These conditions raise substantial doubts about the Company's ability to continue as a going concern. The consolidated financial statements do not include any adjustments with respect to the carrying amounts of assets and liabilities and their classification that might be necessary should the Company be unable to continue as a going concern.
The accompanying unaudited condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and liabilities and commitments in the normal course of business. These financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from uncertainty related to the Company’s ability to continue as a going concern.
NOTE 2: BASIS OF PRESENTATION AND SUMMARY OF ESTIMATES
Basis of Presentation and Consolidation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles in the United States for complete financial statements. In management’s opinion, the accompanying financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. The Company’s interim period results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year.
These unaudited condensed consolidated financial statements and accompanying notes should be read in conjunction with the 2024 consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 2024 (the “2024 Form 10-K”). There have been no changes in the significant accounting policies from those that were disclosed in the consolidated financial statements for the fiscal year ended December 31, 2024, included in the 2024 Form 10-K, unless otherwise stated.
Use of Estimates
The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments, and assumptions. The Company’s management believes that the estimates, judgments, and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, the Company’s management evaluates estimates, including those related to inventories, assets acquired and liabilities assumed in business combinations, revenue recognition, deferred revenue, fair values of share-based awards, contingent liabilities, provision for warranty and allowance for credit losses. Such estimates are based on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.
Actual results could differ from those estimates.
F - 7
LIFEWARD LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES
| a. |
Fair Value Measurements
|
Cash and cash equivalents, restricted cash, prepaid expenses and other assets, trade payables and accrued expenses and other liabilities, are stated at their carrying value which approximates their fair value due to the short time to the expected receipt or payment.
The following tables present information about the Company’s financial assets and liabilities that are measured in fair value on a recurring basis as of June 30, 2025 and December 31, 2024 (in thousands):
|
Fair value measurements as of
|
||||||||||||
|
Description
|
Fair Value
Hierarchy
|
June 30,
2025
|
December 31,
2024
|
|||||||||
|
Financial assets:
|
||||||||||||
|
Money market funds included in cash and cash equivalent
|
Level 1
|
$
|
|
$
|
|
|||||||
|
Total Assets Measured at Fair Value
|
$
|
|
$
|
|
||||||||
|
Financial Liabilities:
|
||||||||||||
|
Earnout
|
Level 3
|
$ |
|
$
|
|
|||||||
|
Total liabilities measured at fair value
|
$ |
|
$
|
|
||||||||
The Company classifies cash equivalents within Level 1, because the Company uses quoted market prices or alternative pricing sources and models utilizing market observable inputs to determine their fair values.
The goodwill impairment recorded in the second quarter of 2025 was estimated using the Company's stock price, a Level 1 input, adjusted for an estimated control premium. Refer to Note 3f for further details.
The estimated fair value of the earnout is determined using Level 3 inputs. Inherent in a Monte Carlo simulation analysis are assumptions related to projected revenues, expected term, volatility, annual revenue yield and interest rate. The interest rate is based on the U.S. Technology B bond yield.
F - 8
LIFEWARD LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The following table summarizes the earnout liability activity as of June 30, 2025 (in thousands):
|
Earnout
|
||||
|
Balance December 31, 2024
|
$
|
|
||
|
Change in fair value
|
|
(
|
)
|
|
|
Balance June 30, 2025
|
$
|
|
||
Earnout payments
As the revenue target for the first earnout payment was not met, no earnout payment was made for the first earnout period.
During the three months ended June 30, 2025, the Company determined that the performance targets for the remaining earnout period will not be met and, accordingly, the Company eliminated the entire earnout liability.
| b. |
Revenue Recognition
|
The Company generates revenues from sales of products. The Company sells its products directly to end customers and through distributors. The Company sells its products to clinics and rehabilitation centers, professional and college sports teams, private individuals (who finance the purchases by themselves, through fundraising or reimbursement coverage from insurance companies), and distributors.
Disaggregation of Revenues (in thousands):
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
|
June 30,
|
June 30,
|
|||||||||||||||
|
2025
|
2024
|
2025
|
2024
|
|||||||||||||
|
Product
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Lease
|
|
|
|
|
||||||||||||
|
Service and warranty
|
|
|
|
|
||||||||||||
|
Total Revenues
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Product revenue
Revenue from Products sold to rehabilitation facilities and end users is recognized at a point in time once the customer has obtained the legal title to the items purchased.
For ReWalk and ReStore systems sold to rehabilitation facilities, the Company provides an immaterial level of training and considers the elements in the arrangement to be a single performance obligation. Therefore, the Company recognizes revenue for the system and training only after delivery in accordance with the agreement's delivery terms to the customer and after the training has been completed.
For sales of ReWalk systems to end users, the Company does not provide training to the end user as this training is provided separately by the rehabilitation center that the end user chooses to use. Similarly, for sales of ReWalk systems to third party distributors, the Company does not provide training to the distributor because the distributor would previously have completed the ReWalk Training program. Therefore, in both cases the Company recognizes revenue upon delivery.
The Company generally does not grant a right of return for its products. In the rare circumstances when the Company provides a right of return for its products, the Company records reductions to revenue for expected future product returns based on the Company’s historical experience and estimates.
The Company offered five products: (1) ReWalk Personal, (2) ReWalk Rehabilitation, (3) AlterG Anti-Gravity system, (4) MyoCycle, and (5) ReStore.
F - 9
LIFEWARD LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
ReWalk Personal and ReWalk Rehabilitation are SCI Products, which are currently designed for everyday use by paraplegic individuals at home and in their communities. SCI Products are custom fitted for each user, as well as for use by paraplegic patients in the clinical rehabilitation environment, where they provide individuals access to valuable exercise and therapy. ReWalk Rehabilitation is a ReWalk Personal product sold with multiple sizes of the Company’s adjustable parts to allow different users the ability to train within a clinic.
With the recent establishment of a Medicare reimbursement pathway for the ReWalk product, the Company includes variable consideration in the form of implicit price concessions if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. The Company reassesses variable consideration at each reporting period and, if necessary, these estimates are adjusted to reflect the anticipated amounts to be collected when those facts and circumstances become known.
The AlterG Anti-Gravity systems are used in physical and neurological rehabilitation and athletic training, both domestically and internationally. This transformative technology uses patented, NASA-derived DAP technology to reduce the effects of gravity and allow people to move with finely calibrated support and reduced pain.
The ReStore is a powered, lightweight soft exo-suit intended for use in the rehabilitation of individuals with lower limb disability due to stroke in the clinical rehabilitation environment.
The Company also sells the MyoCycle, which uses Functional Electrical Stimulation (“FES”) technology, in the United States for use at home or in clinic.
Lease revenue
Rental revenue for the AlterG Anti-Gravity systems is accounted for under ASC Topic 842, Leases. The Company rents its products to customers for a fixed monthly fee over the rental term, which typically ranges from 2 to 3 years. Rental revenues are recorded as earned on a monthly basis.
The Company also offers the SCI Products in a rent-to-purchase model in which the Company recognizes revenue ratably according to the agreed rental monthly fee for a limited period prior to selling its products.
Service and warranties
The Company services its products after expiration of the initial warranty. Service revenue, consisting of time and materials to perform the repairs, is recorded as services are rendered, which corresponds with the period in which the related expenses are incurred.
Warranties are classified as either an assurance type or a service type warranty. A warranty is considered an assurance type warranty if it provides the customer with assurance that the product will function as intended for a limited period of time. An assurance type warranty is not accounted for as a separate performance obligation under the revenue model.
In recent years, SCI Products have included a . The first two years are considered as an assurance type warranty and the additional period is considered an extended service arrangement, which is a service type warranty. A service type warranty is either sold with a unit or separately for a unit for which the warranty has expired. A service type warranty is accounted as a separate performance obligation and revenue is recognized ratably over the life of the warranty. With the recent establishment of a Medicare reimbursement pathway, the Company will offer its SCI Products to qualified Medicare beneficiaries with a two-year assurance type warranty only.
The ReStore device is sold with a two-year warranty which is considered as assurance type warranty.
The Distributed Product is sold with an assurance type warranty ranging from between one year to ten years, depending on the specific product and part.
For AlterG Anti-Gravity Products, the Company offers extended warranty contracts that provide the technical support, parts, and labor coverage offered as part of the base warranty to the period after the base warranty has expired. Extended warranty revenue is recognized ratably over the extended warranty coverage period. The Company offers a one-year assurance type warranty to customers in the U.S. and two years assurance type warranty for spare parts only to its international distributors. For these products, the Company determines standalone selling price based on the price at which the performance obligation is sold separately.
Contract balances (in thousands):
|
June 30,
|
December 31,
|
|||||||
|
2025
|
2024
|
|||||||
|
Trade receivable, net of credit losses (1)
|
$
|
|
$
|
|
||||
|
Deferred revenues (1) (2)
|
$
|
|
$
|
|
||||
| (1) |
Balance presented net of unrecognized revenues that were not yet collected.
|
| (2) |
During the six months ended June 30, 2025, $
|
Deferred revenue is composed primarily of unearned revenue related to service type warranty obligations, multi-year services contracts, as well as other advances and payments which the Company received from customers prior to satisfying the performance obligation, for which revenue has not yet been recognized.
The Company’s unearned performance obligations as of June 30, 2025 and the estimated revenue expected to be recognized in the future related to the service type warranty amounts to $2.4 million, which will be fulfilled over one to five years.
F - 10
LIFEWARD LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
| c. |
Concentrations of Credit Risks:
|
The below table reflects the concentration of credit risk for the Company’s current customers as of June 30, 2025, to which substantial sales were made:
|
|
June 30,
|
December 31,
|
||||||
|
|
2025
|
2024
|
||||||
|
Customer A
|
|
%
|
|
%
|
||||
The allowance for credit losses is based on the Company’s assessment of the collectability of accounts. The Company regularly assessed collectability based on a combination of factors, including an assessment of the current customer’s aging balance, the nature and size of the customer, the financial condition of the customer, and future expected economic conditions. Trade receivables deemed uncollectable are charged against the allowance for credit losses when identified. As of June 30, 2025, and December 31, 2024, trade receivables are presented net of allowance for credit losses in the amount of $0.2
For the three and six months ended June 30, 2025, the Company recorded provisions for doubtful accounts of $0.3 million and $0.6 million, respectively. Write-offs, net of recoveries, were $0.3 million for the three-month period and $0.6 million for the six-month period.
| d. |
Warranty provision
|
For assurance-type warranty, the Company records a provision for the estimated cost to repair or replace products under warranty at the time of sale. Factors that affect the Company’s warranty reserve include the number of units sold, historical and anticipated rates of warranty repairs and the cost per repair.
|
|
US Dollars
in
thousands
|
|||
|
Balance at December 31, 2024
|
$
|
|
||
|
Provision
|
|
|||
|
Usage
|
(
|
)
|
||
|
Balance at June 30, 2025
|
$
|
|
||
| e. |
Basic and diluted net loss per ordinary share:
|
Basic and diluted net loss per share was the same for each period presented as the inclusion of all potential shares of ordinary shares and warrants outstanding would have been anti-dilutive.
As of June 30, 2025 and 2024, the total number of ordinary shares related to the outstanding warrants and share option plans aggregated to 8,933,352 and 2,503,297 , respectively, was excluded from the calculations of diluted loss per ordinary share since it would have an anti-dilutive effect.
| f. |
Goodwill and acquired intangible assets |
Goodwill has been recorded in the Company's financial statements resulting from various business combinations. Goodwill represents the excess of the purchase price in a business combination over the fair value of identifiable tangible and intangible assets acquired and liabilities assumed. Goodwill is subject to an annual impairment test.
The Company currently has one reporting unit.
ASC 350, Intangibles—Goodwill and other (“ASC 350”) requires goodwill to be tested for impairment at least annually and, in certain circumstances, between annual tests. The accounting guidance gives the option to perform a qualitative assessment to determine whether further impairment testing is necessary. The qualitative assessment considers events and circumstances that might indicate that a reporting unit's fair value is less than its carrying amount. If it is determined, as a result of the qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative test is performed. The Company elects to perform an annual impairment test of goodwill as of December 31 of each year, or more frequently if impairment indicators are present. During the three months ended June 30, 2025, the Company recorded Goodwill impairment in the amount of $
| g. |
Impairment of Long-Lived Assets
|
The Company’s long-lived assets, including right-of-use (“ROU”) assets and identifiable intangible assets that are subject to amortization, are reviewed for impairment in accordance with ASC 360, “Property, Plant and Equipment” whenever events or changes in circumstances indicate that the carrying amount of an asset (or asset group) may not be recoverable. Recoverability of assets (or asset group) to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.
| h. |
Restricted cash and Other long-term assets:
|
Other long-term assets include long-term prepaid expenses and restricted cash deposits for offices and cars leasing based upon the term of the remaining restrictions.
F - 11
LIFEWARD LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
| i. |
New Accounting Pronouncements
|
Recent Accounting Pronouncements Not Yet Adopted
|
i.
|
In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes - Improvements to Income Tax Disclosures” requiring enhancements and further transparency to certain income tax disclosures, most notably the tax rate reconciliation and income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024 on a prospective basis and retrospective application is permitted. The Company is currently evaluating the impact of this pronouncement on the Company's related consolidated disclosures in its financial statements for the year ending December 31, 2025.
|
| ii. |
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.
|
| iii. |
In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This amendment introduces a practical expedient for the application of the current expected credit loss (“CECL”) model to current accounts receivable and contract assets. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the timing of adoption and impact of this amendment on its consolidated financial statements and related disclosures.
|
NOTE 4: INVENTORIES
The components of inventories are as follows (in thousands):
|
|
June 30,
|
December 31,
|
||||||
|
|
2025
|
2024
|
||||||
|
Finished products
|
$
|
|
$
|
|
||||
|
Work in progress
|
|
|
||||||
|
Raw materials
|
|
|
||||||
|
|
$
|
|
$
|
|
||||
F - 12
LIFEWARD LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 5: GOODWILL AND OTHER INTANGIBLE ASSETS, NET
The Company has $7.5 million of goodwill related to its purchase of LCAI in the third quarter of fiscal year 2023, which has an indefinite life, and is not deductible for tax purposes.
The changes in the carrying amount of goodwill (in thousands):
|
|
US Dollars in thousands |
|||
|
Balance as of December 31, 2024
|
$
|
|
||
|
Goodwill impairment
|
(
|
)
|
||
|
Balance as of June 30, 2025
|
$
|
|
||
The Company periodically analyzes whether any indicators of goodwill impairment have occurred. In the second quarter of 2025, the Company experienced a decline in its stock price resulting in its market capitalization being less than the carrying value of its one reporting unit. Thus, the Company performed quantitative assessments of the Company’s reporting unit. The fair value was determined based on the market approach. The market approach utilizes the Company's market capitalization plus an appropriate control premium. Market capitalization is determined by multiplying the number of common stock outstanding by the market price of its common stock. The control premium is determined by utilizing publicly available data from studies for similar transactions of public companies.
As a result of this assessment, the Company recorded a goodwill impairment of $2.8 million as of June 30, 2025.
The carrying amounts of intangible assets were fully impaired as of December 31, 2024.
The Company evaluates the recoverability of long-lived assets, including property and equipment and intangible assets subject to amortization for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be fully recoverable. Such events and changes may include significant changes in performance relative to expected operating results, significant changes in asset use, significant negative industry or economic trends, and changes in the Company’s business strategy. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If such review indicates that the carrying amount of long-lived assets is not recoverable, the carrying amount of such assets is reduced to fair value. There were no impairment charges to long-lived assets during the periods presented.
NOTE 6: COMMITMENTS AND CONTINGENT LIABILITIES
| a. |
Purchase commitments:
|
The Company has contractual obligations to purchase goods from its contract manufacturer as well as raw materials from different vendors. Purchase obligations do not include contracts that may be canceled without penalty. As of June 30, 2025, non-cancelable outstanding obligations amounted to approximately $7.4 million.
| b. |
Operating lease commitment:
|
| (i) |
|
F - 13
LIFEWARD LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
| (ii) |
|
The Company’s future lease payments for its facilities and cars, which are presented as current maturities of operating leases and non-current operating leases liabilities on the Company’s unaudited condensed consolidated balance sheets as of June 30, 2025 are as follows (in thousands):
|
2025
|
$
|
|
||
|
2026
|
|
|||
|
2027
|
|
|||
|
2028
|
|
|||
|
Total lease payments
|
|
|||
|
Less: imputed interest
|
(
|
)
|
||
|
Present value of future lease payments
|
|
|||
|
Less: current maturities of operating leases
|
|
|||
|
Non-current operating leases
|
$
|
|
||
|
Weighted-average remaining lease term (in years)
|
|
|||
|
Weighted-average discount rate
|
|
%
|
Lease expense under the Company’s operating leases was $0.2 million and $0.3 million for the three months ended June 30, 2025 and 2024 respectively. For the six months ended June 30, 2025 and 2024 the leases expense was $0.4 million and $0.7 million respectively.
| c. |
Royalties
|
The Company’s research and development efforts are financed, in part, through funding from the Israel Innovation Authority (“IIA”). Since the Company’s inception through June 30, 2025, the Company received funding from the IIA in the total amount of $2.8 million. Out of the $2.8 million in funding from the IIA, a total amount of $1.6 million were royalty-bearing grants, $0.4 million was received in consideration of 209 convertible preferred A shares, which converted after the Company’s initial public offering in September 2014 into ordinary shares in a conversion ratio of 1 to 1 , while $0.8 million was received without future obligation. The Company is obligated to pay royalties to the IIA, amounting to 3 % of the sales of the products and other related revenues generated from such projects, up to 100 % of the grants received. The royalty payment obligations also bear interest at the SOFR rate. The obligation to pay these royalties is contingent on actual sales of the applicable products and in the absence of such sales, no payment is required.
As of June 30, 2025, the Company paid royalties to the IIA in the total amount of $
Royalties expenses in cost of revenue were $8 and $2 thousand for the three and six months ended June 30, 2025 and 2024, respectively.
As of June 30, 2025, the contingent liability to the IIA amounted to $1.6 million. The Israeli Research and Development Law provides that know-how developed under an approved research and development program may not be transferred to third parties without the approval of the IIA. Such approval is not required for the sale or export of any products resulting from such research or development. The IIA, under special circumstances, may approve the transfer of IIA-funded know-how outside Israel, in the following cases:
F - 14
LIFEWARD LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(a) the grant recipient pays to the IIA a portion of the sale price paid in consideration for such IIA-funded know-how or in consideration for the sale of the grant recipient itself, as the case may be, which portion will not exceed six times the amount of the grants received plus interest (or three times the amount of the grant received plus interest, in the event that the recipient of the know-how has committed to retain the R&D activities of the grant recipient in Israel after the transfer);
(b) the grant recipient receives know-how from a third party in exchange for its IIA-funded know-how;
(c) such transfer of IIA-funded know-how arises in connection with certain types of cooperation in research and development activities; or (d) If such transfer of know-how arises in connection with a liquidation by reason of insolvency or receivership of the grant recipient.
In accordance with the License Agreement with Harvard, the Company is required to pay royalties on net sales. Refer to note 10 in its 2024 Form 10-K for details regarding the License Agreement.
LCAI earns royalties under a license agreement with a third party and is recognized as earned. Royalty payments for the six months ended June 30, 2025 and 2024, were $0 and $32 thousand, respectively.
| d. |
Liens:
|
As part of the Company’s other long-term assets and restricted cash, an amount of $0.4 million has been pledged as security in respect of a guarantee granted to a third party. Such deposit cannot be pledged to others or withdrawn without the consent of such third party.
| e. |
Legal Claims:
|
Occasionally, the Company is involved in various claims such as product liability claims, lawsuits, regulatory examinations, investigations, and other legal matters arising, for the most part, in the ordinary course of business. The outcome of any pending or threatened litigation and other legal matters is inherently uncertain, and it is possible that resolution of any such matters could result in losses material to the Company’s consolidated results of operations, liquidity, or financial condition. Except as otherwise disclosed herein, the Company is not currently party to any material litigation.
F - 15
LIFEWARD LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 7: SHAREHOLDERS’ EQUITY
| a. |
Reverse share split:
|
At the Company’s 2023 annual general meeting, the Company’s shareholders approved (i) a reverse share split within a range of 1:2 to 1:12, to be effective at the ratio and on a date to be determined by the Board of Directors, and (ii) amendments to the Company’s Articles of Association authorizing an increase in the Company’s authorized share capital (and corresponding authorized number of ordinary shares, proportionally adjusting such number for the reverse share split) so that the maximum number of authorized ordinary shares would be 120 million. In accordance with the shareholder approval, in early March 2024 the Board of Directors of the Company approved a one-for-seven reverse share split of the Company’s ordinary shares , reducing the number of the Company’s issued and outstanding ordinary shares from approximately 60.1 million pre-split shares to approximately 8.6 million post-split shares. The Company’s ordinary shares began trading on a split-adjusted basis on March 15, 2024. Additionally, effective at the same time, the total authorized number of ordinary shares of the Company was adjusted to 25 million post-split shares, the par value per share of the ordinary shares changed to NIS 1.75 and the authorized share capital of the Company changed from NIS 30,000,000 to NIS 43,750,000 . All share and per share data included in these unaudited condensed consolidated financial statements give retroactive effect to the reverse share split for all periods presented.
Upon the effectiveness of the reverse share split, every seven shares were automatically combined and converted into one ordinary share. Appropriate adjustments were also made to all outstanding derivative securities of the Company, including all outstanding equity awards and warrants.
No fractional shares were issued in connection with the reverse share split. Instead, all fractional shares (including shares underlying outstanding equity awards and warrants) were rounded down to the nearest whole number.
| b. |
Share option plans:
|
As of June 30, 2025, and December 31, 2024, no ordinary shares were reserved, as the Company’s 2014 Incentive Compensation Plan (the “2014 Plan”) was terminated on August 19, 2024. On August 1, 2025, the Company’s shareholders approved the Company’s 2025 Incentive Compensation Plan, which became effective on August 1, 2025.
Options to purchase ordinary shares generally vest over four years, with certain options to non-employee directors vesting quarterly over one year. Any option that was forfeited or canceled before expiration was intended to become available for future grants under a share-based compensation plan. However, as of June 30, 2025, no ordinary shares were reserved, as the 2014 Plan was terminated on August 19, 2024, and a new plan had not yet been approved as a replacement.
The fair value for options granted during the six months ended June 30, 2025 and June 30, 2024 was estimated at the date of the grant using a Black-Scholes-Merton option pricing model with the following assumptions:
|
Six Months Ended June 30,
|
||||||||
|
2025
|
2024
|
|||||||
|
Expected volatility
|
|
%
|
|
|||||
|
Risk-free rate
|
|
%
|
|
|||||
|
Dividend yield
|
|
|
||||||
|
Expected term (in years)
|
|
-
|
||||||
|
Share price
|
$
|
|
|
|||||
The fair value of RSUs granted is determined based on the price of the Company's ordinary shares on the date of grant. A summary of employee share options activity during the six months ended June 30, 2025, is as follows:
|
|
Number
|
Weighted
average
exercise
price
|
Weighted
average
remaining
contractual
life (years)
|
Aggregate
intrinsic
value (in
thousands)
|
||||||||||||
|
Options outstanding as of December 31, 2024
|
|
$
|
|
|
$
|
|
||||||||||
|
Granted
|
|
$
|
|
|
-
|
|||||||||||
|
Exercised
|
|
|
-
|
-
|
||||||||||||
|
Forfeited
|
(
|
)
|
|
-
|
-
|
|||||||||||
|
Options outstanding as of June 30, 2025
|
|
$
|
|
|
$
|
|
||||||||||
|
|
||||||||||||||||
|
Options exercisable as of June 30, 2025
|
|
$
|
|
|
$
|
|
||||||||||
The aggregate intrinsic value in the table above represents the total intrinsic value that would have been received by the option holders had all option holders that hold options with positive intrinsic value exercised their options on the last date of the exercise period. No options were exercised during the six months ended June 30, 2025 and 2024.
F - 16
LIFEWARD LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
A summary of employees and non-employees RSUs activity during the six months ended June 30, 2025 is as follows:
|
|
Number of
shares
underlying
outstanding
RSUs
|
Weighted-
average
grant date
fair value
|
||||||
|
Unvested RSUs as of December 31, 2024
|
|
$
|
|
|||||
|
Granted
|
|
|
||||||
|
Vested
|
(
|
)
|
|
|||||
|
Forfeited
|
(
|
)
|
|
|||||
|
Unvested RSUs as of June 30, 2025
|
|
$
|
|
|||||
There were no RSUs granted during the six months ended June 30, 2025, and 2024, respectively.
As of June 30, 2025, there were $1.3 million of total unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the Company's 2014 Plan. This cost is expected to be recognized over a period of approximately 3.93 years.
The number of options and RSUs outstanding as of June 30, 2025 is set forth below, with options separated by range of exercise price.
|
Range of exercise price
|
Options and RSUs outstanding as of
June 30, 2025
|
Weighted average
remaining
contractual
life (years) (1)
|
Options outstanding and exercisable as of
June 30, 2025
|
Weighted average
remaining
contractual
life (years) (1)
|
||||||||||||||
|
RSUs only
|
|
-
|
|
-
|
||||||||||||||
|
$
|
|
|
|
|
-
|
|||||||||||||
|
$
|
|
|
|
|
|
|||||||||||||
|
$
|
|
|
|
|
|
|||||||||||||
|
$
|
|
|
|
|
|
|||||||||||||
|
$
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|||||||||||||||
(1) Calculation of weighted average remaining contractual term does not include the RSUs that were granted, which have an indefinite contractual term.
| c. |
Share-based awards to non-employee consultants:
|
As of June 30, 2025, there are no outstanding options or RSUs held by non-employee consultants.
| d. |
Share-based compensation expense for employees and non-employees:
|
The Company recognized non-cash share-based compensation expenses for both employees and non-employees in the unaudited condensed consolidated statements of operations as follows (in thousands):
|
|
Six Months Ended June 30,
|
|||||||
|
2025
|
2024
|
|||||||
|
Cost of revenues
|
$
|
|
$
|
|
||||
|
Research and development, net
|
|
|
||||||
|
Sales and marketing
|
|
|
||||||
|
General and administrative
|
|
|
||||||
|
Total
|
$
|
|
$
|
|
||||
F - 17
LIFEWARD LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
| e. |
Warrants to purchase ordinary shares:
|
The following table summarizes information about warrants outstanding and exercisable that were classified as equity as of June 30, 2025:
|
Issuance date
|
Warrants
outstanding
|
Exercise price
per warrant
|
Warrants
outstanding
and
exercisable
|
Contractual
term
|
|||||||||
|
|
(number)
|
(number)
|
|
||||||||||
|
December 31, 2015 (1)
|
|
$
|
|
|
See footnote (1)
|
||||||||
|
December 28, 2016 (2)
|
|
$
|
|
|
See footnote (1)
|
||||||||
|
July 6, 2020 (3)
|
|
$
|
|
|
|
||||||||
|
July 6, 2020 (4)
|
|
$
|
|
|
|
||||||||
|
December 8, 2020 (5)
|
|
$
|
|
|
|
||||||||
|
December 8, 2020 (6)
|
|
$
|
|
|
|
||||||||
|
February 26, 2021 (7)
|
|
$
|
|
|
|
||||||||
|
February 26, 2021 (8)
|
|
$
|
|
|
|
||||||||
|
September 29, 2021 (9)
|
|
$
|
|
|
|
||||||||
|
September 29, 2021 (10)
|
|
$
|
|
|
|
||||||||
|
January 8, 2025 (11)
|
|
$
|
|
|
|
||||||||
|
January 8, 2025 (12)
|
|
$
|
|
|
|
||||||||
|
June 26, 2025 (13)
|
|
$
|
|
|
|
||||||||
|
June 26, 2025 (14)
|
|
$
|
|
|
|
||||||||
|
|
|
|
|
||||||||||
| (1) |
Represents warrants for ordinary shares issuable upon an exercise price of $
|
|
(ii)
|
| (2) |
Represents common warrants that were issued as part of the $
|
F - 18
LIFEWARD LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
| (3) |
Represents warrants that were issued to certain institutional purchasers in a private placement in the Company’s registered direct offering of ordinary shares in July 2020. As of June 30, 2025,
|
| (4) |
Represents warrants that were issued to the placement agent as compensation for his role in the Company’s July 2020 registered direct offering.
|
| (5) |
Represents warrants that were issued to certain institutional purchasers in a private placement in the Company’s private placement offering of ordinary shares in December 2020. As of June 30, 2025,
|
| (6) |
Represents warrants that were issued to the placement agent as compensation for its role in the Company’s December 2020 private placement. As of June 30, 2025,
|
| (7) |
Represents warrants that were issued to certain institutional purchasers in a private placement in the Company’s private placement offering of ordinary shares in February 2021.
|
| (8) |
Represents warrants that were issued to the placement agent as compensation for its role in the Company’s February 2021 private placement.
|
| (9) |
Represents warrants that were issued to certain institutional purchasers in a private placement in the Company’s registered direct offering of ordinary shares in September 2021.
|
| (10) |
Represents warrants that were issued to the placement agent as compensation for its role in the Company’s September 2021 registered direct offering.
|
| (11) |
Represents warrants that were issued to certain institutional purchasers in a private placement in the Company’s registered direct offering of ordinary shares in January 2025.
|
| (12) |
Represents warrants that were issued to the placement agent as compensation for its role in the Company’s January 2025 registered direct offering.
|
| (13) |
Represents warrants that were issued to certain institutional investors in connection with the Company’s public offering of ordinary shares in June 2025.
|
| (14) |
Represents warrants that were issued to the placement agent as compensation for its role in the Company’s public offering of ordinary shares in June 2025.
|
| f. |
Equity raise:
|
On January 7, 2025, the Company entered into a purchase agreement with certain institutional investors for the issuance and sale of 1,818,183 ordinary shares and ordinary warrants to purchase up to an aggregate of 1,818,183 ordinary shares at an exercise price of $2.75 per share. Each ordinary share was sold at an offering price of $2.75 . The offering of the ordinary shares and the ordinary shares that are issuable from time to time upon exercise of the warrants was made pursuant to its shelf registration statement on Form S-3 initially filed with the SEC on March 30, 2022, and declared effective by the SEC on May 16, 2022, and the ordinary warrants were issued in a concurrent private placement. The ordinary warrants are exercisable at any time and from time to time, in whole or in part, following the date of issuance and ending three years from the date of issuance. The offering closed on January 8, 2025. Additionally, the Company issued warrants to purchase up to 109,091 ordinary shares, with an exercise price of $3.4375 per share, exercisable at any time and from time to time, in whole or in part, following the date of issuance and ending three years from the date of issuance, to certain representatives of H.C. Wainwright as compensation for its role as the placement agent in the January 2025 private placement offering.
On March 7, 2025, the Company entered into an At-the-Market (ATM) Offering Agreement with H.C. Wainwright & Co., LLC (“HCW”), pursuant to which the Company may, from time to time, offer and sell shares of its ordinary shares having an aggregate offering price of up to $5.5 million, through HCW acting as the Company’s sales agent. Sales of ordinary shares under the ATM program, if any, will be made at prevailing market prices or as otherwise agreed with HCW. The Company is not obligated to make any sales under the agreement and may suspend or terminate the program at any time, at its discretion.
During the three and six months ended June 30, 2025, the Company sold 964,118 1.30 1.3 0.1 0.2 1.0
As of June 30, 2025, approximately $4.2 million remained available for future issuance under the ATM program.
On June 25, 2025, the Company entered into a securities purchase agreement with certain institutional investors for the issuance and sale of 4,000,000 ordinary shares and ordinary warrants to purchase up to an aggregate of 4,000,000 ordinary shares at an exercise price of $0.65 per share. Each ordinary share was sold at a combined offering price of $0.65 together with an ordinary warrant to purchase one ordinary share. The offering of the ordinary shares and the ordinary shares that are issuable from time to time upon exercise of the warrants was made pursuant to its registration statement on Form S-1 initially filed with the SEC on June 20, 2025, and declared effective by the SEC on June 25, 2025. The ordinary warrants are exercisable at any time and from time to time, in whole or in part, following the date of issuance and ending five years from the date of issuance. The offering closed on June 26, 2025. Additionally, the Company issued warrants to purchase up to 240,000 ordinary shares, with an exercise price of $0.8125 per share, exercisable at any time and from time to time, in whole or in part, following the date of issuance and ending five years from the date of issuance, to certain representatives of H.C. Wainwright as compensation for its role as the placement agent in the June 2025 public offering.
The warrants issued in January 2025 private placement and the June 2025 public offering are considered freestanding instruments. As the warrants are indexed to the Company's ordinary shares and are considered equity-classified, they are recorded in shareholders’ equity on the unaudited condensed consolidated balance.
F - 19
LIFEWARD LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 8: FINANCIAL INCOME, NET
The components of financial (expenses) income, net were as follows (in thousands):
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
|
|
2025
|
2024
|
2025
|
2024
|
||||||||||||
|
Foreign currency transactions and other
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
|
Interest Income
|
|
|
|
|
||||||||||||
|
Bank commissions
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
NOTE 9: GEOGRAPHIC INFORMATION AND MAJOR CUSTOMER AND PRODUCT DATA
Summary information about geographic areas:
ASC 280, “Segment Reporting” establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company manages its business on the basis of one reportable segment and unit and derives revenues mainly from products, rental revenues and warranty and services.
The CODM, which is the Company’s chief executive officer, reviews financial information and annual operating plans presented on a consolidated basis, for purposes of making operating decisions, evaluating financial performance, and allocating resources. There is no expense or asset information, that are supplemental to those disclosed in these consolidated financial statements, that are regularly provided to the CODM. The allocation of resources and assessment of performance of the operating segment is based on consolidated net loss as shown in the consolidated statements of operations. The CODM considers net loss in the annual forecasting process and reviews actual results when making decisions about allocating resources. Since the Company operates as one operating segment, financial segment information, including profit or loss and asset information, can be found in the consolidated financial statements.
The following is a summary of revenues within geographic areas (in thousands):
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
|
|
2025
|
2024
|
2025
|
2024
|
||||||||||||
|
Revenues based on customer’s location:
|
||||||||||||||||
|
United States
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Europe
|
|
|
|
|
||||||||||||
|
Asia-Pacific
|
|
|
|
|
||||||||||||
|
Rest of the world
|
|
|
|
|
||||||||||||
|
Total revenues
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
|
June 30,
|
December 31,
|
||||||
|
|
2025
|
2024
|
||||||
|
Long-lived assets by geographic region (*):
|
||||||||
|
Israel
|
$
|
|
$
|
|
||||
|
United States
|
|
|
||||||
|
Germany
|
|
|
||||||
|
|
$
|
|
$
|
|
||||
|
|
(*)
|
Long-lived assets are comprised of property and equipment, net, and operating lease right-of-use assets.
|
|
|
Six Months Ended June 30,
|
|||||||
|
|
2025
|
2024
|
||||||
|
Major customer data as a percentage of total revenues:
|
||||||||
|
Customer A
|
|
%
|
|
%
|
||||
F - 20
LIFEWARD LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 10: SUBSEQUENT EVENT
On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law. This legislation includes changes to U.S. federal tax law, which may be subject to further clarification and the issuance of interpretive guidance. We are assessing the legislation and its effect on our consolidated financial statements.
F - 21
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operation should be read in conjunction with the unaudited condensed consolidated financial statements and the related notes included elsewhere in this quarterly report and with our audited consolidated financial statements included in our Form 10-K for the year ended December 31, 2024 as filed with the Securities and Exchange Commission (“SEC”) on March 7, 2025 (the “2024 Form 10-K”). In addition to historical condensed financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. For a discussion of factors that could cause or contribute to these differences, see “Special Note Regarding Forward-Looking Statements” above.
Overview
We are a medical device company that designs, develops, and commercializes life-changing solutions that span the continuum of care in physical rehabilitation and recovery, delivering proven functional and health benefits in clinical settings as well as in the home and community. Our initial product offerings were the ReWalk Personal and ReWalk Rehabilitation Exoskeleton devices for individuals with spinal cord injury (“SCI Products”). These devices are robotic exoskeletons that are designed for individuals with paraplegia that use our patented tilt-sensor technology and an onboard computer and motion sensors to drive motorized legs that power movement. These SCI Products allow individuals with spinal cord injury (“SCI”) the ability to stand and walk again during everyday activities at home or in the community. In March 2023, we received clearance of our premarket notification (“510(k)”) from the U.S. Food and Drug Administration (“FDA”) for the ReWalk Personal Exoskeleton with stair and curb functionality, which adds usage on stairs and curbs to the indication for use for the device in the U.S. The clearance permits U.S. customers to participate in more walking activities in real-world environments in their daily lives where stairs or curbs may have previously limited them when using the exoskeleton for its intended, FDA-indicated uses. This feature has been available in Europe since initial CE Clearance, and real-world data from a cohort of 47 European users throughout a period of over seven years consisting of over 18,000 stair steps was collected to demonstrate the safety and efficacy of this feature and support the FDA submission. In June 2024, we submitted to the FDA a 510(k) premarket notification for ReWalk 7 Personal Exoskeleton device, a next-generation ReWalk model, and such 510(k) is pending FDA review. In June 2025, an Administrative Law Judge (“ALJ”) ruled in favor of a Medicare beneficiary’s appeal and determined that their ReWalk Personal Exoskeleton shall be covered and reimbursed by Medicare as a “reasonable and necessary” medical device that enables walking after SCI. This ruling established a legal basis that the ReWalk system constitutes a reasonable and necessary medical intervention for paralyzed individuals.
We have sought to expand our product offerings beyond the SCI Products through internal development, distribution agreements, and acquisitions. We have developed our ReStore Exo-Suit device, which we began commercializing in June 2019 (we ceased sales in the European Union in May 2024). The ReStore is a powered, lightweight soft exo-suit intended for use during the rehabilitation of individuals with lower limb disabilities due to stroke. In the second quarter of 2020, we signed an agreement to become the exclusive distributor of the MYOLYN MyoCycle FES Pro cycles to U.S. rehabilitation clinics and for the MyoCycle Home cycles available to U.S. veterans through the Veterans Health Administration (“VHA”) hospitals.
In August 2023, we made our first acquisition to supplement our internal growth when we acquired AlterG, a leading provider of Anti-Gravity systems for use in physical and neurological rehabilitation. We paid a cash purchase price of approximately $19 million at closing and additional cash earnout payments may be paid based upon a percentage of AlterG’s revenue growth over the two years following the closing. The AlterG Anti-Gravity systems use patented, National Aeronautics and Space Administration (“NASA”) derived differential air pressure (“DAP”) technology to reduce the effects of gravity and allow patients to rehabilitate with finely calibrated support and reduced pain. AlterG Anti-Gravity systems are utilized in over 4,000 facilities globally in more than 40 countries. We will continue to evaluate other products for distribution or acquisition that can broaden our product offerings further to help individuals with neurological injury and disability.
In March 2025, we announced an agreement with CorLife, LLC., a Delaware limited liability company (“CorLife”) and a division of Numotion, the nation’s leading and largest provider of products and services that provide mobility, health and personal independence, to increase our penetration of SCI Products into the workers’ compensation market. Pursuant to the agreement, CorLife became the exclusive distributor for the ReWalk Personal Exoskeleton for individuals with workers’ compensation claims. The agreement leverages CorLife’s extensive network of credentialed providers and experts to include the ReWalk Personal Exoskeleton among the services and equipment they provide to thousands of injured workers each year. Under the agreement, the CorLife reimbursement team manages all workers’ compensation claims submissions for the ReWalk Personal Exoskeleton. We believe this agreement will build awareness of the benefits of the ReWalk Personal Exoskeleton among individuals with workers’ compensation coverage and gain us access to the resources of CorLife to facilitate efficient processing of claims.
We are in the research stage of ReBoot, a personal soft exo-suit for home and community use by individuals post-stroke, and we are currently evaluating the reimbursement landscape and the potential clinical impact of this device. This product would be a complementary product to ReStore as it provides active assistance to the ankle during plantar flexion and dorsiflexion for gait and mobility improvement in the home environment, and it received Breakthrough Device Designation from the FDA in November 2021. Further investment in the development path of the ReBoot was paused in 2023 pending determination regarding the clinical and commercial opportunity of this device and at this time it remains on hold.
Our principal markets are primarily in the United States and Europe with some lesser sales in Asia, the Middle East and South America. We sell our products primarily directly in the United States, through a combination of direct sales and distributors (depending on the product line) in Germany and Canada, and primarily through distributors in other markets. In markets where we sell direct to customers, we have established relationships with clinics and rehabilitation centers, professional and college sports teams, and individuals and organizations in the SCI community, and in markets where we do not sell direct to customers, our distributors maintain these relationships. We have primary offices in Yokneam, Israel, Marlborough, Massachusetts, and Berlin, Germany. We also had offices in Fremont, California and Queens, New York where we ceased operations as of December 31, 2024.
1
We have in the past generated and expect to generate in the future revenue from a combination of clinics and rehabilitation centers, commercial distributors, third-party payors (including private and government payors), professional and college sports teams, and self-pay individuals. While a broad uniform policy of coverage and reimbursement by third-party commercial payors currently does not exist in the United States for exoskeleton technologies such as the ReWalk Personal Exoskeleton, we are pursuing various paths of reimbursement and support fundraising efforts by institutions and clinics, such as the VHA policy that was issued in December 2015 for the evaluation, training, and procurement of ReWalk Personal Exoskeleton systems for all qualifying veterans living with SCI across the United States.
We have also been pursuing updates with the CMS to clarify the Medicare coverage category (i.e., benefit category) applicable for personal exoskeletons. In 2022, the National Spinal Cord Injury Statistical Center (“NSCISC”), which maintains the world’s largest database on spinal cord injury research, reported that CMS is the primary payor for approximately 57% of the SCI population which are at least five years post their injury date, with Medicare representing a majority of this percentage. In July 2020, following a successful submission and hearing process, a code was issued for ReWalk Personal Exoskeleton, which may be used for purposes of claim submission to Medicare, Medicaid, and other payors.
On November 1, 2023, CMS released the Calendar Year 2024 Home Health Prospective Payment System Final Rule, CMS-1780-F (“Final Rule”), which was adopted
On April 11, 2024, CMS revised its April 2024 Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (“DMEPOS”) Fee Schedule to include a final lump-sum Medicare purchase fee schedule amount for personal exoskeletons (HCPCS code K1007) with an established rate of $91,032. The final payment determination was made by CMS by applying a “gap filling” process, which was used in light of CMS determining that the code describing the technology has no fee schedule pricing history and that lower extremity exoskeletons incorporate “revolutionary features” that cannot be described by or considered comparable to any other existing code or combination of codes. As part of gap-filling, CMS utilizes verifiable supplier or commercial pricing information and adjusts this pricing information according to a deflation and update factor methodology. In applying this formula to the K1007 code describing the ReWalk Personal Exoskeleton, CMS says that it calculated this final payment amount by averaging pricing information for exoskeleton devices from Lifeward and other manufacturers.
In Germany, we continue to make progress toward achieving coverage from the various government, private and worker’s compensation payors for our SCI Products. In September 2017, each of German insurer BARMER GEK (“BARMER”) and national social accident insurance provider Deutsche Gesetzliche Unfallversicherung (“DGUV”) indicated that they will provide coverage to users who meet certain inclusion and exclusion criteria. In February 2018, the head office of German Statutory Health Insurance (“SHI”) Spitzenverband (“GKV”) confirmed its decision to list the ReWalk Personal Exoskeleton system in the German Medical Device Directory. This decision means that ReWalk is listed among all medical devices for compensation, which SHI providers can procure for any approved beneficiary on a case-by-case basis. During the year 2020 and 2021, we announced several new agreements with German SHIs, including TK and DAK Gesundheit, as well as the first German Private Health Insurer (“PHI”), which outline the process of obtaining our devices for eligible insured patients. In February 2025, we finalized an agreement with BARMER to formalize the reimbursement process for the provision of ReWalk exoskeletons to medically eligible beneficiaries. We are also currently working with several additional SHIs on securing a formal operating contract that will establish the process of obtaining a ReWalk Personal Exoskeleton for their beneficiaries within their system. Additionally, to date, several private insurers in the United States and Europe are providing reimbursement for ReWalk in certain cases.
2
Second Quarter 2025 Business Highlights
| • |
Achieved FDA clearance and subsequent U.S. launch in April 2025 for the ReWalk 7, the latest innovation in the ReWalk pipeline, with over 20 ReWalk 7 units installed to date with overwhelmingly positive feedback from customers.
|
|
• |
Expanded and advanced the pipeline of qualified leads for the ReWalk and achieved the highest quarterly total of ReWalk units placed for Medicare beneficiaries since fee schedule established in April 2024. |
|
| • |
Continued expansion of U.S. payer base for the ReWalk Personal Exoskeleton. On the Medicare front, a ruling by an Administrative Law Judge established a legal basis for medical necessity by affirming that the ReWalk Personal Exoskeleton is “reasonable and necessary” for a Medicare beneficiary. Additionally, the partnership with CorLife, a division of NuMotion, has already facilitated and accelerated processing for workers compensation claims, with the first paid claim.
|
| • |
Improved quarterly cash burn to $3.9 million, down from $5.6 million in Q2 2024 and $5.5 million in Q1 2025, driven by operational efficiencies, facility consolidations, and other cost reduction initiatives.
|
| • |
Successfully transitioned to in-house manufacturing of the ReWalk Personal Exoskeleton during Q2, concluding the Company’s agreement with Sanmina and delivering cost savings, improved quality control, and greater production flexibility.
|
|
|
• |
Strengthened the Company’s executive leadership with the appointment of Mark Grant as Lifeward’s President and CEO and Almog Adar as Lifeward’s CFO to bolster the Company’s strategic initiatives toward sustainable growth. |
Results of Operations for the Three and Six Months Ended June 30, 2025 and June 30, 2024
Our operating results for the three and six months ended June 30, 2025, as compared to the same period in 2024, are presented below. The results set forth below are not necessarily indicative of the results to be expected in future periods.
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
|
|
2025
|
2024
|
2025
|
2024
|
||||||||||||
|
Revenues
|
$
|
5,724
|
$
|
6,707
|
$
|
10,758
|
$
|
11,990
|
||||||||
|
Cost of revenues
|
3,213
|
3,950
|
6,125
|
7,838
|
||||||||||||
|
|
||||||||||||||||
|
Gross profit
|
2,511
|
2,757
|
4,633
|
4,152
|
||||||||||||
|
|
||||||||||||||||
|
Operating expenses:
|
||||||||||||||||
|
Research and development, net
|
767
|
1,205
|
1,685
|
2,496
|
||||||||||||
|
Sales and marketing
|
3,785
|
4,403
|
7,622
|
9,417
|
||||||||||||
|
General and administrative
|
1,739
|
1,592
|
3,959
|
3,184
|
||||||||||||
|
Impairment charges
|
2,783
|
—
|
2,783
|
—
|
||||||||||||
|
|
||||||||||||||||
|
Total operating expenses
|
9,074
|
7,200
|
16,049
|
15,097
|
||||||||||||
|
|
||||||||||||||||
|
Operating loss
|
(6,563
|
)
|
(4,443
|
)
|
(11,416
|
)
|
(10,945
|
)
|
||||||||
|
Financial income, net
|
1 |
144
|
31
|
376
|
||||||||||||
|
|
||||||||||||||||
|
Loss before income taxes
|
(6,562
|
)
|
(4,299
|
)
|
(11,385
|
)
|
(10,569
|
)
|
||||||||
|
Taxes on income
|
—
|
5
|
11
|
11
|
||||||||||||
|
|
||||||||||||||||
|
Net loss
|
$
|
(6,562
|
)
|
$
|
(4,304
|
)
|
$
|
(11,396
|
)
|
$
|
(10,580
|
)
|
||||
|
|
||||||||||||||||
|
Net loss per ordinary share, basic and diluted
|
$
|
(0.58
|
)
|
$
|
(0.50
|
)
|
$
|
(1.05
|
)
|
$
|
(1.23
|
)
|
||||
|
|
||||||||||||||||
|
Weighted average number of shares used in computing net loss per ordinary share,
basic and diluted |
11,229,427
|
8,608,937
|
10,858,580
|
8,599,520
|
||||||||||||
3
Three and Six Months Ended June 30, 2025 Compared to Three and Six Months Ended June 30, 2024
Revenue
Our revenue for the three and six months ended June 30, 2025 and 2024 was as follows (in thousands):
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
|
|
2025
|
2024
|
2025
|
2024
|
||||||||||||
|
Revenues
|
$
|
5,724
|
$
|
6,707
|
$
|
10,758
|
$
|
$ 11,990
|
||||||||
Revenues are derived from the sale of ReWalk, AlterG, ReStore, and MyoCycle systems. We also generate revenue from the sale of extended warranties and the provision of repair services for the products that we sell.
Revenues decreased by $1.0 million, or 14.7%, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, primarily due to the one-time Medicare- related revenue recognized in the second quarter of 2024 for claims submitted in 2023 and the first quarter of 2024.
Revenues decreased by $1.2 million, or 10.3%, for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. This decrease is primarily attributable to elevated Medicare-related revenue in the first half of 2024, reflecting payments for 2023 claims recognized in both the first and second quarters and additional one-time payments for first quarter 2024 claims recognized in the second quarter, as well as lower sales volume of MyoCycle units.
In the future, we expect our growth to be driven by sales of our ReWalk Personal Exoskeleton through expansion of coverage and reimbursement by commercial and government third-party payors, more shipments of our AlterG Anti-Gravity system through greater penetration of rehabilitation clinics in the U.S. and internationally, and more placements of the MyoCycle device with rehabilitation clinics and personal users.
Gross Profit
Our gross profit for the three and six months ended June 30, 2025 and 2024 was as follows (in thousands):
|
|
Three months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
|
|
2025
|
2024
|
2025
|
2024
|
||||||||||||
|
Gross profit
|
2,511
|
2,757
|
4,633
|
4,152
|
||||||||||||
Gross profit was 43.9% of revenue for the three months ended June 30, 2025, compared to 41.1% for the three months ended June 30, 2024. Gross profit for the three months ended June 30, 2024, included $0.4 million for amortization of intangible assets. Excluding the impact of the amortization of intangible assets, gross profit as a percentage of revenue was 46.9% for the three months ended June 30, 2024. The decrease primarily reflects the absence of a one-time benefit from Medicare-related revenue recognized in the prior year’s second quarter, for which the related costs had been recorded in prior periods.
Gross profit was 43.1% of revenue for the six months ended June 30, 2025, compared to 34.6% of revenue, for the six months ended June 30, 2024. Gross profit for the six months ended June 30, 2024, included $0.8 million for amortization of intangible assets. Excluding the impact of the amortization of intangible assets, gross profit as a percentage of revenue was 41.1% for the six months ended June 30, 2024. The increase was driven by lower production costs following the December 2024 closure of our Fremont manufacturing facility in California and the transition of production to a contract manufacturer, which has already begun to contribute to improved margins in 2025.
We expect gross profit and gross profit as a percentage of revenue to increase as we grow revenue volumes and realize operating efficiencies associated with greater scale, which will reduce the cost of revenue as a percentage of revenue. In addition, gross profit as a percentage of revenue is expected to benefit from the closure of our Fremont manufacturing facility in December 2024, the full transition of AlterG production to a contract manufacturer, which has already begun to contribute to improved margins in the first half of 2025, and the recent transition of ReWalk production in-house, which is expected to generate cost savings and margin improvements in future periods. These improvements may be partially offset by increased material costs, shipping costs, and costs of service.
Research and Development Expenses, net
Our research and development expenses, net, for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):
|
|
Three months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
|
|
2025
|
2024
|
2025
|
2024
|
||||||||||||
|
Research and development, net
|
767
|
1,205
|
1,685
|
2,496
|
||||||||||||
Research and development expenses were $0.8 million for the three months ended June 30, 2025, a decrease of $0.4 million, or 36.3%, compared to the three months ended June 30, 2024. The decrease was primarily attributable to the completion of the development program for the ReWalk 7 and the AlterG NEO.
Research and development expenses were $1.7 million for the six months ended June 30, 2025, a decrease of $0.8 million, or 32.5%, compared to the six months ended June 30, 2024. The decrease was primarily attributable to the completion of the development program for the ReWalk 7 and the AlterG NEO.
We intend to focus our research and development resources primarily on supporting our current products and making design enhancements to reduce the material costs for our ReWalk and AlterG product lines.
4
Sales and Marketing Expenses
Our sales and marketing expenses for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
|
|
2025
|
2024
|
2025
|
2024
|
||||||||||||
|
Sales and marketing
|
3,785
|
4,403
|
7,622
|
9,417
|
||||||||||||
Sales and marketing expenses were $3.8 million for the three months ended June 30, 2025, a decrease of $0.6 million, or 14.0%, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024. Sales and marketing expenses for the three months ended June 30, 2024 included $0.4 million of amortization of intangible assets from the acquisition of AlterG. Additional drivers of the decrease include a reduction in reimbursement and marketing consultants.
Sales and marketing expenses were $7.6 million for the six months ended June 30, 2025, a decrease of $1.8 million, or 19.1%, for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. Sales and marketing expenses for the six months ended June 30, 2024 included $0.8 million of amortization of intangible assets from the acquisition of AlterG. Additional drivers of the decrease Additional drivers of the decrease include a reduction in reimbursement and marketing consultants and lower promotional spending.
Our sales and marketing efforts are expected to focus on driving growth in our commercial product portfolio, expanding the reimbursement coverage by commercial payors of our ReWalk Personal Exoskeleton device, and expanding the commercial and clinical capabilities of the Lifeward organization.
General and Administrative Expenses
Our general and administrative expenses for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
|
|
2025
|
2024
|
2025
|
2024
|
||||||||||||
|
General and administrative
|
1,739
|
1,592
|
3,959
|
3,184
|
||||||||||||
General and administrative expenses were $1.7 million for the three months ended June 30, 2025, an increase of $0.1 million, or 9.2%, compared to the same period in 2024. General and administrative expenses in the three months ended June 30, 2024, included a net benefit of $0.5 million related to income recognized from post-closing adjustments in connection with the acquisition of AlterG. The increase in the current period was also driven by a $0.4 million bad debt expense, primarily associated with the resolution of certain outstanding Medicare claims, and restructuring costs partially offset by eliminating the earnout liability.
General and administrative expenses were $4.0 million for the six months ended June 30, 2025, an increase of $0.8 million, or 24.3%, compared to the same period in 2024. General and administrative expenses in the six months ended June 30, 2024, included a net benefit of $0.5 million related to income recognized from post-closing adjustments in connection with the acquisition of AlterG. The increase in the current period was also driven by a $0.6 million bad debt expense, primarily associated with the resolution of certain outstanding Medicare claims, and restructuring costs partially offset by eliminating the earnout liability.
Impairment Charges
Our impairment charges for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
|
|
2025
|
2024
|
2025
|
2024
|
||||||||||||
|
Impairment charges
|
2,783
|
—
|
2,783
|
—
|
||||||||||||
During the three and six months ended June 30, 2025, we recorded a goodwill impairment charge of $2.8 million primarily resulting from a sustained decline in our share price, which constituted a triggering event under ASC 350 and indicated that our market capitalization was below our carrying value. This impairment does not impact our liquidity or ongoing operations.
5
Financial Income, Net
Our financial income, net, for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
|
|
2025
|
2024
|
2025
|
2024
|
||||||||||||
|
Financial income, net
|
1
|
144
|
31
|
376
|
||||||||||||
Financial income, net, decreased by $0.1 million, or 99.3%, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024.
Financial income, net, decreased by $0.3 million, or 91.8%, for the six months ended June 30, 2025, compared to the six months ended June 30, 2024.
The decrease was primarily attributable to lower yields on a reduced cash balance, reflecting fewer funds on deposit.
Income Taxes
Our income tax for the three and six months ended June 30, 2025 and 2024 was as follows (in thousands):
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
|
|
2025
|
2024
|
2025
|
2024
|
||||||||||||
|
Taxes on income
|
—
|
5
|
11
|
11
|
||||||||||||
Income taxes decreased by $5 thousand, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, mainly due to deferred taxes and timing differences in our subsidiaries.
For the six months ended June 30, 2025 and 2024, income taxes were $11 thousand in each period, reflecting taxes incurred in Germany under our transfer pricing model.
6
Critical Accounting Policies and Estimates
Our condensed consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of our condensed financial statements requires us to make estimates, judgments and assumptions that can affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates, judgments, and assumptions on historical experience and other factors that we believe to be reasonable under the circumstances. Materially different results can occur as circumstances change and additional information becomes known. Besides the estimates identified above that are considered critical, we make many other accounting estimates in preparing our condensed financial statements and related disclosures. See Note 2 to our audited consolidated financial statements included in our 2024 Form 10-K for a description of the significant accounting policies that we used to prepare our consolidated financial statements.
There have been no material changes to our critical accounting policies or our critical judgments from the information provided in “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies” of our 2024 Form 10-K, except for the updates provided in Note 3 of our unaudited condensed consolidated financial statements set forth in “Part I, Item 1. Financial Statements” of this quarterly report.
Recent Accounting Pronouncements
See Note 3 to our unaudited condensed consolidated financial statements set forth in “Part I, Item 1. Financial Statements” of this quarterly report for information regarding new accounting pronouncements.
Liquidity and Capital Resources
Sources of Liquidity and Outlook
Since inception, we have funded our operations primarily through the sale of certain of our equity securities and convertible notes to investors in private placements, the sale of our ordinary shares in public offerings and the incurrence of bank debt.
As of June 30, 2025, we had cash and cash equivalents of $5.1 million. We had an accumulated deficit in the total amount of $276.2 million as of June 30, 2025 and further losses are anticipated in the development of its business. Those factors raise substantial doubt about our ability to continue as a going concern. The ability to continue as a going concern is dependent upon us obtaining the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. Based on our current operating plan, we believe that our existing cash resources will be sufficient to fund operations into the fourth quarter of 2025.
We intend to finance operating costs over the next twelve months with existing cash on hand, potential reduction in operating cash burn, future issuances of equity and debt securities, or through a combination of the foregoing. However, we will also need to seek additional sources of financing if we require more funds than anticipated during the next 12 months or in later periods.
The accompanying unaudited condensed consolidated financial statements have been prepared assuming we will continue as a going concern, which contemplates the realization of assets and liabilities and commitments in the normal course of business. The consolidated financial statements for the six months ended June 30, 2025 do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from uncertainty related to our ability to continue as a going concern.
We expect to incur future net losses and our transition to profitability is dependent upon, among other things, the successful development and commercialization of our products and product candidates, the establishment of contracts for the distribution of new product lines, or the acquisition of additional product lines, any of which, or in combination, would contribute to the achievement of a level of revenue adequate to support our cost structure. Until we achieve profitability or generate positive cash flows, we will continue to need to raise additional cash from time to time.
We intend to fund future operations through cash on hand, additional private and/or public offerings of debt or equity securities, cash exercises of outstanding warrants or a combination of the foregoing. In addition, we may seek additional capital through arrangements with strategic partners or from other sources and we will continue to address our cost structure. Notwithstanding, there can be no assurance that we will be able to raise additional funds or achieve or sustain profitability or positive cash flows from operations.
Our anticipated primary uses of cash are funding (i) sales, marketing, and promotion activities related to market development for our ReWalk Personal Exoskeleton device and AlterG Anti-Gravity system, broadening third-party payor and CMS coverage for our ReWalk Personal Exoskeleton device and commercializing our new product lines added through distribution agreements; (ii) development of future generation designs for our ReWalk device, new AlterG products utilizing DAP technology, and our lightweight exo-suit technology for potential home personal health utilization for multiple indications; (iii) routine product updates; (iv) potential acquisitions of businesses, such as our recent acquisition of AlterG, and (v) general corporate purposes, including working capital needs. Our future cash requirements will depend on many factors, including our rate of revenue growth, the expansion of our sales and marketing activities, the timing and extent of our spending on research and development efforts, the attractiveness of potential acquisition candidates and international expansion. Based on our current estimates of revenue, expenses and capital and liquidity requirements, we may seek to sell additional equity or debt securities, arrange for additional bank debt financing, or refinance our indebtedness. There can be no assurance that we will be able to raise such funds on acceptable terms. For more information, see “Part I, Item 1A. Risk Factors-We have concluded that there is substantial doubt as to our ability to continue as a going concern” of our 2024 Form 10-K.
Further, on August 5, 2025, we received a deficiency letter from the Nasdaq Stock Market LLC (“Nasdaq”) notifying us that because the closing bid price of our ordinary shares had been below the minimum $1.00 per share for 30 consecutive business days, we are out of compliance with the requirements for continued listing on Nasdaq, and are subject to potential delisting. If we are unable to re-achieve compliance with the Nasdaq listing requirements within 180 days, or February 2, 2026, after receipt of a delisting notice, and if we are unable to obtain an extension therefore, we would be subject to delisting, which likely would further impair the liquidity and value of our ordinary shares.
Equity Raises
Use of Form S-3
Beginning with the filing of our Form 10-K on February 17, 2017, we were subject to limitations under the applicable rules of Form S-3, which constrained our ability to secure capital with respect to public offerings pursuant to our effective Form S-3. These rules limit the size of primary securities offerings conducted by issuers with a public float of less than $75 million to no more than one-third of their public float in any 12-month period. At the time of filing our 2024 Form 10-K, on March 7, 2025, we were subject to these limitations because our public float did not reach at least $75 million in the 60 days preceding the filing of our 2024 Form 10-K. We will continue to be subject to these limitations for the remainder of the 2024 fiscal year and until the earlier of such time as our public float reaches at least $75 million or when we file our next annual report for the year ended December 31, 2025, at which time we will be required to re-test our status under these rules. If our public float is below $75 million as of the filing of our next annual report on Form 10-K, or at the time we file a new Form S-3, we will continue to be subject to these limitations, until the date that our public float again reaches $75 million. These limitations do not apply to secondary offerings for the resale of our ordinary shares or other securities by selling shareholders or to the issuance of ordinary shares upon conversion by holders of convertible securities, such as warrants. We have registered up to $100 million of ordinary shares warrants and/or debt securities and certain other outstanding securities with registration rights on our registration statement on Form S-3, which was declared effective by the SEC in May 2022 (the “2022 Shelf Registration Statement”). On May 15, 2025, we filed a new registration statement on Form S-3 (the “2025 Shelf Registration Statement”) to register up to $100 million of ordinary shares, warrants and/or debt securities, which has not yet been declared effective by the SEC. The 2022 Shelf Registration Statement expired on May 16, 2025, however, pursuant to Rule 415 of the Securities Act, we are permitted to continue making offers and sales of securities covered by the 2022 Shelf Registration Statement and prospectus supplements thereto until the earlier of the effective date of the 2025 Shelf Registration Statement or 180 days after May 16, 2025.
7
Equity Offerings
On January 7, 2025, we entered into a purchase agreement with certain institutional investors for the issuance and sale of 1,818,183 ordinary shares and ordinary warrants to purchase up to an aggregate of 1,818,183 ordinary shares at an exercise price of $2.75 per share. Each ordinary share was sold at an offering price of $2.75. The offering of the ordinary shares and the ordinary shares that are issuable from time to time upon exercise of the warrants was made pursuant to our 2022 Shelf Registration Statement, and the ordinary warrants were issued in a concurrent private placement. The ordinary warrants are exercisable at any time and from time to time, in whole or in part, following the date of issuance and ending three years from the date of issuance. The offering closed on January 8, 2025. Additionally, we issued warrants to purchase up to 109,091 ordinary shares, with an exercise price of $3.4375 per share, exercisable at any time and from time to time, in whole or in part, following the date of issuance and ending three years from the date of issuance, to certain representatives of H.C. Wainwright & Co., LLC (“HCW”) as compensation for its role as the placement agent in January 2025 private placement offering.
On March 7, 2025, we entered into an at-the-market offering agreement (the “ATM Agreement”) with HCW pursuant to which we may issue and sell our ordinary shares from time to time through HCW acting as sales agent or principal. The ATM Agreement provides that HCW will be entitled to compensation for its services at a commission rate of 3.0% of the gross sales price per ordinary share sold. On March 7, 2025, we filed a prospectus supplement with the SEC with respect to the offer and sale of up to $5,488,800 of our ordinary shares pursuant to the ATM Agreement. The aggregate market value of shares eligible for sale under the prospectus supplement and under the ATM Agreement will be subject to the limitations of General Instruction I.B.6 of Form S-3, to the extent required under such instruction. We are not obligated to make any sales under the ATM Agreement and may suspend or terminate the program at any time, at our discretion.
During the three months ended June 30, 2025, we sold 964,118 of our ordinary shares under the ATM Agreement at an average price of $1.30 per share, for total gross proceeds of approximately $1.3 million. We paid aggregate fees and commissions of $0.1 million to HCW and incurred other expenses of approximately $0.2 million, resulting in net proceeds of approximately $1.0 million.
As of June 30, 2025, approximately $4.2 million remained available for future issuance under the ATM Agreement.
On June 25, 2025, we entered into a securities purchase agreement with certain institutional investors for the issuance and sale of 4,000,000 ordinary shares and ordinary warrants to purchase up to an aggregate of 4,000,000 ordinary shares at an exercise price of $0.65 per share. Each ordinary share was sold at a combined offering price of $0.65 together with an ordinary warrant to purchase one ordinary share. The offering of the ordinary shares and the ordinary shares that are issuable from time to time upon exercise of the warrants was made pursuant to our registration statement on Form S-1, as amended, which was confidentially submitted to the SEC on May 27, 2025 and initially publicly filed with the SEC on June 20, 2025, and declared effective by the SEC on June 25, 2025. The ordinary warrants are exercisable at any time and from time to time, in whole or in part, following the date of issuance and ending five years from the date of issuance. The offering closed on June 26, 2025. Additionally, we issued warrants to purchase up to 240,000 ordinary shares, with an exercise price of $0.8125 per share, exercisable at any time and from time to time, in whole or in part, following the date of issuance and ending five years from the date of issuance, to certain representatives of HCW as compensation for its role as the placement agent in the June 2025 public offering.
The warrants issued in January 2025 private placement and the June 2025 public offering are considered freestanding instruments. As the warrants are indexed to our ordinary shares and are considered equity-classified, they are recorded in shareholders’ equity on the unaudited condensed consolidated balance.
8
Cash Flows for the Six Months Ended June 30, 2025 and 2024 (in thousands):
|
|
Six Months Ended
June 30, |
|||||||
|
|
2025
|
2024
|
||||||
|
Net cash used in operating activities
|
$
|
(9,429
|
)
|
$
|
(13,290
|
)
|
||
|
Net cash used in investing activities
|
(5
|
)
|
—
|
|||||
|
Net cash provided by financing activities
|
7,779
|
—
|
||||||
|
Effect of Exchange rate changes on Cash, Cash Equivalents and Restricted Cash
|
70
|
(15
|
)
|
|||||
|
Net cash flow
|
$
|
(1,585
|
)
|
$
|
(13,305
|
)
|
||
Net Cash used in Operating Activities
Net cash used in operating activities decreased by $3.9 million, or 29.1%, due to cash receipts from customers, improved working capital management and reduced operating expenses.
Net Cash used in Investing Activities
Cash used in investing activity increased by $5 thousand, primarily due to fixed assets acquisitions.
Net Cash provided by Financing Activities
Net cash provided by financing activities increased by $7.8 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, primarily due to the proceeds received through our January 2025 offering, ATM program and our June 2025 offering.
Obligations and Contractual Commitments
Set forth below is a summary of our contractual obligations as of June 30, 2025.
|
|
Payments due by period (in thousands)
|
|||||||||||
|
Contractual obligations
|
Total
|
Less than
1 year |
1-3 years
|
|||||||||
|
|
||||||||||||
|
Purchase obligations (1)
|
$
|
7,384
|
$
|
7,384
|
$
|
—
|
||||||
|
Operating lease obligations (2)
|
405
|
309
|
96
|
|||||||||
|
Total
|
$
|
7,789
|
$
|
7,693
|
$
|
96 | ||||||
|
(1)
|
We depend on one contract manufacturer, Sanmina Corporation, for both the SCI products and the ReStore Products. We place our manufacturing orders with Sanmina pursuant to purchase orders or by providing forecasts for future requirements. In June 2025, the Company terminated its manufacturing agreement with Sanmina Corporation. The AlterG Anti-Gravity systems are produced by the contract manufacturer, Cirtronics Corporation, following the closure of our manufacturing facility in Fremont, California in December 2024. Purchase orders are executed with suppliers based on our sales forecast.
|
|
(2)
|
Our operating leases consist of leases for our facilities in the United States and Israel and motor vehicles.
|
We calculated the payments due under our operating lease obligation for our Israeli office that are to be paid in NIS at a rate of exchange of NIS 3.372: $1.00, and the payments due under our operating lease obligation for our German subsidiary that are to be paid in euros at a rate of exchange of €1.00: $1.173, both of which were the applicable exchange rates as of June 30, 2025.
9
Off-Balance Sheet Arrangements
We had no off-balance sheet arrangements or guarantees of third-party obligations as of June 30, 2025.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes to our market risk during the second quarter of 2025. For a discussion of our exposure to market risk, please see Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of our 2024 Form 10-K.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required financial disclosure.
As of the end of the period covered by this quarterly report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon, and as of the date of, this evaluation, the Chief Executive Officer and the Principal Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2025, such that the information required to be disclosed by us in our SEC reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to our management, including our Chief Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
During the quarter ended June 30, 2025 there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.
10
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There have been no material changes to our legal proceedings as described in “Part I, Item 3. Legal Proceedings” of our 2024 Form 10-K, except as described in Note 7 in our unaudited condensed consolidated financial statements included in “Part I, Item 1” of this quarterly report.
ITEM 1A. RISK FACTORS
Except as set forth below, and as disclosed in our Quarterly Report on Form 10-Q for the period ended March 31, 2025, there have been no material changes to our risk factors from those disclosed in “Part I, Item 1A. Risk Factors” of our 2024 Form 10-K:
Risks Related to Our Business and Our Industry
We do not satisfy all listing requirements for the Nasdaq Capital Market. We can provide no assurance that we will be able to comply with the continued listing requirements over time and that our common stock will continue to be listed on the Nasdaq Capital Market.
As previously disclosed, on August 5, 2025, we received a notification letter (the “Bid Price Letter”) from The Nasdaq Stock Market LLC (“Nasdaq”) indicating that we did not satisfy the requirement for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(a) (“Rule 5550(a)”) to maintain a minimum bid price of $1 per share. We became deficient with Rule 5550(a) as of August 4, 2025 as our closing bid price was less than $1 per share for 30 consecutive business days. As in the past, the Bid Price Letter is a notice of deficiency, not delisting, and does not currently affect the listing or trading of our ordinary shares on The Nasdaq Capital Market. We have 180 calendar days, or until February 2, 2026, to regain compliance with Rule 5550(a)(2). If at any time before February 2, 2026, the bid price of our ordinary shares closes at $1.00 per share or more for a minimum of 10 consecutive business days, Nasdaq will provide written confirmation that we have regained compliance. Additionally, we may be eligible for a second 180-day period to satisfy Rule 5550(a)’s minimum bid price requirement, if, as of February 2, 2026, we continue to have a market value of publicly held shares of at least $1 million, meet all other initial listing standards of the Nasdaq Capital Market (with the exception of the bid price requirement) and provide written notice of our intention to cure the deficiency during such second compliance period. We intend to monitor closely the closing bid price of our ordinary shares and to consider plans for regaining compliance with Rule 5550(a). While we plan to review all available options, there can be no assurance that we will be able to regain compliance with the applicable rules during the 180-day compliance period, any subsequent extension period, or at all.
If we do not regain compliance with Rule 5550(a) during the applicable cure period, Nasdaq will notify us that our ordinary shares are subject to delisting. We would then be permitted to appeal any delisting determination to a Nasdaq Hearings Panel, and our ordinary shares would remain listed on the Nasdaq Capital Market pending the panel’s decision after the hearing. If we do not appeal the delisting determination or do not succeed in such an appeal, our ordinary shares would be removed from trading on the Nasdaq Capital Market. Any delisting determination could seriously decrease or eliminate the value of an investment in our ordinary shares and other securities linked to our ordinary shares. While an alternative listing on an over-the-counter exchange could maintain some degree of a market in our ordinary shares, we could face substantial material adverse consequences, including, but not limited to, the following: limited availability for market quotations for our ordinary shares; reduced liquidity with respect to our ordinary shares; a determination that our ordinary shares are “penny stock” under SEC rules, subjecting brokers trading our ordinary shares to more stringent rules on disclosure and the class of investors to which the broker may sell the ordinary shares; limited news and analyst coverage, in part due to the “penny stock” rules; decreased ability to issue additional securities or obtain additional financing in the future; and potential breaches under or terminations of our agreements with current or prospective large shareholders, strategic investors and banks. The perception among investors that we are at heightened risk of delisting could also negatively affect the market price of our securities and trading volume of our ordinary shares. In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the Nasdaq minimum bid price requirement, or prevent future non-compliance with Nasdaq’s listing requirements.
We may encounter difficulties in transitioning the manufacturing of our ReWalk products to our in-house manufacturer.
In the second quarter of 2025, we transitioned the manufacturing of our ReWalk products to our in-house manufacturer in an effort to reduce costs and provide us with more control over product quality. As a result, we terminated our agreement with Sanmina Corporation, an international contract manufacturer that manufactured our ReWalk products at its facility in Israel since 2013 and sourced the components and raw materials necessary for manufacturing.
However, to fully establish our manufacturing operations, we will need to identify, recruit and build experienced teams, and there are can be no assurance that we will be successful in doing so. Additionally, Sanima previously contracted directly with third-party suppliers to supply certain components of our products. We cannot guarantee that we will be able to establish similar agreements to source sufficient quantities or obtain components at commercially reasonable costs.
If we are unable to manufacture products that consistently meet specifications, are produced in necessary quantities, comply with regulatory requirements and quality control standards and are delivered at commercially acceptable costs and on a timely basis, it will have a material adverse effect on our business, financial condition and results of operations. The process of moving our manufacturing operations in house is time consuming, costly and may disrupt our operations. There can be no assurance that we will fully realize the anticipated benefits from such transition.
11
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION
Rule 10b5-1 Trading Arrangements
During the quarter ended June 30, 2025, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted terminated
12
ITEM 6. EXHIBIT INDEX
|
Exhibit
Number
|
|
Description
|
| 10.3#** | ||
|
101.INS
|
XBRL Instance Document
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
104
|
Cover Page Interactive Data File – formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.
|
__________________________
|
*
|
Furnished herewith.
|
|
**
|
Filed herewith
|
| # |
Indicates a management contract or any compensatory plan, contract or arrangement.
|
13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
Lifeward Ltd.
|
|
|
|
|
|
|
Date: August 14, 2025
|
By:
|
/s/ William Mark Grant
|
|
|
|
William Mark Grant
|
|
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
|
|
Date: August 14, 2025
|
By:
|
/s/ Almog Adar
|
|
|
|
Almog Adar
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
14