Lifeward Ltd.
03/18/2026 | Press release | Distributed by Public on 03/18/2026 09:44
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with our audited consolidated financial statements and the related notes included elsewhere in this annual report. This discussion contains forward-looking statements that are based on our management's current expectations, estimates and projections for our business, which are subject to a number of risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under "Special Note Regarding Forward-Looking Statements" and "Part I. Item 1A. Risk Factors."
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, were collected to demonstrate the safety and efficacy of this feature and support the FDA submission. In March 2025, we received 510(k) clearance from the U.S. Food and Drug Administration ("FDA") for the ReWalk 7 Personal Exoskeleton device, a next-generation ReWalk model.
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. The ReStore is a powered, lightweight soft exo-suit intended for use during the rehabilitation of individuals with lower limb disabilities due to stroke. Sales of the device in the European Union ceased in May 2024. 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. We continue to distribute these products; however, our distribution rights are no longer exclusive.
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. The purchase agreement also provided for the potential of additional cash earnout payments based on AlterG's revenue growth over the two years following the closing; however, no earnout payments were earned. 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 6,000 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 injury and disability.
In February 2026, we entered into an Intellectual Property Assignment and Technology Transfer Agreement with Skelable Ltd., an Israeli technology company, pursuant to which we agreed to acquire certain intellectual property and related technology assets associated with a powered upper-body robotic orthotic system designed to assist individuals with impaired upper-limb function, including stroke survivors. The transaction remains subject to customary closing conditions. As part of the transaction, certain key employees of Skelable are expected to join our company. The consideration consists primarily of our ordinary shares and is subject to the achievement of certain milestones. The technology remains under development and is intended to expand our neurorehabilitation platform beyond lower-limb exoskeleton systems.
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.
In December 2025, we announced a distribution agreement with Verita Neuro, a provider of intensive neurological rehabilitation services. Pursuant to the agreement, Verita Neuro will serve as a distributor of the ReWalk Personal Exoskeleton in certain international markets, including Mexico, Thailand and the United Arab Emirates. Through its network of rehabilitation centers, Verita Neuro integrates advanced technologies and therapies to support individuals with neurological injuries. We believe this agreement will expand access to the ReWalk Personal Exoskeleton in additional international markets and support broader adoption of our technology.
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 consumers, we have established relationships with clinics and rehabilitation centers, professional and college sports teams, individuals and organizations in the SCI community, and in markets where we do not sell direct to consumers, our distributors maintain these relationships. We have primary offices in Yokneam, Israel, Hudson, Massachusetts, and Berlin, Germany.
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, 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 engaged with CMS regarding the Medicare coverage framework applicable to personal exoskeletons. In 2024, 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 that is at least five years post-injury, 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 through the notice and comment rulemaking process. The Final Rule includes a policy confirming that personal exoskeletons are included in the Medicare brace benefit category, as of January 1, 2024. Medicare personal exoskeleton claims with dates of service on or after January 1, 2024 that are billed using HCPCS code K1007 are assigned to the brace benefit category. CMS reimburses items classified under the brace benefit category using a lump-sum payment methodology.
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. CMS determined this payment rate using a "gap-filling" methodology, which is applied when a technology has no prior fee schedule pricing history. In establishing the payment amount for HCPCS code K1007, CMS considered available pricing information for exoskeleton devices from Lifeward and other manufacturers.
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.
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.
On January 12, 2026, we entered into a Share Purchase Agreement with Oramed Pharmaceuticals, Inc. ("Oramed") and Oratech Pharma, Inc. ("Oratech"), pursuant to which we agreed to acquire all of the outstanding equity interests of Oratech, a wholly owned subsidiary of Oramed. Upon closing of the transaction, and subject to the satisfaction of customary closing conditions, we will issue to Oramed ordinary shares and pre-funded warrants representing up to 49.99% of our fully diluted equity capitalization, with the number of ordinary shares issued at closing not exceeding 45% of our outstanding ordinary shares immediately after closing. We will also issue transaction warrants and agreed to make quarterly revenue sharing payments equal to 4% of net revenues from sales of our ReWalk Personal Exoskeleton products and related extended warranties, subject to certain caps and termination events.
In connection with the transaction, we also entered into a Securities Purchase Agreement with Oramed and certain investors providing for the issuance of up to $20.0 million of senior secured convertible notes, including $10.0 million to be issued at closing, together with accompanying warrants.
On March 12, 2026, our shareholders approved the transaction. We anticipate closing the transaction following the satisfaction of customary closing conditions.
In connection with the anticipated transaction, we received bridge financing from Oramed. On November 14, 2025, we entered into a Secured Promissory Note (the "Initial Secured Promissory Note") with Oramed Ltd., pursuant to which we issued to Oramed Ltd. a secured promissory note in the principal amount of $3.0 million. The loan bears interest at a rate of 15% per annum, is secured by a lien on our cash and matures on May 14, 2026.
On February 12, 2026, we entered into an additional Secured Promissory Note (the "Subsequent Secured Promissory Note") with Oramed, pursuant to which we issued a secured promissory note in the initial principal amount of $525,000, which amount may be increased by up to an additional $975,000 upon the mutual consent of the parties. The Subsequent Secured Promissory Note is secured by a lien on our cash, accrues interest at a rate of 24% per annum and matures on the earlier of August 12, 2026, or the failure to obtain shareholder approval of the transactions contemplated by the Securities Purchase Agreement and the Share Purchase Agreement described above.
On March 11, 2026, we and Oramed agreed to increase the principal amount available under the Subsequent Secured Promissory Note by an additional $500,000, resulting in an aggregate principal amount of $1,025,000 available under such note.
Components of Our Statements of Operations
Revenue
We currently rely, and in the future will rely, on sales of our ReWalk Personal Exoskeletons, AlterG Anti-Gravity systems, MyoCycle FES cycles, and related consumables, services, and extended warranties for our revenue. Our revenue is derived from a combination of third-party payors, including private and government employers, institutions, and self-payors. Payments for our products by third party payors have been made primarily through case-by-case determinations. Third-party payors include, without limitation, private insurance plans, workers' compensation programs, managed care organizations, and government programs including the VHA and Medicare. We expect that third-party payors will be an increasingly important source of revenue in the future as we increase the volume of sales of ReWalk Personal systems to Medicare-eligible beneficiaries following establishment of a benefit category and pricing.
ReWalk Personal and ReWalk Rehabilitation Exoskeleton systems are generally covered by a five-year warranty from the date of purchase, which is included in the purchase price. ReWalk systems sold to Medicare beneficiaries carry a two-year warranty, consistent with the coverage decision by CMS. The warranty covers all elements of the systems (except the batteries, which carry a one-year warranty), other than repairs for normal wear and tear. The AlterG Anti-Gravity systems are sold with a one-year factory warranty covering parts and services in the U.S. and a two-year factory warranty covering parts only in the rest of the world. The ReStore device is sold with a two-year warranty.
Cost of Revenue and Gross Profit
For ReWalk, which we began manufacturing at our facility in Yokneam, Israel in April 2025, cost of revenue consists primarily of raw materials, direct labor, including wages and related benefits for employees directly engaged in the manufacturing process, as well as indirect labor and other factory overhead costs such as rent and utilities. In addition, cost of revenue also includes field service costs, shipping expenses and reserves for warranty and inventory condition.
Starting in January 2025, the Company signed a contract with Cirtronics Corporation to manufacture and assemble our AlterG products. For these products, cost of revenue also includes internal costs such as salaries and related personnel costs including non-cash share-based compensation, functions that support manufacturing and inventory management, training and inspection, service activities, freight costs, and reserves for warranty and inventory condition.
For our AlterG systems, which we manufactured at our facility in Fremont, California until December 31, 2024, cost of revenue consists primarily of raw materials, direct labor, indirect labor, and other factory overhead costs such as rent and utilities. In addition, cost of revenue also includes field service costs, shipping expenses, and reserves for warranty and inventory condition.
For the MyoCycle product line, which we distribute, cost of revenue consists primarily of complete systems purchased from the manufacturers. In addition, the cost of revenue also includes field service costs and shipping expenses.
Our gross profit and gross margin (defined as gross profit as a percentage of revenue) are influenced by a number of factors, including the volume and price of our products sold, fluctuations in the mix of products sold, and variability in our cost of revenue. We expect that gross profit and gross margin will expand in the future as we increase our revenue volumes and realize operating efficiencies associated with greater scale which will reduce the cost of revenue as a percentage of revenue.
Operating Expenses
Research and Development Expenses, Net
Research and development expenses, net consist primarily of salaries and related personnel costs including share-based compensation, supplies, materials, and consulting expenses associated with product design and development, clinical studies, regulatory submissions, patent costs, sponsored research and other related activities. We expense all research and development expenses as they are incurred.
Research and development expenses are presented net of the amount of any grants we receive for research and development in the period in which we receive the grant. We previously received grants and other funding from the IIA. Certain of those grants require us to pay royalties on sales of certain systems, which are recorded as cost of revenue. We may receive additional funding from these entities or others in the future. See "Grants and Other Funding" below.
Sales and Marketing Expenses
Our sales and marketing expenses consist primarily of salaries and related personnel costs including share-based compensation for sales, sales support, marketing, and reimbursement and market access activities, travel, marketing, advertising, tradeshows and conferences, lobbying, and public relations activities.
General and Administrative Expenses
Our general and administrative expenses consist primarily of salaries and related personnel costs including share-based compensation for our administrative, finance, and general management personnel, professional services, and insurance.
Financial (Expeses) Income, Net
Financial income and expenses consist primarily of bank commissions, foreign exchange gains and losses, interest income earned on investments in short-term deposits, interest expense on our outstanding borrowings, and changes in the fair value of derivative liabilities associated with our loan arrangements.
Interest income consists of interest earned on our cash and cash equivalent balances. Interest expense consists primarily of interest accrued on our outstanding borrowings and certain other costs associated with such indebtedness. Changes in the fair value of derivative liabilities reflect the periodic remeasurement of derivatives embedded in or associated with our loan agreements. Foreign currency exchange changes reflect gains or losses related to transactions denominated in currencies other than the U.S. dollar.
Taxes on Income
As of December 31, 2025, we had not yet generated taxable income in Israel. As of that date, our net operating loss carryforwards for Israeli tax purposes amounted to approximately $279.9 million.
As of December 31, 2024, the Company had approximately $49.5 million of U.S. federal net operating loss ("NOL") carryforwards and $35.3 million of state NOL carryforwards. Federal NOLs generated prior to January 1, 2018 will begin to expire in 2027, while federal NOLs generated in tax years beginning after January 1, 2018 may be carried forward indefinitely. State NOLs will begin to expire in 2028, subject to applicable state tax laws.
Our taxable income generated outside of Israel will be subject to the applicable corporate tax rates in those jurisdictions. Accordingly, our effective tax rate will depend on the geographic distribution of our taxable income.
Grants and Other Funding
Israel Innovation Authority (formerly known as the Office of the Chief Scientist)
From our inception through December 31, 2025, we have received approximately $2.8 million in funding from the IIA, $1.6 million of which are royalty-bearing grants, $400 thousand were received in consideration for an investment in our preferred shares while $806 thousand was received without future obligation. Of the royalty-bearing grants received, we have paid royalties to the IIA in the total amount of $117 thousand. The agreements with IIA require us to pay royalties at a rate of 3% on sales of certain systems and related services up to the total amount of funding received for the development of these systems, linked to the dollar, and bearing interest at an annual rate of SOFRPR applicable to dollar deposits. If we transfer IIA-supported technology or know-how outside of Israel, we will be liable for additional payments to IIA depending upon the value of the transferred technology or know-how, the amount of IIA support, the time of completion of the IIA-supported research project and other factors.
As of December 31, 2025, the aggregate contingent liability to the IIA was $1.6 million. For more information, see "Part I, Item 1A. Risk Factors-We have received Israeli government grants for certain of our research and development activities and we may receive additional grants in the future. The terms of those grants restrict our ability to manufacture products or transfer technologies outside of Israel and we may be required to pay penalties in such cases or upon the sale of our company."
Results of Operations
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
Revenue
Our revenue for 2025 and 2024 were as follows (dollars in thousands, except unit amounts):
|
Years Ended December 31,
|
||||||||
|
2025
|
2024
|
|||||||
|
Revenue
|
$
|
22,034
|
$
|
25,663
|
||||
Revenue consists primarily of transactions for our portfolio of ReWalk, AlterG, ReStore and MyoCycle systems.
Revenue was $22.0 million, a decrease of $3.6 million, or 14%, during 2025 as compared to 2024. Of this decrease, $3.0 million was attributable to reduced AlterG sales, primarily reflecting lower international demand and fewer system shipments compared to 2024. The remaining $0.6 million decline was mainly due to decreased revenue from MyoCycle.
In the future, we expect our growth to be primarily driven by sales of our ReWalk Personal device through expansion of coverage and reimbursement by commercial, government third-party payors and through channel partnerships. We also expect increased shipments of our AlterG Anti-Gravity systems over time as we continue to expand our penetration of rehabilitation clinics in the U.S. and internationally.
Gross Profit
Our gross profit for 2025 and 2024 were as follows (in thousands):
|
Years Ended December 31,
|
||||||||
|
2025
|
2024
|
|||||||
|
Gross profit
|
$
|
8,428
|
$
|
8,216
|
||||
Gross profit was $8.4 million, or 38% of revenue, for 2025, as compared to a gross profit of $8.2 million, or 32% of revenue, for 2024. The increase in gross margin was primarily attributable to the absence in 2025 of approximately $1.5 million of amortization expenses and $1.2 million of restructuring expenses recognized in 2024. Excluding these items, gross profit decreased year over year, primarily due to lower sales and inventory write-downs related to the termination of our manufacturing agreement with Sanmina and obsolete ReStore inventory.
We expect gross profit and gross margin to improve over time as revenue volumes increase and we realize operating efficiencies associated with greater scale. Gross margin is also expected to improve as a result of the transition of AlterG system production from our Fremont, California facility, where operations were discontinued as of December 31, 2024, to a contract manufacturer. In addition, during April 2025 we transitioned the production of ReWalk to in-house manufacturing, which we expect will further support gross margin improvement over time through better utilization of our manufacturing capacity and enhanced control over production costs. These expected improvements are not expected to be impacted by the inventory write-downs recorded in 2025, which we believe were largely non-recurring in nature.
Research and Development Expense, Net
Our research and development expense, net for 2025 and 2024 was as follows (in thousands):
|
Years Ended December 31,
|
||||||||
|
2025
|
2024
|
|||||||
|
Research and development expense, net
|
$
|
3,249
|
$
|
4,625
|
||||
Research and development expense was $3.2 million in 2025, a decrease of $1.4 million, or 30%, as compared to 2024. The decrease is primarily attributable to lower costs associated with the development projects for the ReWalk 7 and NEO products, which were substantially completed.
Following the FDA clearance of the ReWalk 7 next-generation exoskeleton model in 2025, we expect to focus our research and development efforts primarily on product improvements and ongoing enhancements to our current products. We also continue development initiatives aimed at reducing material costs for our ReWalk and AlterG product lines. In addition, we expect to invest in the development and integration of technologies acquired as part of the Skelable transaction.
Sales and Marketing Expense
Our sales and marketing expense for 2025 and 2024 was as follows (in thousands):
|
Years Ended December 31,
|
||||||||
|
2025
|
2024
|
|||||||
|
Sales and marketing expense
|
$
|
13,875
|
$
|
17,949
|
||||
Sales and marketing expense was $13.9 million in 2025, a decrease of $4.1 million, or 23%, as compared to 2024. Of this decrease, approximately $1.5 million was attributable to amortization expense recognized in 2024 that did not recur in 2025. The remaining $2.6 million decrease was primarily driven by lower reimbursement, trade show, and marketing consultant expenses, as well as reductions in headcount, sales commissions, and travel-related costs.
In the near term, our sales and marketing expenses are expected to be driven by our efforts to facilitate growth in sales of our commercial product lines, expand reimbursement coverage for our ReWalk Personal Exoskeleton device, support training activities of ReWalk customers, promote sales through channel partners, and increase adoption of our AlterG Anti-Gravity systems through greater penetration of rehabilitation clinics and hospitals and expansion of our distributor network internationally.
General and Administrative Expense
Our general and administrative expense for 2025 and 2024 was as follows (in thousands):
|
Years Ended December 31,
|
||||||||
|
2025
|
2024
|
|||||||
|
General and administrative
|
$
|
8,195
|
$
|
5,195
|
||||
General and administrative expense was $8.2 million, an increase of $3.0 million, or 58%, as compared to 2024. Both periods included incomes related to the earnout liability; however, the net income recognized in 2025 was approximately $2.0 million lower than the income recognized in 2024. Excluding this item, the increase was primarily attributable to restructuring expenses associated with the departure of the Company's former Chief Executive Officer and transaction-related costs incurred in connection with the Oramed transaction.
Impairment charges
|
Years Ended December 31,
|
||||||||
|
2025
|
2024
|
|||||||
|
Impairment charges
|
$
|
2,783
|
$
|
9,794
|
||||
During the year ended December 31, 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 non-cash impairment charge does not affect our liquidity, cash flows, or ongoing operations. By comparison, in 2024 we recognized an impairment charge of $9.8 million, primarily related to certain acquired intangible assets, due to lower-than-expected financial performance.
Financial (expense) income, net
Our financial income, net for 2025 and 2024 was as follows (in thousands):
|
Years Ended December 31,
|
||||||||
|
2025
|
2024
|
|||||||
|
Financial (expenses) income, net
|
$
|
(295
|
)
|
$
|
448
|
|||
Financial (expenses) income, net, reflects a decrease in financial income of $0.7 million during 2025 as compared to 2024. The decrease was mainly attributable to interest expense recognized on the Oramed short-term loan in 2025, lower yields on a reduced cash balance reflecting fewer funds on deposit, and unfavorable foreign currency exchange rate fluctuations.
Income Tax
Our Income tax expense (benefit) for 2025 and 2024 was as follows (in thousands):
|
Years Ended December 31,
|
||||||||
|
2025
|
2024
|
|||||||
|
Taxes on income (benefit)
|
$
|
(55
|
)
|
$
|
43
|
|||
Income tax changed by $98 thousand during 2025 as compared to 2024, primarily due to lower current tax expenses in certain foreign jurisdictions.
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023
A discussion of changes in our results of operations in 2024 compared to 2023 has been omitted from this annual report on Form 10-K but may be found in "Part I. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on March 7, 2025, which is available free of charge on the SEC's website at www.sec.gov and at golifeward.com, and is incorporated by reference herein.
Critical Accounting Policies
Our consolidated financial statements are prepared in accordance with United States generally accepted accounting principles. The preparation of our financial statements requires us to make estimates, judgments and assumptions that can affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue 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. Actual results could differ materially from those estimates as circumstances change and additional information becomes known. In addition to the estimates identified above that are considered critical, we make many other accounting estimates in preparing our financial statements and related disclosures. See Note 2 to our consolidated financial statements presented elsewhere in this annual report for a description of the significant accounting policies that we used to prepare our consolidated financial statements. The critical accounting policies affected by the estimates, judgments and assumptions used in the preparation of our consolidated financial statements are discussed below.
Revenue Recognition
Our revenue is recognized in accordance with ASC Topic 606 when obligations under the terms of a contract with our customer are satisfied; generally, this occurs with the transfer of control of our products or services. Revenue is measured as the amount of consideration to which we expect to be entitled in exchange for transferring products or providing services. To achieve this core principle, we apply the following five steps:
1. identify the contract with a customer;
2. identify the performance obligations in the contract;
3. determine the transaction price;
4. allocate the transaction price to performance obligations in the contract; and
5. recognize revenue when or as we satisfy a performance obligation.
Provisions are made at the time of revenue recognition for any applicable warranty cost expected to be incurred. The timing for revenue recognition among the various products and customers is dependent upon satisfaction of such criteria and generally varies from either shipment or delivery to the customer depending on the specific shipping terms of a given transaction, as stipulated in the agreement with each customer. Other than pricing terms which may differ due to the different volumes of purchases between distributors and end-users, there are no material differences in the terms and arrangements involving direct and indirect customers. Our products sold through agreements with distributors are non-exchangeable, non-refundable, non-returnable and without any rights of price protection or stock rotation. Accordingly, we consider all the distributors as end-users. We generally do not grant a right of return for our products except in rare circumstances, and in those cases we record reductions to revenue for expected future product returns based on our historical experience and estimates.
For the majority of sales of ReWalk Rehabilitation Exoskeleton systems, we include insignificant training and consider the elements in the arrangement to be a single performance obligation. Therefore, the Company recognizes revenue for the system only when control is transferred after delivery and when the training has been completed, in accordance with the agreement terms with the customer, once all other revenue recognition criteria have been met. For sales of ReWalk Personal Exoskeleton systems to end users, and for sales of ReWalk Personal Exoskeleton or ReWalk Rehabilitation Exoskeleton systems to third party distributors, we do not provide training to the end user as this training is completed by the rehabilitation centers or by the distributor that have previously completed the ReWalk Training program.
Warranties are classified as either assurance type or service type warranty. A warranty is considered an assurance type warranty if it provides the consumer with assurance that the product will function as intended for a limited period of time.
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.
For contracts with Medicare, the Company determines the amount of variable consideration that should be included at the transaction price, using contractual agreements and historical reimbursement experience with Medicare. The Company applies constraint to the transaction price, such that revenue is recorded only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in the future. If actual amounts of consideration ultimately received differ from the Company's estimates, the Company adjusts these estimates, which would affect revenue in the period such adjustments become known.
A portion of the Company's sales of products to customers are made through lease arrangements which typically include AlterG Anti-Gravity systems.
Revenue for the lease of AlterG Anti-Gravity systems is accounted for under ASC Topic 842, Leases. AlterG Anti-Gravity systems being utilized under service agreements, accounted for in accordance with ASC 842 as an operating lease. Revenues are recognized ratably over the lease term.
The Company provides product assurance warranties for periods of 1- 10 years (usually 2 years) that cover the compliance of the products with agreed-upon specifications. A provision is recorded for estimated warranty costs based on the Company's experience.
In certain contracts, the Company also provides a service-type warranty. Service-type warranty is accounted for as a separate performance obligation, and revenue is recognized ratably over the service period as the customer consumes the benefit over the service term.
Goodwill Impairment
Goodwill represents the excess of the purchase price over the fair value of the identifiable net assets acquired in a business combination. Goodwill is not amortized but is tested for impairment at least annually, or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable.
We perform our annual goodwill impairment test during the fourth quarter of each fiscal year, or more frequently if impairment indicators arise. Such indicators may include, among others, a sustained decline in our market capitalization, significant adverse changes in economic or industry conditions, changes in the manner in which a reporting unit is utilized, or other factors that may affect the fair value of the reporting unit.
The goodwill impairment test is performed at the reporting unit level. We may first perform a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If, based on the qualitative assessment, we determine that it is more likely than not that the fair value of the reporting unit is less than its carrying value, or if we elect to bypass the qualitative assessment, we perform a quantitative impairment test. In the quantitative test, we compare the fair value of the reporting unit with its carrying amount, including goodwill. If the carrying amount exceeds the reporting unit's fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to the reporting unit.
Determining the fair value of a reporting unit requires management to make certain estimates and assumptions, including assumptions related to the Company's market capitalization and the appropriate control premium applied in the market approach valuation. These estimates involve judgment and are based on publicly available market data, including control premium studies for comparable public company transactions. These estimates are inherently uncertain and may differ from actual market conditions. Changes in the Company's market capitalization, control premium assumptions, or overall market conditions could result in impairment charges in future periods.
During the second quarter of 2025, we recorded a goodwill impairment charge following the identification of impairment indicators and the completion of a quantitative impairment analysis. Our annual impairment test performed in the fourth quarter of 2025 did not result in any additional impairment.
Inventory Valuation
Inventories are stated at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The carrying value of our inventory is reduced for excess or obsolete inventory based on assumptions about future demand and market conditions. If actual future demand or market conditions are less favorable than those projected by management, additional inventory write-downs may be required, which could have a material adverse effect on our results of operations.
Valuation of Derivative Liability
Our derivative liabilities are recorded at fair value based on observable and unobservable inputs. For the derivative liability related to the promissory note with Oramed, these inputs include our stock price, the expected volatility of our stock price, the remaining term of the loan, and assumptions regarding the probability of an equity financing that would result in an adjustment to the conversion price of the convertible loan.
The derivative liability associated with the compound derivative feature in the term loan with Oramed is based on similar assumptions, including the credit spread and the remaining term of the debt.
Recently Issued and Adopted Accounting Pronouncements
A discussion of recent accounting pronouncements is included in Note 2z, New Accounting Pronouncements, to our consolidated financial statements included elsewhere in this annual report.
Liquidity and Capital Resources
Sources of Liquidity and Outlook
Since inception, we have funded our operations primarily through the sale of our equity securities and convertible notes to investors in private placements, the sale of our equity securities in public offerings, cash exercises of outstanding warrants, the incurrence of bank debt and loans (including the [Loan] from Oramed.
As of December 31, 2025, we had cash and cash equivalents of $2.2 million. We had an accumulated deficit in the total amount of $284.7 million as of December 31, 2025 and further losses are anticipated in the development of its business. Those factors raise substantial doubt about the Company's ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.
We intend to finance operating costs over the next twelve months with existing cash on hand, potential reduction in operating cash burn and 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 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. The consolidated financial statements for the year ended December 31, 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 the Company's 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 the development and commercialization of the upper-body exoskeleton technology acquired from Skelable for potential personal health and rehabilitation applications across multiple indications; (iii) routine product updates; (iv) potential acquisitions of businesses 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. If our current estimates of revenue, expenses or capital or liquidity requirements change or are inaccurate, 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."
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 this Annual Report , 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 this Annual Report. We will continue to be subject to these limitations until such time as our public float reaches at least $75 million. When we file our next annual report for the year ended December 31, 2026, we will also be required to re-test our status under these rules. 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 outstanding 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 January 2026 (the "2026 Shelf Registration Statement").
Equity Offerings and Warrant Exercises
On January 7, 2025, we entered into a purchase agreement with certain institutional investors for the issuance and sale of 151,515 ordinary shares and ordinary warrants to purchase up to an aggregate of 151,514 ordinary shares at an exercise price of $33 per share. Each ordinary share was sold at an offering price of $33. The offering of the ordinary shares and the ordinary shares that are issuable from time to time upon exercise of the pre-funded warrants was made pursuant to our 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, we issued warrants to purchase up to 9,088 ordinary shares, with an exercise price of $41.25 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 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 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 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 twelve months ended December 31, 2025, the Company sold 114,008 and 289,903 ordinary shares, respectively, under the ATM program at an average price of $7.62 and $9.67 per share, respectively, for total gross proceeds of approximately $0.9 million and $2.8 million. The Company 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 $2.5 million. The Company's ATM program expired on November 16, 2025.
On June 25, 2025, the Company entered into a securities purchase agreement with certain institutional investors for the issuance and sale of 333,333 ordinary shares and warrants to purchase up to an aggregate of 333,328 ordinary shares at an exercise price of $7.8 per share. Each ordinary share was sold at a combined offering price of $7.8 together with a warrant to purchase one ordinary share. The offering of the ordinary shares and the ordinary shares issuable upon exercise of the warrants was made pursuant to the Company's 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 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 20,000 ordinary shares, with an exercise price of $9.75 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 the 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 meet the criteria for equity classification, they are recorded in shareholders' equity on the Company's consolidated balance sheets.
Agreements with Oramed
On January 12, 2026, we entered into a Share Purchase Agreement with Oramed Pharmaceuticals, Inc. ("Oramed") and Oratech Pharma, Inc. ("Oratech"), pursuant to which we agreed to acquire all of the outstanding equity interests of Oratech, a wholly owned subsidiary of Oramed. Upon closing of the transaction, and subject to the satisfaction of customary closing conditions, we will issue to Oramed ordinary shares and pre-funded warrants representing up to 49.99% of our fully diluted equity capitalization, with the number of ordinary shares issued at closing not exceeding 45% of our outstanding ordinary shares immediately after closing. We will also issue transaction warrants and agreed to make quarterly revenue sharing payments equal to 4% of net revenues from sales of our ReWalk Personal Exoskeleton products and related extended warranties, subject to certain caps and termination events.
In connection with the transaction, we also entered into a Securities Purchase Agreement with Oramed and certain investors providing for the issuance of up to $20.0 million of senior secured convertible notes, including $10.0 million to be issued at closing, together with accompanying warrants.
On March 12, 2026, our shareholders approved the transaction. We anticipate closing the transaction following the satisfaction of customary closing conditions.
In connection with the anticipated transaction, we received bridge financing from Oramed. On November 14, 2025, we entered into a Secured Promissory Note (the "Initial Secured Promissory Note") with Oramed Ltd., pursuant to which we issued to Oramed Ltd. a secured promissory note in the principal amount of $3.0 million. The loan bears interest at a rate of 15% per annum, is secured by a lien on our cash and matures on May 14, 2026.
On February 12, 2026, we entered into an additional Secured Promissory Note (the "Subsequent Secured Promissory Note") with Oramed, pursuant to which we issued a secured promissory note in the initial principal amount of $525,000, which amount may be increased by up to an additional $975,000 upon the mutual consent of the parties. The Subsequent Secured Promissory Note is secured by a lien on our cash, accrues interest at a rate of 24% per annum and matures on the earlier of August 12, 2026 or the failure to obtain shareholder approval of the transactions contemplated by the Securities Purchase Agreement and the Share Purchase Agreement described above.
On March 11, 2026, we and Oramed agreed to increase the principal amount available under the Subsequent Secured Promissory Note by an additional $500,000, resulting in an aggregate principal amount of $1,025,000 available under such note.
Cash Flows
|
Years Ended December 31,
|
||||||||||||
|
2025
|
2024
|
2023
|
||||||||||
|
Net cash used in operating activities
|
$
|
(16,826
|
)
|
$
|
(21,718
|
)
|
$
|
(20,667
|
)
|
|||
|
Net cash used in investing activities
|
(16
|
)
|
-
|
(18,149
|
)
|
|||||||
|
Net cash provided by (used in) financing activities
|
12,203
|
-
|
(992
|
)
|
||||||||
|
Effect of Exchange rate changes on Cash, Cash Equivalents and Restricted Cash
|
110
|
34
|
45
|
|||||||||
|
Net cash flow
|
$
|
(4,529
|
)
|
$
|
(21,684
|
)
|
$
|
(39,763
|
)
|
|||
Year Ended December 31, 2025 to Year Ended December 31, 2024
Net Cash Used in Operating Activities
Net cash used in operating activities was $16.8 million in 2025, a decrease of $4.9 million as compared to 2024. The decrease was primarily attributable to improved working capital, including higher collections of trade receivables and a reduction in inventory levels reflecting inventory management and, to a lesser extent, inventory write-downs. These factors were partially offset by lower revenues relative to operating expenses.
Net Cash Used in Investing Activities
Net cash used in investing activities increased by $16 thousand in 2025 compared to 2024, primarily reflecting slightly higher purchases of property and equipment.
Net Cash Provided by Financing Activities
Net cash provided by financing activities was $12.2 million in 2025, primarily reflecting proceeds from registered direct offerings, issuances of ordinary shares under the Company's at-the-market program and public offering, as well as proceeds from the bridge loan from Oramed.
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023
A discussion of changes in our cash flows in 2024 compared to 2023 has been omitted from this annual report on Form 10-K but may be found in "Part I. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on March 7, 2025, which is available free of charge on the SECs website at www.sec.gov and at golifeward.com, and is incorporated by reference herein.
Obligations and Commercial Commitments
Set forth below is a summary of our contractual obligations as of December 31, 2025:
|
Payments due by period (in dollars, in thousands)
|
||||||||||||||||
|
Contractual obligations
|
Total
|
Less than
1 year |
1-3 years
|
3-5 years
|
||||||||||||
|
Purchase obligations (1)
|
$
|
6,036
|
$
|
6,036
|
$
|
-
|
$
|
-
|
||||||||
|
Operating lease obligations (2)
|
1,917
|
452
|
1,166
|
299
|
||||||||||||
|
Total
|
$
|
7,953
|
$
|
6,488
|
$
|
1,166
|
$
|
299
|
||||||||
|
(1)
|
Purchase obligations consist of non-cancelable purchase orders with suppliers for the manufacture of our ReWalk systems produced in-house and for AlterG Anti-Gravity systems manufactured by our contract manufacturer, Cirtronics Corporation. Purchase orders are placed with suppliers based on our sales forecasts and anticipated production requirements.
|
|
(2)
|
Our operating leases consist of leases for our facilities in the United States, Israel and Germany and motor vehicles in Israel.
|
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 3.19:$1.00, which was the applicable exchange rate as of December 31, 2025.
Off-Balance Sheet Arrangements
We had no off-balance sheet arrangements or guarantees of third-party obligations during the periods presented.
Trend Information
For information on significant known trends, please see "Part I-Item 1. Business - Overview" in this annual report.
Lifeward Ltd. published this content on March 18, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on March 18, 2026 at 15:45 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]