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What changed in Lifeward Ltd.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Lifeward Ltd.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+327 added−866 removedSource: 10-K (2024-02-27) vs 10-K (2023-02-23)

Top changes in Lifeward Ltd.'s 2023 10-K

327 paragraphs added · 866 removed · 219 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

135 edited+68 added−582 removed148 unchanged
Biggest changeRisk Factors—Risks Related to our Business and our Industry—The market for medical exoskeletons, including soft exo-suit devices, remains relatively new and unproven, and important assumptions about the potential market for our current and future products may be inaccurate.” Sales and Marketing activities Our initial commercialization efforts focused on penetrating rehabilitation centers, hospitals, and similar facilities that treat patients with spinal cord injuries to become an integral part of their rehabilitation programs and to develop a broad-based training network with these facilities to prepare users for home and community use.
Biggest changeRisk Factors—Risks Related to our Business and our Industry—The market for medical exoskeletons, including soft exo-suit devices, remains relatively new and unproven, and important assumptions about the potential market for our current and future products may be inaccurate.” 4 Third-Party Reimbursements United States In the U.S., individuals typically obtain a ReWalk Personal Exoskeleton for home use through third-party medical coverage.
We began marketing ReWalk Personal Exoskeleton in Europe with CE mark clearance at the end of 2012. We received FDA clearance to market ReWalk Personal in the United States in June 2014. ReWalk Personal units are all manufactured according to the same mechanical specifications.
We began marketing ReWalk Personal Exoskeleton in Europe with CE mark clearance at the end of 2012. We received FDA clearance to market the ReWalk Personal Exoskeleton in the United States in June 2014. ReWalk Personal Exoskeleton units are all manufactured according to the same mechanical specifications.
In May 2020 the DGUV agreed to a binding offer to the evaluation, training, and supply of the ReWalk Personal Exoskeleton to qualified individuals. ● In February 2018, the GKV-Spitzenverband (Central Federal Association of (the) Statutory Health Insurance Funds) confirmed its decision to list the ReWalk Personal system in the German MDD, a comprehensive list of all medical devices which are principally and regularly reimbursed by German SHI and PHI providers.
In May 2020 the DGUV agreed to a binding offer to the evaluation, training, and supply of the ReWalk Personal Exoskeleton to qualified individuals. ● In February 2018, the GKV-Spitzenverband (Central Federal Association of (the) Statutory Health Insurance Funds) confirmed its decision to list the ReWalk Personal Exoskeleton system in the German MDD, a comprehensive list of all medical devices which are principally and regularly reimbursed by German SHI and PHI providers.
This outcome means that an eligible insured person with spinal cord injury (SCI) in Germany has a legal basis for the supply of an exoskeleton as an orthopedic aid for direct disability compensation . Patients in Germany who are covered under these contracts and policies must be medically evaluated for their eligibility to use the ReWalk Personal device.
This outcome means that an eligible insured person with spinal cord injury (SCI) in Germany has a legal basis for the supply of an exoskeleton as an orthopedic aid for direct disability compensation. Patients in Germany who are covered under these contracts and policies must be medically evaluated for their eligibility to use the ReWalk Personal Exoskeleton device.
The development and regulatory clearance process for ReStore took us approximately three years. In June 2019, we received FDA clearance following CE clearance in May 2019. Following the regulatory clearances, we began to commercialize the ReStore product.
The development and regulatory clearance process for ReStore took us approximately three years. We received FDA clearance for ReStore in June 2019 and CE clearance in May 2019. Following the regulatory clearances, we began to commercialize the ReStore product.
ReBoot We are also in the research stage of ReBoot, a soft exoskeleton for stroke home and community use, and are currently evaluating the reimbursement landscape and the potential clinical impact of this device. This product would be a complementary product to ReStore, and it received Breakthrough Device Designation from the FDA in November 2021.
ReBoot Product We are also in the research stage of ReBoot, a soft exoskeleton for stroke home and community use, and are currently evaluating the reimbursement landscape and the potential clinical impact of this device. This product would be a complementary product to ReStore, and it received Breakthrough Device Designation from the FDA in November 2021.
We have sought to expand our product offerings beyond the SCI Products through internal development and distribution agreements. 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.
We have sought to expand our product offerings beyond the SCI Products through internal development and 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.
We regularly test quality on-site at Sanmina’s facility and we obtain full quality inspection reports. We maintain a non-disclosure agreement with Sanmina. We develop certain of the software components internally and license other software components that are generally available for commercial use as open-source software. We manufacture products based upon internal sales forecasts.
We regularly test quality on-site at Sanmina’s facility and we obtain full quality inspection reports. We maintain a non-disclosure agreement with Sanmina. 21 We develop certain of the software components internally and license other software components that are generally available for commercial use as open-source software. We manufacture products based upon internal sales forecasts.
This policy, the first of its kind in Italy, provides individuals with spinal cord injury access to obtain their own ReWalk Personal device so that they can stand and walk again. Since the initiation of coverage, we have supplied 10 units through our Italian distributor to individuals covered by this policy.
This policy, the first of its kind in Italy, provides individuals with spinal cord injury access to obtain their own ReWalk Personal Exoskeleton device so that they can stand and walk again. Since the initiation of coverage, we have supplied 10 units through our Italian distributor to individuals covered by this policy.
There are additional studies on-going with the ReStore device that examine the improvement in walking speed following training with the soft exo-suit as well as comparing the results of traditional training with soft exo-suit training. The main market for ReStore is rehabilitation clinics with a stroke therapy program or clinics that would like to broaden their stroke presence.
There are additional studies on-going with the ReStore device that examine the improvement in walking speed following training with the soft exo-suit as well as comparing the results of traditional training with soft exo-suit training. 9 The main market for ReStore is rehabilitation clinics with a stroke therapy program or clinics that would like to broaden their stroke presence.
This research collaboration with top researchers in the fields of robotics, behavioral sciences and human-computer interaction will seek to make the use of exoskeletons easier and more natural to promote wider adoption of the technology. On May 16, 2016, we entered into the Research Collaboration Agreement (“Collaboration Agreement”) and the Exclusive License Agreement (“Harvard License Agreement”) with Harvard.
This research collaboration with top researchers in the fields of robotics, behavioral sciences and human-computer interaction will seek to make the use of exoskeletons easier and more natural to promote wider adoption of the technology. 12 On May 16, 2016, we entered into the Research Collaboration Agreement (“Collaboration Agreement”) and the Exclusive License Agreement (“Harvard License Agreement”) with Harvard.
Risk Factors—Risks Related to our Business and our Industry— Defects in our products or the software that drives them could adversely affect the results of our operations.” 3 Overview of Spinal Cord Injury Spinal Cord Injury The spine is the central core of the human skeleton and provides structural support, alignment, and flexibility to the body.
Risk Factors—Risks Related to our Business and our Industry— Defects in our products or the software that drives them could adversely affect the results of our operations.” Overview of Spinal Cord Injury Spinal Cord Injury The spine is the central core of the human skeleton and provides structural support, alignment, and flexibility to the body.
Specifically, if the FDA determines that we failed to comply with applicable regulatory requirements, it can take a variety of compliance or enforcement actions, which may result in any of the following sanctions: ● untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties; ● customer notifications or repair, replacement, or refunds; ● recalls, withdrawals, or administrative detention or seizure of our products; ● operating restrictions or partial suspension or total shutdown of production; ● refusing or delaying requests for approval of pre-market approval applications relating to new products or modified products; ● withdrawing PMA approval; ● refusal to grant export approvals for our products; or ● pursuing criminal prosecution.
Specifically, if the FDA determines that we failed to comply with applicable regulatory requirements, it can take a variety of compliance or enforcement actions, which may result in any of the following sanctions: ● untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties; ● customer notifications or repair, replacement, or refunds; ● recalls, withdrawals, or administrative detention or seizure of our products; ● operating restrictions or partial suspension or total shutdown of production; ● refusing or delaying requests for approval of pre-market approval applications relating to new products or modified products; ● withdrawing PMA approval or reclassifying our devices; ● refusal to grant export approvals for our products; or ● pursuing criminal prosecution.
In the United States, it is also common for government and private health plans to use coverage determinations to leverage rebates from labelers to reduce the plans’ net costs. These restrictions and limitations influence the purchase of healthcare services and products and lower the realization on manufacturers’ sales of products.
In the United States, it is also common for certain government and private health plans to use coverage determinations to leverage rebates from labelers to reduce the plans’ net costs. These restrictions and limitations influence the purchase of healthcare services and products and lower the realization on manufacturers’ sales of products.
Our agreement with Sanmina contains a limitation on liability that applies equally to both us and Sanmina. We believe that this contract manufacturing relationship allows us to operate our business efficiently by focusing our internal efforts on the development and commercialization of our technology and our products and provides us with substantial scale-up capacity.
Our agreement with Sanmina contains a limitation on liability that applies equally to us and Sanmina. We believe that this contract manufacturing relationship with Sanmina allows us to operate our business efficiently by focusing our internal efforts on the development and commercialization of our technology and our products and provides us with substantial scale-up capacity.
Additionally, such coverage or reimbursement, even if maintained, may not produce revenue that is high enough to allow us to sell our products profitably.” 7 We continue to support clinical research and academic publications, which we believe will further support the case for coverage.
Additionally, such coverage or reimbursement, even if maintained, may not produce revenue that is high enough to allow us to sell our products profitably.” We continue to support clinical research and academic publications, which we believe will further support the case for coverage.
We may also compete with other treatments and technologies that address the secondary medical conditions that ReWalk seeks to mitigate. 9 Community Engagement and Education We devote significant resources to engagement with and education of the spinal cord injury community with respect to the benefits of our SCI Products, as well as for our ReStore device.
We may also compete with other treatments and technologies that address the secondary medical conditions that ReWalk seeks to mitigate. Community Engagement and Education We devote significant resources to engagement with and education of the spinal cord injury community with respect to the benefits of our SCI Products, as well as for our ReStore device.
The device sponsor must then fulfill more rigorous premarket approval requirements or can request a risk-based classification determination for the device in accordance with the “de novo” classification process, which is a route to market for medical devices that are low to moderate risk but are not substantially equivalent to a predicate device. 12 Devices that are intended to be life sustaining or life supporting, devices that are implantable, devices that present a potential unreasonable risk of harm or are of substantial importance in preventing impairment of health, and devices that are not substantially equivalent to a predicate device are placed in Class III and generally require approval of a PMA, unless the device is a pre-amendment device not yet subject to a regulation requiring premarket approval.
The device sponsor must then fulfill more rigorous premarket approval requirements or can request a risk-based classification determination for the device in accordance with the “de novo” classification process, which is a route to market for medical devices that are low to moderate risk but are not substantially equivalent to a predicate device. 14 Devices that are intended to be life sustaining or life supporting, devices that are implantable, devices that present a potential unreasonable risk of harm or are of substantial importance in preventing impairment of health, and devices that are not substantially equivalent to a predicate device are placed in Class III and generally require approval of a PMA, unless the device is a pre-amendment device not yet subject to a regulation requiring premarket approval.
On January 2, 2013, the American Taxpayer Relief Act was signed into law, which, among other things, reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. 18 Further legislative and regulatory changes under the ACA remain possible, although President Biden indicated that he intends to use executive orders to undo changes to the ACA made by the Trump administration and would advocate for legislation to build on the ACA.
On January 2, 2013, the American Taxpayer Relief Act was signed into law, which, among other things, reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. 20 Further legislative and regulatory changes under the ACA remain possible, although President Biden indicated that he intends to use executive orders to undo changes to the ACA made by the Trump administration and would advocate for legislation to build on the ACA.
Components of our products and raw materials come from suppliers in the United States, Europe, China, and Israel, and we depend on certain of these components and raw materials, including certain electronic parts, for the manufacture of our products. To date, we have not experienced significant volatility in the prices of these components and raw materials.
Components of our products and raw materials come from suppliers in the United States, Europe, China, Taiwan, and Israel, and we depend on certain of these components and raw materials, including certain electronic parts, for the manufacture of our products. To date, we have not experienced significant volatility in the prices of these components and raw materials.
Our principal competitors in the medical exoskeleton market consist of Ekso Bionics (NASDAQ: EKSO), Rex Bionics Pty, Cyberdyne (Tokyo Stock Exchange: 7779), FREE Bionics, DIH (formerly known as Hocoma), AlterG, Wandercraft, and Bioness (acquired by Bioventus (NASDAQ: BVS).
Our principal competitors in the medical exoskeleton market consist of Ekso Bionics (NASDAQ: EKSO), Rex Bionics Pty, Cyberdyne (Tokyo Stock Exchange: 7779), FREE Bionics, DIH (formerly known as Hocoma), Wandercraft, and Bioness (acquired by Bioventus (NASDAQ: BVS).
Designed for daily use, the device is battery-powered and consists of a light, wearable exoskeleton with integrated motors at the joints, an array of sensors and a computer-based control system to power knee and hip movement.
Designed for daily use, the device is battery-powered and consists of a wearable exoskeleton with integrated motors at the joints, an array of sensors and a computer-based control system to power knee and hip movement.
In a complete injury, a person loses all ability to feel and voluntarily move below the level of the injury. In an incomplete injury, there is some functioning below the level of the injury. Upon examination, a patient is assigned a level of injury depending on the location of the spinal cord injury.
In a complete injury, a person loses all ability to feel and voluntarily move below the level of the injury. In an incomplete injury, there is some functioning below the level of the injury. Upon medical examination, a patient is assigned a level of injury depending on the location of the spinal cord injury.
We believe that using our SCI Products may have the ability to reduce the lifetime healthcare costs of individuals with spinal cord injuries, which we believe will make it economically attractive for individuals and third-party payors.
We believe that using our SCI Products may have the ability to reduce the lifetime healthcare costs of individuals with spinal cord injuries, which we believe will make our SCI Products economically attractive for individuals and third-party payors.
In the European marketplace, electrical and electronic equipment is required to comply with the Directive on Waste Electrical and Electronic Equipment, which aims to prevent waste by encouraging reuse and recycling, and the Directive on Restriction of Use of Certain Hazardous Substances (“RoHS”), which restricts the use of ten hazardous substances in electrical and electronic products.
In the European marketplace, electrical and electronic equipment is required to comply with the Directive on Waste Electrical and Electronic Equipment, which aims to prevent waste by encouraging reuse and recycling, and the Directive on Restriction of Use of Certain Hazardous Substances, which restricts the use of ten hazardous substances in electrical and electronic products.
In addition, the government may assert that a claim that includes items or services resulting from a violation of the federal anti-kickback statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act (“FCA”). 15 The civil FCA prohibits, among other things, any person or entity from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment to, or approval by, the federal government, knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government, or avoiding, decreasing, or concealing an obligation to pay money to the federal government.
In addition, the government may assert that a claim that includes items or services resulting from a violation of the federal anti-kickback statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act (“FCA”). 17 The civil FCA prohibits, among other things, any person or entity from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment to, or approval by, the federal government, knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government, or avoiding, decreasing, or concealing an obligation to pay money to the federal government.
In general, each third-party payor decides which devices will be covered and reimbursed, establishes reimbursement and co-pay levels and sets conditions for coverage and reimbursement. While no broad uniform policy of coverage and reimbursement for electronic exoskeleton medical technology exists among commercial insurance payors in the United States, reimbursement may be achieved on a case-by-case basis.
In general, each third-party payor decides which devices will be covered and reimbursed, establishes reimbursement and co-pay levels and sets conditions for coverage and reimbursement. While no broad uniform policy of coverage and reimbursement for electronic exoskeleton medical technology exists among commercial insurance payors in the United States, reimbursement may be evaluated by the payor on a case-by-case basis.
In the longer term we are conducting research for our next generation device with design improvements and advanced robotic technologies as part of the Human Robot Interaction Consortium research program. New medical indications impacting the ability to walk that we may pursue include multiple sclerosis, cerebral palsy, Parkinson’s disease, and elderly assistance.
In the longer term we are conducting research for our next generation exoskeleton with design improvements and advanced robotic technologies as part of the Human Robot Interaction Consortium research program. New medical indications impacting the ability to walk that we may pursue include multiple sclerosis, cerebral palsy, Parkinson’s disease, and elderly assistance.
Third-party payors are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy. 17 Federal programs also impose price controls through mandatory ceiling prices on purchases by federal agencies and federally funded hospitals and clinics. These restrictions and limitations influence the purchase of healthcare services and products.
Third-party payors are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy. 19 Federal programs also impose price controls through mandatory ceiling prices on purchases by federal agencies and federally funded hospitals and clinics. These restrictions and limitations influence the purchase of healthcare services and products.
In June 2014, the FDA granted our petition for “de novo” classification, and classified ReWalk as a Class II powered exoskeleton device subject to special controls. The ReWalk is intended to enable individuals with spinal cord injuries to perform ambulatory functions under supervision of a specially trained companion, and inside rehabilitation institutions.
In June 2014, the FDA granted our request for “de novo” classification, and classified ReWalk as a Class II powered exoskeleton device subject to special controls. The ReWalk is intended to enable individuals with spinal cord injuries to perform ambulatory functions under supervision of a specially trained companion, and inside rehabilitation institutions.
To date, payments for the ReWalk Personal device have been made primarily through case-by-case determinations by third-party payors, including commercial insurers in the United States, by self-payors and donations and, to a lesser extent, through the use of funds from insurance and/or accident settlements.
To date, payments for the ReWalk Personal Exoskeleton have been made primarily through case-by-case determinations by third-party payors, including commercial insurers in the United States, by self-payors and donations and, to a lesser extent, through the use of funds from insurance and/or accident settlements.
With 25 VA spinal cord injury centers designated SCI/D Hub locations, the VA has the largest single network of spinal cord injury care in the United States. The University of Alabama-Birmingham Department of Physical Medicine and Rehabilitation operates the NSCISC, which maintains the world’s largest database on spinal cord injury research.
With 25 VHA spinal cord injury centers designated SCI/D Hub locations, the VHA has the largest single network of spinal cord injury care in the United States. The University of Alabama-Birmingham Department of Physical Medicine and Rehabilitation operates the NSCISC, which maintains the world’s largest database on spinal cord injury research.
For an individual who suffered an SCI through a work-related incident, workers’ compensation insurance can be a source of funding to purchase the device. Similarly, for U.S. veterans, an individual may be covered by the VA for the purchase of the device regardless of whether the SCI occurred during active military service.
For an individual who suffered an SCI through a work-related incident, workers’ compensation insurance can be a source of funding to purchase the device. Similarly, for U.S. veterans, an individual may be covered by the VHA for the purchase of the device regardless of whether the SCI occurred during active military service.
Our manufacturing processes are required to comply with the applicable portions of the Quality System Regulation that covers the methods and the facilities and controls for the design, manufacture, testing, production, processes, controls, quality assurance, labeling, packaging, distribution, installation, and servicing of finished devices intended for human use.
Our manufacturing processes are required to comply with the applicable portions of the FDA’s Quality System Regulation (“QSR”) that covers the methods and the facilities and controls for the design, manufacture, testing, production, processes, controls, quality assurance, labeling, packaging, distribution, installation, and servicing of finished devices intended for human use.
Where possible, we anticipate these factors in our product development processes. 14 Regulation outside of the U.S. In addition to the United States regulations, we are subject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of our products.
Where possible, we anticipate these factors in our product development processes. 16 Regulation Outside of the U.S. In addition to the United States regulations, we are subject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of our products.
This decision means that ReWalk Personal 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 we announced several new agreements with SHIs such as TK and DAK-Gesundheit and others as well as the first German Private Health Insurer (“PHI”) that chose to enter into an agreement with us that outline the process to obtaining a device for eligible insured patients. ● In March 2021 we entered into a contract with BKK Mobile Oil health insurance to supply ReWalk’s Personal Exoskeleton to eligible persons in Germany. ● In June 2020, BARMER appealed the decision of the State Social Court, which ordered the supply of the SHI’s insured SCI person with ReWalk.
This decision means that ReWalk Personal Exoskeleton 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 we announced several new agreements with SHIs such as TK and DAK-Gesundheit and others as well as the first PHI that chose to enter into an agreement with us that outline the process to obtaining a device for eligible insured patients. ● In March 2021 we entered into a contract with BKK Mobile Oil health insurance to supply ReWalk’s Personal Exoskeleton to eligible persons in Germany. ● In June 2020, BARMER appealed the decision of the State Social Court, which ordered the supply of the SHI’s insured SCI person with ReWalk.
According to the VA data there are approximately 42,000 of such patients who are veterans and are eligible for medical care and other benefits from the VA, out of which the VA states that 27,000 veterans are receiving SCI treatment annually.
According to the VHA data there are approximately 42,000 of such patients who are veterans and are eligible for medical care and other benefits from the VHA, out of which the VHA states that 27,000 veterans are receiving SCI treatment annually.
To date, multiple advocacy groups have issued public endorsements of the ReWalk Personal device, including leading United States-based national organizations such as the United Spinal Association and the Dana and Christopher Reeves Foundation, as well as others.
To date, multiple advocacy groups have issued public endorsements of the ReWalk Personal Exoskeleton, including leading United States-based national organizations such as the United Spinal Association and the Dana and Christopher Reeves Foundation, as well as others.
If a patient is found eligible and medically fit to use our Personal 6.0 device, we first enter into a rental agreement which allows the patient the necessary period to train on how to use the device which usually takes between 3 to 6 months and then after approval from the insurer the patient receives a personal device to use at home or in the community.
If a patient is found eligible and medically fit to use our ReWalk Personal Exoskeleton device, we first enter into a rental agreement which allows the patient the necessary period to train on how to use the device which usually takes between 3 to 6 months and then after approval from the insurer the patient receives a personal device to use at home or in the community.
For more information on the collaboration with Harvard, see “Research and Development-Research and Development Collaborations.” ReStore Exo-Suit The ReStore product is comprised of a soft, fabric-based design that connects to a lightweight waist pack and mechanical cables that help lift the patient’s affected leg in synchronized timing with their natural walking pattern.
For more information on the collaboration with Harvard, see “Research and Development-Research and Development Collaborations.” ReStore Exo-Suit The ReStore product consists of a soft, fabric-based design that connects to a lightweight waist pack and mechanical cables that help lift the patient’s affected leg in synchronized timing with their natural walking pattern.
Other Funding Sources In addition to being funded by third-party payors, including private insurance plans, government programs such as the VA, and workers’ compensation plans, ReWalk Personal is also funded by self-payors. This includes individuals who purchase ReWalk with funds from legal settlements with insurance companies or third parties.
Other Funding Sources In addition to being funded by third-party payors, including private insurance plans, government programs such as the VHA, and workers’ compensation plans, ReWalk Personal Exoskeleton is also funded by self-payors. This includes individuals who purchase ReWalk with funds from legal settlements with insurance companies or third parties.
Third-party payors are developing increasingly sophisticated methods of controlling healthcare costs. Third-party payors may limit coverage to specific therapeutic products on an approved list, or formulary, which might not include all of the FDA-approved products for a particular indication or might impose high copayment amounts to influence patient choice.
Third-party payors are developing increasingly sophisticated methods of controlling healthcare costs. Third-party payors may limit coverage to specific therapeutic products on an approved list, or formulary, which might not include all of the FDA-approved products for a particular indication or might impose high co-payment amounts to influence patient choice.
In Israel, where our contract manufacturer produces all of our products, businesses storing or using certain hazardous materials (including materials necessary for our manufacturing process) are required, pursuant to the Israeli Dangerous Substances Law, 5753-1993, to obtain a toxin permit from the Ministry of Environmental Protection.
In Israel, where our contract manufacturer produces all of our ReWalk and ReStore products, businesses storing or using certain hazardous materials (including materials necessary for our manufacturing process) are required, pursuant to the Israeli Dangerous Substances Law, 5753-1993, to obtain a toxin permit from the Ministry of Environmental Protection.
Four published ReWalk trials for SCI patients had an aggregate screening acceptance rate of 50% considering all current FDA limitations, resulting in an estimated 20.2% of the total population of SCI patients can be considered as candidates for current ReWalk Personal Exoskeleton according to the device instructions for use.
Four published ReWalk trials for SCI patients had an aggregate screening acceptance rate of 50% considering all current FDA limitations, resulting in an estimated 20% of the total population of SCI patients can be considered as candidates for current ReWalk Personal Exoskeleton or ReWalk Rehabilitation Exoskeleton according to the device instructions for use.
We place our manufacturing orders with Sanmina pursuant to purchase orders or by providing forecasts for future requirements. We may terminate our relationship with Sanmina at any time upon written notice. Either we or Sanmina may terminate the relationship in the event of a material breach, subject to a 30-day cure period.
We place our manufacturing orders with Sanmina and other suppliers pursuant to purchase orders or by providing forecasts for future requirements. We may terminate our relationship with Sanmina or our other suppliers at any time upon written notice. Either we or Sanmina may terminate the relationship in the event of a material breach, subject to a 30-day cure period.
Our products and certain components of such products “put on the market” in the EU (whether or not manufactured in the EU) are subject to these directives. Additionally, we are required to comply with certain laws, regulations, and directives, including the Toxic Substances Control Act in the United States and REACH in the EU, governing chemicals.
Our products and certain components of such products “put on the market” in the E.U. (whether or not manufactured in the E.U.) are subject to these directives. Additionally, we are required to comply with certain laws, regulations, and directives, including the Toxic Substances Control Act in the United States and REACH in the E.U., governing chemicals.
Class II devices are those for which general controls alone are insufficient to provide reasonable assurance of safety and effectiveness and there is sufficient information to establish “special controls.” These special controls can include performance standards, post-market surveillance, patient registries, and FDA guidance documents.
Class II devices are those for which general controls alone are insufficient to provide reasonable assurance of safety and effectiveness and there is sufficient information to establish “special controls.” These special controls can include performance standards, post-market surveillance, and patient registries.
We believe that our and Sanmina’s facilities, our contracted manufacturing arrangement, and our supply arrangements are sufficient to support our potential capacity needs for the foreseeable future.
We believe that our in-house manufacturing, Sanmina’s facilities, our contracted manufacturing arrangement, and our supply arrangements are sufficient to support our potential capacity needs for the foreseeable future.
Risk Factors — Risks Related to Our Business and Our Industry — Our future growth and operating results will depend on our ability to develop, receive regulatory clearance for, and commercialize new products and penetrate new product and geographic markets.” We are working on product design improvements and expanded labeling for the ReWalk Personal 6.0 product which we plan to launch following regulatory approvals.
Risk Factors — Risks Related to Our Business and Our Industry — Our future growth and operating results will depend on our ability to develop, receive regulatory clearance for, and commercialize new products and penetrate new product and geographic markets.” We are working on product design improvements and expanded labeling for the ReWalk Personal Exoskeleton product which we plan to launch following obtaining regulatory clearance and approvals.
We also believe that to accelerate adoption, further clinical evidence is required as well as continued education on the new ReStore design and its unique advantages compared to current therapies and products. As of December 31, 2022, and December 31, 2021, we had placed 33 and 30 ReStore units, respectively.
We also believe that to accelerate adoption, further clinical evidence is required as well as continued education on the new ReStore design and its unique advantages compared to current therapies and products. As of December 31, 2023, and December 31, 2022, we had placed 42 and 33 ReStore units, respectively.
According to NSCISC data, upon hospital discharge, 87% of persons with spinal cord injuries are sent to private, non-institutional residence (in most cases, their homes prior to injury). Based on information from a 2021 report by the NSCISC, 40% of the total U.S. population of SCI patients suffered injuries between levels T4 and L5.
According to NSCISC data, upon hospital discharge, 87% of persons with spinal cord injuries are sent to private, non-institutional residence (in most cases, their homes prior to injury). Based on information from the 2022 annual report published by the NSCISC, 40% of the total U.S. population of SCI patients suffered injuries between levels T4 and L5.
We continue to work with the VA to both accelerate the pace of implementation of the current VA policy nationally, and to again expand opportunities for veterans to gain access to assessments, training, and devices in facilities outside VA’s traditional spinal cord injury “hub and spoke” infrastructure.
We continue to work with the VHA to both accelerate the pace of implementation of the current VHA policy nationally, and to again expand opportunities for veterans to gain access to assessments, training, and devices in facilities outside VHA’s traditional spinal cord injury “hub and spoke” infrastructure.
We are currently working with several additional SHIs and PHIs on securing a formal operating contract that will establish the process of obtaining a ReWalk Personal Exoskeleton for their beneficiaries within their system. As of December 31, 2022, there were 47 insurance cases pending in Germany.
We are currently working with several additional SHIs and PHIs on securing a formal operating contract that will establish the process of obtaining a ReWalk Personal Exoskeleton for their beneficiaries within their system. 6 As of December 31, 2023, there were 49 insurance cases pending in Germany.
In addition, we compete with alternative devices and alternative therapies, including treadmill-based gait therapies, such as those offered by Hocoma, Tyromotion, AlterG, Aretech and Reha Technology.
In addition, we compete with alternative devices and alternative therapies, including treadmill-based gait therapies, such as those offered by Hocoma, Tyromotion, Boost, Aretech, BTL, and Reha Technology.
Our research and development efforts have been financed, in part, through funding from the Israel Innovation Authority, or the IIA (formerly known as Office of the Chief Scientist in the Israel Ministry of Economy) (“IIA”). From our inception through December 31, 2022, we received funding totaling $2.3 million from the IIA.
Our research and development efforts have been financed, in part, through funding from the Israel Innovation Authority (formerly known as Office of the Chief Scientist in the Israel Ministry of Economy) (the “IIA”). From our inception through December 31, 2023, we received funding totaling $2.6 million from the IIA.
During the second quarter of 2020, we finalized and moved to implement two separate agreements to distribute additional product lines in the United States. We are 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 the U.S. Department of Veterans Affairs (“VA”) hospitals.
During the second quarter of 2020, we finalized and moved to implement two separate agreements to distribute additional product lines in the United States. We are 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 the Veterans Health Administration (“VHA”) hospitals.
The National Spinal Cord Injury Statistical Center (the “NSCISC”) estimates that complications related to paraplegia cost, excluding indirect costs such as losses in wages, fringe benefits, and productivity, approximately $500,000 in the first-year post-injury and significant additional amounts over the course of an individual’s lifetime. Further, secondary complications related to spinal cord injury can reduce life expectancies for SCI patients.
The NSCISC estimates that complications related to paraplegia cost approximately $500,000 in the first-year post-injury, excluding indirect costs such as loss in wages, fringe benefits, and productivity, and significant additional amounts over the course of an individual’s lifetime. Further, secondary complications related to spinal cord injury can reduce life expectancies for SCI patients.
As of December 31, 2022, we have 12 issued patents in the United States and 19 issued patents outside of the United States, as well as 11 pending patent applications for our technology in the United States, China, and Europe.
As of December 31, 2023, we have 11 issued patents in the United States and 19 issued patents outside of the United States, as well as 13 pending patent applications for our technology in the United States, China, and Europe.
In June 2018, the VA updated the SOP, in part, to expand training options for individuals who could not complete the mandatory training due to excessive distance/drive times from a VA-designated site. As of December 31, 2022, we had placed 34 units as part of the VA policy.
In June 2018, the VHA updated the SOP, in part, to expand training options for individuals who could not complete the mandatory training due to excessive distance/drive times from a VHA-designated site. As of December 31, 2023, we had placed 42 units as part of the VHA policy.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” and “—Grants and Other Funding.” 10 Research and Development Collaborations On April 1, 2022, we entered a research and development cooperation agreement with several companies and universities in the Human Robot Interaction (HRI) Consortium, part of the Israel Innovation Authority’s MAGNET incentive program.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” and “—Grants and Other Funding.” Research and Development Collaborations On April 1, 2022, we entered a research and development cooperation agreement with several companies and universities in the Human Robot Interaction (“HRI”) Consortium, part of the IIA’s MAGNET incentive program.
In most cases, arms and hands are not affected. Lumbar level injuries result in paralysis or weakness of the legs (paraplegia). Loss of physical sensation, bowel, bladder, and sexual dysfunction can occur. The shoulder, arm, and hand functions are usually unaffected. Sacral level injuries primarily cause loss of bowel and bladder function as well as sexual dysfunction.
In most cases, arms and hands are not affected. Lumbar level injuries result in paralysis or weakness of the legs (paraplegia). Loss of physical sensation, bowel, bladder, and sexual dysfunction can occur. The shoulder, arm, and hand functions are usually unaffected.
This allows us to continue to apply the CE mark to our products and place them on the market throughout the E.U. during the transition period until 2024 or until we have completed an appropriate conformity assessment procedure under the MDR.
This allows us to continue to apply the CE mark to our products and place them on the market throughout the E.U. during the transition period or until we have completed an appropriate conformity assessment procedure under the MDR. Following the U.K.’s exit from the E.U.
CE marks will be recognized until June 2024), requiring manufacturers outside of the United Kingdom to appoint a “UK Responsible Person” if they place devices on the Great British market and more wide-ranging device registration requirements.
CE marks will be recognized potentially up until June 2030), requiring manufacturers outside of the United Kingdom to appoint a “UK Responsible Person” if they place devices on the Great Britain market and more wide-ranging device registration requirements.
As of December 31, 2022, we had 13 cases pending in the United States for insurance coverage decisions. According to the NSCISC report, approximately 56% of the spinal cord injury population received primary coverage from Medicare and Medicaid within five years after their injury date, with Medicare representing the larger primary payor.
As of December 31, 2023, we had 21 cases pending in the United States for private insurance and CMS coverage decisions. According to the NSCISC 2022 annual report, approximately 57% of the spinal cord injury population received primary coverage from Medicare and Medicaid within five years after their injury date, with Medicare representing the larger primary payor.
We believe that our ReWalk Personal device possesses key competitive advantages over these companies’ products, such as our tilt-sensor technology that provides a self-initiated walking experience, more natural gait and faster functional walking speed, the ability to support its own weight and broad user specifications.
We believe that our ReWalk Personal Exoskeleton possesses key competitive advantages over these companies’ products, such as our tilt-sensor technology that provides a self-initiated walking experience, six degrees of freedom which enable a more natural gait, faster functional walking speed, the ability to support its own weight, and broad user specifications.
We expect that changes or additions to the ACA or the Medicare and Medicaid programs, changes allowing the federal government to directly negotiate drug prices and changes stemming from other healthcare reform measures, especially with regard to healthcare access, financing or other legislation in individual states, could have a material adverse effect on the healthcare industry.
We expect that changes or additions to the ACA or the Medicare and Medicaid programs, and changes stemming from other healthcare reform measures, especially with regard to healthcare access, financing or other legislation in individual states, could have a material adverse effect on the healthcare industry.
In December 2014, the VA issued a national policy or standard operating procedure (SOP) for the evaluation, training, and procurement of ReWalk Personal exoskeleton systems for all qualifying veterans across the United States and U.S. Territories. The VA SOP is the first national coverage policy in the United States for qualifying individuals who have suffered spinal cord injury.
In December 2014, the VHA issued a national policy or standard operating procedure (“SOP”) for the evaluation, training, and procurement of ReWalk Personal Exoskeleton systems for all qualifying veterans across the United States and U.S. Territories. The VHA SOP is the first national coverage policy in the United States for qualifying individuals who are living with spinal cord injury.
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 U.S. Food and Drug Administration (“FDA”) in November 2021.
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.
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 VA policy that was issued in December 2015 for the evaluation, training, and procurement of ReWalk Personal exoskeleton systems for all qualifying veterans suffering from spinal cord injury (“SCI”) across the United States.
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.
Community-based, non-VA clinics are also being leveraged to allow veterans to be trained in communities closer to their homes, while still being reimbursed by the VA as part of the VA’s Community Care Network program.
Community-based, non-VHA clinics are also being leveraged to allow veterans to be trained closer to their homes, while still being reimbursed by the VHA as part of the VHA’s Community Care Network program.
Post-Brexit the MDR does not apply in the United Kingdom (except for Northern Ireland, which under the Northern Irish Protocol is bound by certain E.U. laws). The medical device legislative framework in the United Kingdom is set out in the Medical Devices Regulations 2002.
(known as “Brexit”), the MDR does not apply in the United Kingdom (except for Northern Ireland, which under the Northern Ireland Protocol is bound by certain E.U. laws). The medical device legislative framework in the United Kingdom is set out in the Medical Devices Regulations 2002, as amended.
These and similar laws and regulations require the testing, reporting and registration of certain chemicals we use and ship. We believe we comply in all material respects with applicable environmental laws and regulations. Manufacturing ReWalk includes off-the-shelf and custom-made components produced to our specifications by various third parties, for technical and cost-effectiveness.
These and similar laws and regulations require the testing, reporting and registration of certain chemicals we use and ship. We believe we comply in all material respects with applicable environmental laws and regulations. Manufacturing Our ReWalk exoskeletons, ReStore exo-suits, and AlterG Anti-Gravity systems include off-the-shelf and custom-made components produced to our specifications by various third parties, for technical and cost-effectiveness.
Since 2015, motor vehicle crashes have been the leading cause of reported spinal cord injury cases (39%), followed by falls (32%), acts of violence (14%) and sports injuries (8%). 78% of spinal cord injuries occur among the male population.
Since 2015, motor vehicle crashes have been the leading cause of reported spinal cord injury cases (38%), followed by falls (32%), acts of violence (15%) and sports injuries (8%). Approximately 79% of spinal cord injuries occur among the male population.
We are currently offering our 6 th generation device. ● ReWalk Rehabilitation : the current offering for clinics who wish to implement exoskeleton training is composed of our Personal 6.0 unit along with multiple sizing of different parts, enabling multiple patient use. ReWalk Rehabilitation provides a valuable means of exercise and therapy.
We are currently offering our 6 th generation device (6.0) with current research and development for our 7 th generation device (7.0). ● ReWalk Rehabilitation Exoskeleton : the current offering for clinics who wish to implement exoskeleton training is composed of our Rewalk Personal Exoskeleton unit along with multiple sizing of different parts, enabling multiple patient use.
ReWalk Personal 6.0 Additionally, we have received regulatory approval to sell the ReWalk Personal device in other countries. In the future we intend to seek approval from the applicable regulatory agencies in other jurisdictions where we may seek to market ReWalk Personal. For more information about the safety of using our SCI products see “Part I, Item 1A.
In the future we intend to seek approval from the applicable regulatory agencies in other jurisdictions where we may seek to market ReWalk Personal Exoskeleton. For more information about the safety of using our SCI products see “Part I, Item 1A.
As of December 31, 2022, we had placed 128 ReWalk Rehabilitation units in use at rehabilitation centers and 572 ReWalk Personal units in a home or community use, compared to 121 ReWalk Rehabilitation units and 533 ReWalk Personal units as of December 31, 2021.
As of December 31, 2023, we had placed 131 ReWalk Rehabilitation Exoskeleton units in use at rehabilitation centers and 598 ReWalk Personal Exoskeleton units in a home or community use, compared to 128 ReWalk Rehabilitation Exoskeleton units and 572 ReWalk Personal Exoskeleton units as of December 31, 2022.
Additionally, the Affordable Care Act (“ACA”) amended the intent requirement of certain of these criminal statutes under HIPAA so that a person or entity no longer needs to have actual knowledge of the statute, or the specific intent to violate it, to have committed a violation.
Additionally, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act, or collectively the “ACA”, amended the intent requirement of certain of these criminal statutes under HIPAA so that a person or entity no longer needs to have actual knowledge of the statute, or the specific intent to violate it, to have committed a violation.
However, during the pandemic we have seen several specific parts, mainly electronic parts, suffer price increases. Such prices are subject to a number of factors, including purchase volumes, general economic conditions, currency exchange rates, industry cycles, production levels, and scarcity of supply.
However, during the COVID-19 pandemic several specific parts, mainly electronic parts, experienced temporary price increases which have returned to more normal levels. Such prices are subject to a number of factors, including purchase volumes, general economic conditions, currency exchange rates, industry cycles, production levels, and scarcity of supply.
We actively maintain compliance with the FDA’s Quality System Regulation, 21 CFR Part 820, and the European Union’s Quality Management Systems requirements, ENISO 13485:2016. As a manufacturer, we are subject to periodic scheduled or unscheduled inspections by the FDA.
We actively maintain compliance with the FDA’s QSR, and the European Union’s Quality Management Systems requirements, ISO 13485:2016. As a manufacturer, we are subject to periodic scheduled or unscheduled inspections by the FDA.
Our efforts in the future will be focused on continued education of third-party payors through data application, supporting clinical trials to demonstrate the clinical benefits of using the SCI Products, working with advocacy groups, ongoing communication as well continuing to seek greater clarity regarding Medicare coverage and reimbursement standards applicable to the ReWalk Personal Exosleleton. 6 Europe Reimbursement for ReWalk in Europe varies by country and historically certain third-party payors have provided reimbursement for our products in certain cases in Germany and Italy.
Our efforts in the future will be focused on continued education of third-party payors through data application, supporting clinical trials to demonstrate the clinical benefits of using the SCI Products, working with advocacy groups, ongoing communication as well continuing to seek greater clarity regarding Medicare coverage and reimbursement standards applicable to the ReWalk Personal Exoskeleton.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe table below sets forth details of the square footage of our current leased properties, all of which are utilized. We have no material tangible fixed assets apart from the properties described below. Square feet (approximate) Marlborough, Massachusetts 11,850 Yokneam, Israel 11,500 Berlin, Germany 947 Total 24,297 We believe our facilities are adequate and suitable for our current needs.
Biggest changeThe table below sets forth details of the square footage of our current leased properties, all of which are utilized. We have no material tangible fixed assets apart from the properties described below.
ITEM 2. PROPERTIES Our corporate headquarters are located in Yokneam, Israel, our U.S. headquarters are located in Marlborough, Massachusetts, and our European headquarters are located in Berlin, Germany. All of our facilities are leased, and we do not own any real property.
ITEM 2. PROPERTIES Our corporate headquarters are located in Yokneam, Israel, our U.S. headquarters are located in Marlborough, Massachusetts, with additional offices in Fremont, California, and Queens, New York, and our European headquarters are located in Berlin, Germany. All of our facilities are leased, and we do not own any real property.
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Square feet (approximate) Fremont, California 40,320 Marlborough, Massachusetts 11,850 Yokneam, Israel 11,500 Queens, New York 1,105 Berlin, Germany 950 Total 65,725 We believe our facilities are adequate and suitable for our current needs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeIn making a determination regarding accruals, using available information, the Company evaluates the likelihood of an unfavorable outcome in legal or regulatory proceedings to which we are a party and records a loss contingency when it is probable a liability has been incurred and the amount of the loss can be reasonably estimated.
Biggest changeIn making a determination regarding accruals, using available information, we evaluate the likelihood of an unfavorable outcome in legal or regulatory proceedings to which we are a party and records a loss contingency when it is probable a liability has been incurred and the amount of the loss can be reasonably estimated.
For information regarding legal proceedings, see Note 7 “Commitments and Contingent Liabilities” in the notes to our audited consolidated financial statements included in this annual report, which discussion we incorporate by reference into this Item. ITEM 4. MINE SAFETY DISCLOSURES . Not applicable. 52 PART II
For information regarding legal proceedings, see Note 7 “Commitments and Contingent Liabilities” in the notes to our audited consolidated financial statements included in this annual report, which discussion we incorporate by reference into this Item. ITEM 4. MINE SAFETY DISCLOSURES . Not applicable. 56 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeExcept in connection with our publicly announced share repurchase program described immediately below under “Issuer Purchases of Equity Securities”, we currently intend to retain future earnings, if any, to finance operations and expand our business.
Biggest changeWe currently intend to retain future earnings, if any, to finance operations and expand our business.
In addition, the individual will be deemed to be a substantial shareholder if at any time during the 12 months preceding the date of the sale he or she was a substantial shareholder. 53 Dividends paid on publicly traded shares, like our ordinary shares, to non-Israeli residents are generally subject to Israeli income tax at the rate of 25%, or 30% if the recipient of the dividend was a substantial shareholder at the time of distribution or at any time during the prior 12-month period.
In addition, the individual will be deemed to be a substantial shareholder if at any time during the 12 months preceding the date of the sale he or she was a substantial shareholder. 57 Dividends paid on publicly traded shares, like our ordinary shares, to non-Israeli residents are generally subject to Israeli income tax at the rate of 25%, or 30% if the recipient of the dividend was a substantial shareholder at the time of distribution or at any time during the prior 12-month period.
Individuals who are subject to tax in Israel are also subject to an additional tax at the rate of 3% on annual income exceeding a certain threshold (NIS 663,240 for 2022, linked to the annual change in the Israeli Consumer Price Index), including, but not limited to, income derived from dividends, interest, and capital gains.
Individuals who are subject to tax in Israel are also subject to an additional tax at the rate of 3% on annual income exceeding a certain threshold (NIS 721,560 for 2024, linked to the annual change in the Israeli Consumer Price Index), including, but not limited to, income derived from dividends, interest, and capital gains.
As of February 23, 2023, we had approximately 278,511 shareholders of record. Dividend Policy We have never declared or paid any cash dividends on our ordinary shares. We do not anticipate paying any cash dividends in the foreseeable future.
In January 2024, the symbol for our ordinary shares was changed to “LFWD”. As of February 23, 2024, we had approximately 278,478 shareholders of record. Dividend Policy We have never declared or paid any cash dividends on our ordinary shares. We do not anticipate paying any cash dividends in the foreseeable future.
Removed
Recent Sales of Unregistered Equity Securities All sales of unregistered equity securities during the covered period were disclosed on a Current Report on Form 8-K or a Quarterly Report on Form 10-Q.
Added
Recent Sales of Unregistered Equity Securities None. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. ITEM 6. [RESERVED]
Removed
Purchases of Equity Securities by the Issuer and Affiliated Purchasers Issuer Purchases of Equity Securities The following table sets forth information regarding the ordinary shares repurchased under our share repurchase program during the three months ended December 31, 2022: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of a Publicly Announced Plan (In Thousands) Maximum Value of Shares That May Yet Be Purchased Under the Plan October 1 - October 30, 2022 Share repurchase program (1) 529,319 $ 0.90 529,319 $ 7,330 November 1 - November 30, 2022 Share repurchase program (1) 1,056,776 $ 0.94 1,056,776 $ 6,317 December 1 - December 31, 2022 Share repurchase program (1) 1,162,484 $ 0.80 1,162,484 $ 5,358 Quarter Total Share repurchase program (1) 2,748,579 $ 0.87 2,748,579 $ 5,358 (1) Ordinary Shares were repurchased by us through our publicly announced share repurchase program approved by our Board of Directors on June 2, 2022, and approved by an Israeli court on July 20, 2022.
Removed
The program was scheduled to expire on the earlier of January 20, 2023, or reaching $8.0 million of repurchases. On December 22, 2022, our Board of Directors approved an extension of the repurchase program, with such extension to be in the aggregate amount of up to $5.8 million.
Removed
The extension was approved by an Israeli court on February 9, 2023, and will expire on the earlier of August 9, 2023, or reaching the additional $5.8 million of repurchases of our ordinary shares .
Removed
Repurchases may take place in open market transactions or in privately negotiated transactions and may be made from time to time depending on market conditions, share price, trading volume and other factors our board of directors deems appropriate. Our board of directors may also suspend and/or discontinue the repurchase program at any time, in its sole discretion.
Removed
All repurchases will be made in accordance with all applicable securities laws and regulations. Subsequent to December 31, 2022, an additional 730,350 ordinary shares for an aggregate consideration of $628,477 were repurchased under our share repurchase program during the period from January 1, 2023 to January 20, 2023.
Removed
On December 22, 2022, our Board of Directors approved an extension of the repurchase program, with such extension to be in the aggregate amount of up to $5.8 million.
Removed
The extension was approved by an Israeli court on February 9, 2023, and will expire on the earlier of August 9, 2023, or reaching the additional $5.8 million of repurchases of our ordinary shares. 54 ITEM 6. [RESERVED]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeObligations and Commercial Commitments Set forth below is a summary of our contractual obligations as of December 31, 2022: Payments due by period (in dollars, in thousands ) Contractual obligations Total Less than 1 year 1-3 years Purchase obligations (1) $ 1,935 $ 1,935 $ — Collaboration Agreement and License Agreement obligations (2) 57 57 — Operating lease obligations (3) 1,006 603 403 Total $ 2,998 $ 2,595 $ 403 (1) The Company depends on one contract manufacturer, Sanmina Corporation, for both the ReStore products and the SCI Products.
Biggest changeManagement's Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on February 23, 2023, which is available free of charge on the SECs website at www.sec.gov and at golifeward.com, and is incorporated by reference herein. 69 Obligations and Commercial Commitments Set forth below is a summary of our contractual obligations as of December 31, 2023: Payments due by period (in dollars, in thousands ) Contractual obligations Total Less than 1 year 1-3 years Purchase obligations (1) $ 8,551 $ 8,551 $ — Collaboration Agreement and License Agreement obligations (2) 34 34 — Operating lease obligations (3) 2,050 1,364 686 Earnout liability (4) 3,292 576 2,716 Total $ 13,927 $ 10,525 $ 3,402 (1) We depend on one contract manufacturer, Sanmina Corporation, for both the SCI products and the ReStore Products.
Under the Collaboration Agreement, we were required to pay in quarterly installments the funding of our joint research collaboration with Harvard, subject to a minimum funding commitment under applicable circumstances. Our License Agreement with Harvard consists of patent reimbursement expenses payments and a license upfront fee payment.
(2) Under the Collaboration Agreement, we were required to pay in quarterly installments the funding of our joint research collaboration with Harvard, subject to a minimum funding commitment under applicable circumstances. Our License Agreement with Harvard consists of patent reimbursement expenses payments and a license upfront fee payment.
For sales of Personal systems to end users, and for sales of Personal or Rehabilitation 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.
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.
Our gross profit and gross margin (defined as gross profit as a percentage of revenue) are influenced by a number of factors, including primarily the volume and price of our products sold, fluctuations in the mix of products sold, and variability in our cost of revenue.
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 will continue to be subject to these limitations for the remainder of the 2023 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, 2023, at which time we will be required to re-test our status under these rules.
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, 2024, at which time we will be required to re-test our status under these rules.
As of December 31, 2022, 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.
As of December 31, 2023, 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.
We recognize interest and penalties, if any, related to unrecognized tax benefits in tax expense. 62 Recently Issued and Adopted Accounting Pronouncements A discussion of recent accounting pronouncements is included in Note 2w, New Accounting Pronouncements to our consolidated financial statements in this annual report.
We recognize interest and penalties, if any, related to unrecognized tax benefits in tax expense. 66 Recently Issued and Adopted Accounting Pronouncements A discussion of recent accounting pronouncements is included in Note 2w, New Accounting Pronouncements, to our consolidated financial statements included elsewhere in this annual report.
In such cases we recognize revenue ratably according to the agreed rental monthly fee. For units placed, we transfer control and recognize a sale when title has passed to our customer and rental revenue ratably according to the agreed rental monthly fee. Each unit placed is considered an independent, unbundled performance obligation.
For units placed, we transfer control and recognize a sale when title has passed to our customer and rental revenue ratably according to the agreed rental monthly fee. Each unit placed is considered an independent, unbundled performance obligation.
During the second quarter of 2020, we finalized and moved to implement two separate agreements to distribute additional product lines in the United States. We are 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 the U.S. Department of Veterans Affairs (“VA”) hospitals.
During the second quarter of 2020, we finalized and moved to implement two separate agreements to distribute additional product lines in the United States. We are 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 the Veterans Health Administration (“VHA”) hospitals.
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 and international expansion.
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.
Our revenue is generated 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 and managed care programs, government programs including the VA, and worker’s compensation payments.
Our revenue is generated 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.
Components of Our Statements of Operations Revenue We currently rely, and in the future will rely, on sales and rentals of our ReWalk Personal and ReWalk Rehabilitation Exoskeleton devices, and sales of our ReStore exo-suit device, additional Distributed Products such as the MyoCycle, and related extended service contracts for the SCI Products.
Components of Our Statements of Operations Revenue We currently rely, and in the future will rely, on sales and rentals of our ReWalk Personal and ReWalk Rehabilitation Exoskeleton devices, sales and rentals of our AlterG Anti-Gravity systems and related consumables and services, and sales of our ReStore exo-suit device, additional Distributed Products such as the MyoCycle, and related extended service contracts for the SCI Products.
Improvements may be partially offset by the lower margins we currently expect from ReStore and our Distributed Products as well as due to an increase in material costs.
Improvements may be partially offset by the lower margins we currently expect from ReStore as well as due to an increase in material costs.
Interest expense consists of interest accrued on, and certain other costs with respect to any indebtedness. Foreign currency exchange changes reflect gains or losses related to transactions denominated in currencies other than the U.S. dollar.
Interest income consists of interest earned on our cash and cash equivalent balances. Interest expense consists of interest accrued on, and certain other costs with respect to any indebtedness. Foreign currency exchange changes reflect gains or losses related to transactions denominated in currencies other than the U.S. dollar.
Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on February 24, 2022, which is available free of charge on the SEC's website at www.sec.gov and at www.rewalk.com, and is incorporated by reference herein.
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, 2022, filed with the SEC on February 23, 2023, 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.
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 U.S. Food and Drug Administration (“FDA”) in November 2021.
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.
Research and Development Expense, Net Our research and development expense, net for 2022 and 2021 was as follows (in thousands): Years Ended December 31, 2022 2021 Research and development expense, net $ 4,031 $ 2,939 Research and development expense was $4.0 million in 2022, an increase of $1.1 million, or 37%, during 2022 as compared to 2021.
Research and Development Expense, Net Our research and development expense, net for 2023 and 2022 was as follows (in thousands): Years Ended December 31, 2023 2022 Research and development expense, net $ 4,148 $ 4,031 Research and development expense was $4.1 million in 2023, an increase of $0.1 million, or 3%, during 2023 as compared to 2022.
In the near term our sales and marketing expense are expected to be driven by our efforts expand the reimbursement coverage of our ReWalk Personal device and to support our current commercial product activities.
In the near term our sales and marketing expense are expected to be driven by our efforts to expand the reimbursement coverage of our ReWalk Personal Exoskeleton device, to integrate and unify the combined sales and marketing resources of the ReWalk and AlterG organizations, and to support our current commercial product activities.
Year Ended December 31, 2021 Compared to Year Ended December 31, 2020 A discussion of changes in our results of operations in 2022 compared to 2021 has been omitted from this annual report on Form 10-K but may be found in “Item 7.
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 A discussion of changes in our cash flows in 2022 compared to 2021 has been omitted from this annual report on Form 10-K but may be found in “Part I. Item 7.
The Company has sufficient funds to support its operation for more than 12 months following the approval of our consolidated financial statements for the fiscal year ended December 31, 2022.
We have sufficient funds to support our operation for more than 12 months following the approval of our consolidated financial statements for the fiscal year ended December 31, 2023.
Taxes on Income As of December 31, 2022, we had not yet generated taxable income in Israel. As of that date, our net operating loss carry forwards for Israeli tax purposes amounted to approximately $220.9 million.
Taxes on Income As of December 31, 2023, 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 $242.6 million.
We refer to the MediTouch and MyoCycle devices as our “Distributed Products.” 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.
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.
We have offices in Marlborough, Massachusetts, Berlin, Germany and Yokneam, Israel, from where we operate our business. We have in the past generated and expect to generate in the future revenue from a combination of third-party payors (including private and government payors) and self-pay individuals.
We have primary offices in Marlborough, Massachusetts, Fremont, California, Berlin, Germany and Yokneam, Israel, from where we operate our business. 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.
Therefore, we recognize revenue for the system and training only after delivery, in accordance with the agreement delivery terms, to the customer and after the training has been completed, once all other revenue recognition criteria have been met.
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.
At the time of filing our annual report for the year ended December 31, 2022, on February 23, 2023, 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.
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 have sought to expand our product offerings beyond the SCI Products through internal development and distribution agreements. 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.
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.
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 related activities, travel, marketing, advertisement, tradeshows and conferences, lobbying, and public relations activities.
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 related activities, travel, marketing, advertisement, tradeshows and conferences, lobbying, and public relations activities.
General and Administrative Expense Our general and administrative expense for 2022 and 2021 was as follows (in thousands): Years Ended December 31, 2022 2021 General and administrative $ 7,134 $ 5,626 General and administrative expense was $7.1 million, an increase of $1.5 million, or 27%, during 2022 as compared to 2021.
General and Administrative Expense Our general and administrative expense for 2023 and 2022 was as follows (in thousands): Years Ended December 31, 2023 2021 General and administrative $ 9,995 $ 7,134 General and administrative expense was $10.0 million, an increase of $2.9 million, or 40%, during 2023 as compared to 2022.
All product development milestones contemplated by the License Agreement have been met as of December 31, 2022; however, there are still outstanding commercialization milestones under the License Agreement that depend on us reaching certain sales amounts, some or all of which may not occur. (3) Our operating leases consist of leases for our facilities and motor vehicles.
All product development milestones contemplated by the License Agreement have been met as of December 31, 2023; however, there are still outstanding commercialization milestones under the License Agreement that depend on us reaching certain sales amounts, some or all of which may not occur. Our Collaboration Agreement with Harvard was concluded on March 31, 2022.
Our anticipated primary uses of cash are funding (i) sales, marketing, and promotion activities related to market development for our ReWalk Personal and ReWalk Rehabilitation Exoskeleton devices and other product lines added through distribution agreements; (ii) payor education activities to establish or broaden coverage by third-party payors and CMS for our ReWalk Personal Exoskeleton device; (iii) development of our lightweight exo-suit technology for potential home personal health utilization for multiple indications and future generation designs for our exoskeleton device; (iv) routine product updates; (v) general corporate purposes, including working capital needs; (vi) share repurchase programs; and (vii) potential acquisitions of businesses.
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.
We intend to focus our research and development expenses mainly on our current products maintenance and improvement as well as in support of the FDA submission for clearance of the stair walking capability of the ReWalk 6.0 and in support of the FDA submission for clearance of the ReWalk 7.0 next generation model.
We intend to focus the rest of our research and development expenses mainly on our current product support, as well as to advance the FDA submission for clearance of the ReWalk 7 next-generation exoskeleton model.
See Note 2 to our audited 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.
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 that were impacted by the estimates, judgments and assumptions used in the preparation of our consolidated financial statements are discussed below.
Grants and Other Funding Israel Innovation Authority (formerly known as the Office of the Chief Scientist) From our inception through December 31, 2022, we have received a total of $2.3 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 $309 thousand was received without future obligation.
As a result, our effective tax rate will be a function of the relative proportion of our taxable income that is generated in those locations compared to our overall net income. 61 Grants and Other Funding Israel Innovation Authority (formerly known as the Office of the Chief Scientist) From our inception through December 31, 2023, we have received a total of $2.6 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 $570 thousand was received without future obligation.
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 VA policy that was issued in December 2015 for the evaluation, training, and procurement of ReWalk Personal exoskeleton systems for all qualifying veterans suffering from spinal cord injury (“SCI”) across the United States. 55 We have also been pursuing updates with the Centers for Medicare and Medicaid Services (“CMS”), to clarify the Medicare coverage category (i.e., benefit category) applicable for personal exoskeletons.
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.
In July 2020, following a successful submission and hearing process, a code was issued for ReWalk Personal Exoskeleton (effective October 1, 2020), which may be used for purposes of claim submission to Medicare, Medicaid, and other payors. We are currently seeking a nationwide Medicare benefit category determination from CMS to designate the relevant Medicare benefit category.
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.
As of December 31, 2022, we received a total of 9,814,754 outstanding warrants exercises with exercise prices ranging from $1.25 to $1.79 were exercised, for total gross proceeds of approximately $13.8 million.
As of December 31, 2023, warrants to purchase a total of 9,814,754 ordinary shares with exercise prices ranging from $1.25 to $1.79 were exercised, for total gross proceeds of approximately $13.8 million. During the twelve months that ended December 31, 2023, no warrants were exercised.
On February 19, 2021, the Company entered into a purchase agreement with certain institutional and other accredited investors for the issuance and sale of 10,921,502 ordinary shares, par value NIS 0.25 per share at $3.6625 per ordinary share and warrants to purchase up to an aggregate of 5,460,751 ordinary shares with an exercise price of $3.6 per share, exercisable from February 19, 2021, until August 26, 2026.
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. 67 Equity Offerings and Warrant Exercises On February 19, 2021, the Company entered into a purchase agreement with certain institutional and other accredited investors for the issuance and sale of 10,921,502 ordinary shares, par value NIS 0.25 per share at $3.6625 per ordinary share and warrants to purchase up to an aggregate of 5,460,751 ordinary shares with an exercise price of $3.60 per share, exercisable from February 19, 2021, until August 26, 2026.
The critical accounting policies that were impacted by the estimates, judgments and assumptions used in the preparation of our consolidated financial statements are discussed below. 60 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 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.
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 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.
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.
Cost of Revenue and Gross Profit Cost of revenue consists primarily of systems purchased from our outsourced manufacturer, Sanmina. Cost of revenue also includes internal costs such as salaries and related personnel costs including non-cash share-based compensation, manufacturing and inventory management, training and inspection, warranty and service activities, freight costs, and reserves for excess and obsolete inventory, when necessary.
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.
In 2021, the National Spinal Cord Injury Statistical Center (“NSCISC”) reported the Medicare and Medicaid are the primary payors for approximately 56% of the spinal cord injury population which are at least five years post their injury date.
In 2022, the National Spinal Cord Injury Statistical Center (“NSCISC”) 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.
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 3.519:$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:$1.07, both of which were the applicable exchange rates as of December 31, 2022.
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 3.627:$1.00, of which were the applicable exchange rate as of December 31, 2023. Off-Balance Sheet Arrangements We had no off-balance sheet arrangements or guarantees of third-party obligations during the periods presented.
Cash Flows Years Ended December 31, 2022 2021 2020 Net cash used in operating activities $ (17,891 ) $ (11,469 ) $ (12,589 ) Net cash used in investing activities (25 ) (47 ) (73 ) Net cash (used in) provided by financing activities (2,500 ) 79,512 16,724 Effect of Exchange rate changes on Cash, Cash Equivalents and Restricted Cash (79 ) — — Net cash flow $ (20,495 ) $ 67,996 $ 4,062 Year Ended December 31, 2022 to Year Ended December 31, 2021 Net Cash Used in Operating Activities Net cash used in operating activities was $17.9 million in 2022, an increase of $6.4 million as compared to 2021 mainly due to lower revenue collection, higher consulting, professional services expenses and personnel and personnel related expenses.
Cash Flows Years Ended December 31, 2023 2022 2021 Net cash used in operating activities $ (20,667 ) $ (17,891 ) $ (11,469 ) Net cash used in investing activities (18,149 ) (25 ) (47 ) Net cash (used in) provided by financing activities (992 ) (2,500 ) 79,512 Effect of Exchange rate changes on Cash, Cash Equivalents and Restricted Cash 45 (79 ) — Net cash flow $ (39,763 ) $ (20,495 ) $ 67,996 68 Year Ended December 31, 2023 to Year Ended December 31, 2022 Net Cash Used in Operating Activities Net cash used in operating activities was $20.7 million in 2023, an increase of $2.8 million as compared to 2022 mainly due to higher consulting and professional services fees primarily associated with the acquisition of AlterG and the CMS reimbursement process, as well as increased inventory purchases.
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, 2022 Compared to Year Ended December 31, 2021 Revenue Our revenue for 2022 and 2021 were as follows (dollars in thousands, except unit amounts) Years Ended December 31, 2022 2021 Personal unit revenue $ 4,762 $ 4,820 Rehabilitation unit revenue $ 749 $ 1,146 Revenue $ 5,511 $ 5,966 Personal unit revenue consists of ReWalk Personal Exoskeleton and Distributed Products sale, rental, service, and warranty revenue for individual use.
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, 2023 Compared to Year Ended December 31, 2022 Revenue Our revenue for 2023 and 2022 were as follows (dollars in thousands, except unit amounts): Years Ended December 31, 2023 2022 Revenue $ 13,854 $ 5,511 Revenues consist of SCI Products, AlterG Anti-Gravity systems, ReStore and Distributed Products. 62 Revenue was $13.9 million, an increase of $8.3 million, or 51%, during 2023 as compared to 2022.
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 the ability to stand and walk again during everyday activities at home or in the 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.
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.
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.
For the full year ended December 31, 2022, the Company incurred a consolidated net loss of $19.6 million and has an accumulated deficit in the total amount of $213.8 million. Our cash and cash equivalent on December 31, 2022, totaled $67.9 million. The Company’s negative operating cash flow for the full year ended December 31, 2022, was $17.9 million.
For the full year ended December 31, 2023, we incurred a consolidated net loss of $22.1 million and had an accumulated deficit in the total amount of $235.9 million. Our cash and cash equivalents on December 31, 2023, totalled $28.1 million. Our negative operating cash flow for the full year ended December 31, 2023, was $20.7 million.
We expect 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. 56 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 to product design and development, clinical studies, regulatory submissions, patent costs, sponsored research and other related activities.
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 to 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.
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.
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.
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.
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 Expenses (Income), Net Financial income and expenses consist of bank commissions, foreign exchange gains and losses, interest earned on investments in short term deposits and royalty income.
In the future we expect our growth to be driven by sales of our ReWalk Personal device through expansion of coverage and reimbursement by commercial and government third-party payors, as well as sales of Distributed Products and the ReStore device to rehabilitation clinics and personal users. 58 Gross Profit Our gross profit for 2022 and 2021 were as follows (in thousands): Years Ended December 31, 2022 2021 Gross profit $ 1,905 $ 2,903 Gross profit was $1.9 million, or 35% of revenue, for 2022, as compared to a gross profit of $2.9 million, or 49% of revenue for 2021.
In the future, we expect our growth to be driven by sales of our ReWalk Personal device through expansion of coverage and reimbursement by commercial and government third-party payors, and our AlterG Anti-Gravity systems, as well as sales of Distributed Products, and the ReStore device to rehabilitation clinics and personal users.
Allocate the transaction price to performance obligations in the contract 5. Recognize revenue when or as the Company satisfies a performance obligation Provisions are made at the time of revenue recognition for any applicable warranty cost expected to be incurred.
Provisions are made at the time of revenue recognition for any applicable warranty cost expected to be incurred.
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, the Company applies 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.
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.
In July 2022, we announced that we had received approval from an Israeli court for the share repurchase program, valid through January 20, 2023. On December 19, 2022, our board of directors approved the extension of our on-going share repurchase program, with such extension to be in the aggregate amount of up to $5.8 million.
The program was scheduled to expire on the earlier of January 20, 2023, or reaching $8.0 million of repurchases. On December 22, 2022, our board of directors approved an extension of the repurchase program, with such extension to be in the aggregate amount of up to $5.8 million.
We previously received grants and other funding from the Israel Innovation Authority, (formerly known as the Office of the Chief Scientist) (“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.
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.
Further investment in the development path of the ReBoot has been temporarily paused in 2023 pending further determination about the clinical and commercial opportunity of this device. Our principal markets are the United States and Europe. In Europe, we have a direct sales operation in Germany and work with distribution partners in certain other major countries.
Further investment in the development path of the ReBoot was paused in 2023 pending determination regarding the clinical and commercial opportunity of this device. Our principal markets are primarily in the United States and Europe with some lesser sales in Asia, the Middle East and South America.
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. 67
Trend Information For information on significant known trends, please see “Part I-Item 1. “Business – Overview” in this annual report. 70
CMS has stated that, until a nationwide benefit category determination is issued, coverage and payment can be adjudicated on a case-by-case basis by the Medicare Administrative contractors (“MACs”). In Germany, we continue to make progress toward achieving coverage from the various government, private and worker’s compensation payors for our SCI products.
A final Medicare payment determination is expected from CMS in first quarter of 2024 with an April 1, 2024, effective date. In Germany, we continue to make progress toward achieving coverage from the various government, private and worker’s compensation payors for our SCI products.
Sales and Marketing Expenses Our sales and marketing expense for 2022 and 2021 was as follows (in thousands): Years Ended December 31, 2022 2021 Sales and marketing expense $ 9,842 $ 6,993 Sales and marketing expense was $9.8 million in 2022, an increase of $2.8 million, or 41%, during 2022 as compared to 2021.
Financial income, net Our financial income, net for 2023 and 2022 was as follows (in thousands): Years Ended December 31, 2023 2022 Financial income, net $ 1,467 $ *) Financial income, net, reflects an increase in financial income of $1.5 million during 2023 as compared to 2022.
Accordingly, we consider all the distributors as end-users. The Company generally does not grant a right of return for its products. In rare circumstances the Company provides a right of return of its products. In those cases, the Company records reductions to revenue for expected future product returns based on the Company’s historical experience and estimates.
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. 65 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.
The VA policy is the first national coverage policy in the United States for qualifying individuals who have suffered spinal cord injury. ReWalk Personal and ReWalk Rehabilitation systems are generally covered by a five-year warranty from the date of purchase, which is included in the purchase price.
In December 2015, the VHA issued a national policy for the evaluation, training, and procurement of ReWalk Personal Exoskeleton systems for all qualifying veterans across the United States. The VHA policy is the first national coverage policy in the United States for qualifying individuals who have suffered spinal cord injury.
The warranty covers all elements of the systems, including the batteries, other than normal wear and tear. Our ReStore device is sold with a two-year warranty. Warranties for our Distributed Products warranty range between one year to ten years depending on the specific product and part.
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. Warranties for our Distributed Products range between three years to ten years depending on the specific product and part and are the responsibility of the manufacturers.
We expect that third-party payors will be an increasingly important source of revenue in the future as we seek to clarify the Medicare coverage category (i.e., benefit category) applicable for personal exoskeletons. In December 2015, the VA issued a national policy for the evaluation, training, and procurement of ReWalk Personal exoskeleton systems for all qualifying veterans across the United States.
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 anticipated pricing.
Net Cash Provided by Financing Activities Net cash (used in) provided by financing activities was a cash use of $2.5 million in 2022, a decrease of $82 million, as compared to cash provided of $79.5 million in 2021.
Net Cash Used in Investing Activities Net cash used in investing activities increased to $18.1 million in 2023 as compared to $0.03 million in 2022, primarily due to the acquisition of AlterG. Net Cash Used in Financing Activities Net cash used in financing activities was $0.9 million in 2023, a decrease of $1.5 million, as compared to 2022.
During the twelve months that ended December 31, 2022, no warrants were exercised. 65 Share Repurchase Program In June 2022, we announced that our Board approved a program to repurchase up to $8.0 million of our ordinary shares, par value NIS 0.25 per share, subject to receipt of Israeli court approval.
Share Repurchase Program On June 2, 2022, our board of directors approved a share repurchase program to repurchase up to $8.0 million of our ordinary shares . On July 21, 2022, we received approval from an Israeli court for the share repurchase program.
The increase was driven by higher consulting expenses related to CMS reimbursement progress, an increase in tradeshow and travel expenses since Covid-19 restrictions are being lifted and personnel and personnel-related expenses.
The remaining increase was primarily driven by higher consulting expenses related to the CMS reimbursement process and market access initiatives.
The extension was approved by an Israeli court on February 9, 2023, and will expire on the earlier of August 9, 2023, or reaching the additional $5.8 million of repurchases of our ordinary shares .
The extension was approved by an Israeli court on February 9, 2023, and it expired on August 9, 2023. As of December 31, 2023, pursuant to the share repurchase program, we had repurchased a total of 4,022,607 of our outstanding ordinary shares at a total cost of $3.5 million.
The Distributed Products are sold with assurance type warranty ranging from between one year to ten years, depending on the specific product and part. The Company also offers a rent-to-purchase option for its ReWalk Personal device. Those transactions provide potential customers the option to use the device for a short term, after which they can choose whether to purchase it.
The Distributed Products are sold with an assurance type warranty ranging from between three years to ten years, depending on the specific part. The AlterG Anti-Gravity systems are sold with a one-year assurance type warranty for parts and labor in the US and with a two-year assurance type warranty for parts for distributors.
Our taxable income generated outside of Israel will be subject to the regular corporate tax rate in the applicable jurisdictions. As a result, our effective tax rate will be a function of the relative proportion of our taxable income that is generated in those locations compared to our overall net income.
AlterG had federal net operating loss carry forwards totalling $31.4 million and state net operating loss carry forwards of $47.2 million, set to expire in 2025 and 2028, respectively. Our taxable income generated outside of Israel will be subject to the regular corporate tax rate in the applicable jurisdictions.
The decline was a result of a share repurchase plan that was initiated in the second half of 2022, while in 2021 the source of cash consisted primarily of proceeds from the issuance of common stock and warrants, as well as the exercise of warrants issued in prior years. 66 Year Ended December 31, 2021 Compared to Year Ended December 31, 2020 A discussion of changes in our cash flows in 2021 compared to 2020 has been omitted from this annual report on Form 10-K but may be found in “Item 7.
Income Tax Our income tax for 2023 and 2022 was as follows (in thousands): Years Ended December 31, 2023 2022 Taxes on income (benefit) $ (12 ) $ 467 Income tax decreased by $0.5 million during 2023 as compared to 2022, mainly due to the utilization of net operation losses forward arising from the acquisition of AlterG. 64 Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 A discussion of changes in our results of operations in 2022 compared to 2021 has been omitted from this annual report on Form 10-K but may be found in “Part I.
The cost of revenue also includes royalties and expenses related to royalty-bearing research and development grants.
The cost of revenue also includes royalties and expenses related to royalty-bearing research and development grants. 60 For our AlterG systems, which we manufacture ourselves at our facility in Fremont, California, cost of revenue consists primarily of raw materials, direct labor, indirect labor, and other factory overhead costs such as rent and utilities.
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Risk Factors.” Overview We are a medical device company that is designing, developing, and commercializing innovative technologies that enable mobility and wellness in rehabilitation and daily life for individuals with neurological conditions. Our initial product offerings were the ReWalk Personal and ReWalk Rehabilitation Exoskeleton devices for individuals with spinal cord injury (“SCI Products”).
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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.
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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.
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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.
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Financial Expenses (Income), Net Financial income and expenses consist of bank commissions, foreign exchange gains and losses, interest earned on investments in short term deposits, interest expenses related to the Loan Agreement (as defined below) with Kreos (as defined below). Interest income consists of interest earned on our cash and cash equivalent balances.
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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 United States (U.S.).
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On December 30, 2015, we entered into a Loan Agreement (the “Loan Agreement”) with Kreos Capital V (Expert Fund) Limited (“Kreos”) pursuant to which Kreos extended a line of credit to us in the amount of $20.0 million.
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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.
Removed
In connection with the Loan Agreement, we issued to Kreos a warrant to purchase up to 4,771 of our ordinary shares at an exercise price of $241.00 as we drew down $12.0 million under the Loan Agreement, which amount was increased to 6,679 ordinary shares upon an additional drawdown of $8.0 million.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+0 added−0 removed2 unchanged
Biggest changeDollar (%) 2022 3.70 10.84 2021 (6.38 ) 3.46 2020 3.76 2.07 The figures above represent the change in the average exchange rate in the given period compared to the average exchange rate in the immediately preceding period. Negative figures represent the devaluation of the U.S. dollar compared to the NIS or the euro.
Biggest changeDollar (%) 2023 (9.00 ) 2.67 2022 3.70 10.84 2021 (6.38 ) 3.46 The figures above represent the change in the average exchange rate in the given period compared to the average exchange rate in the immediately preceding period. Negative figures represent the devaluation of the U.S. dollar compared to the NIS or the euro.
Accordingly, changes in the value of the NIS and Euro relative to the U.S. dollar in each of the years 2022, 2021, and 2020 impacted amounts recorded on our consolidated statements of operations for these periods. We expect that the denominations of our revenue and expenses in 2023 will be consistent with what we experienced in 2022.
Accordingly, changes in the value of the NIS and Euro relative to the U.S. dollar in each of the years 2023, 2022, and 2021 impacted amounts recorded on our consolidated statements of operations for these periods. We expect that the denominations of our revenue and expenses in 2024 will be consistent with what we experienced in 2023.
Other Market Risks We do not believe that we have material exposure to interest rate risks or to inflationary risks. 68
Other Market Risks We do not believe that we have material exposure to interest rate risks or to inflationary risks.
The following table presents information about the devaluation in the exchange rates of the NIS and euro against the U.S. dollar in 2022, 2021 and 2020: Change in Average Exchange Rate Period NIS against the U.S. Dollar (%) Euro against the U.S.
The following table presents information about the devaluation in the exchange rates of the NIS and euro against the U.S. dollar in 2023, 2022 and 2021: Change in Average Exchange Rate Period NIS against the U.S. Dollar (%) Euro against the U.S.
A 10% increase or decrease in the value of the NIS against the U.S. dollar would have decreased or increased our net loss by approximately $429 thousand in 2022. A 10% increase or decrease in the value of the euro against the U.S. dollar would have decreased or increased our net loss by approximately $13 thousand in 2022.
A 10% increase or decrease in the value of the NIS against the U.S. dollar would have decreased or increased our net loss by approximately $513 thousand in 2023. A 10% increase or decrease in the value of the euro against the U.S. dollar would have decreased or increased our net loss by approximately $14 thousand in 2023.

Other LFWD 10-K year-over-year comparisons