Business context and reporting period
ReWalk Robotics Ltd. (the filing issuer identified in the request as Lifeward Ltd.) filed this unaudited Form 10-Q for the quarter ended June 30, 2023. The company develops and sells mobility and rehabilitation medical devices, including ReWalk exoskeletons, ReStore exo-suits and distributed products. Unless stated otherwise, financial amounts below are in U.S. dollars.
Financial performance and position
| Metric | Q2 2023 | Q2 2022 | Six months 2023 | Six months 2022 |
|---|---|---|---|---|
| Revenue | $1.337m | $1.570m | $2.567m | $2.446m |
| Gross profit / margin | $0.576m / 43% | $0.746m / 48% | $1.147m / 45% | $1.011m / 41% |
| Operating expenses | $5.734m | $5.122m | $10.680m | $9.675m |
| Operating loss | $5.158m | $4.376m | $9.533m | $8.664m |
| Net loss | $4.642m | $4.446m | $8.963m | $8.796m |
| Net loss per share | $0.08 | $0.07 | $0.15 | $0.14 |
- Six-month operating cash use was $8.739m, versus $9.377m a year earlier. Investing cash use was nil; financing cash use was $0.986m, primarily share repurchases. Cash, cash equivalents and restricted cash declined $9.720m to $58.835m; cash and cash equivalents alone were $58.184m at June 30.
- At June 30, current assets were $63.842m and current liabilities $5.442m. Total liabilities were $6.837m, including operating lease liabilities; the balance sheet reports no borrowings. Shareholders’ equity was $58.974m.
- The company reported $1.8m of non-cancelable purchase commitments and $1.3m of future lease payments. It had an accumulated deficit of $222.7m.
Material changes versus prior comparable periods
- Q2 revenue fell 15% year over year, attributed mainly to fewer ReWalk Personal 6.0 units sold in the U.S. and Europe. First-half revenue rose 5%, supported by U.S. sales of ReWalk Personal and MyoCycle.
- Q2 gross margin declined about 4.4 percentage points, with lower unit volume and average selling price/mix cited. First-half margin improved to 45% from 41%, mainly on volume and sales mix in Q1.
- First-half operating expenses increased $1.005m: lower R&D spending was more than offset by higher sales and marketing and general and administrative costs. G&A growth included payroll and acquisition-related professional fees.
- Net loss increased modestly in both Q2 and the first half, despite higher financial income, primarily interest earned on cash balances.
- The company repurchased about 4.0m shares for approximately $3.5m cumulatively through June 30. The repurchase program expired August 9, 2023; no post-quarter repurchases were reported.
Outlook, commentary and risks
- Management said available funds were sufficient to support operations for more than 12 months after issuance of the interim statements. It expects continuing losses and said additional capital may be needed until profitability or positive operating cash flow is achieved; future financing is not assured.
- No quantitative revenue or earnings guidance was provided. Management expects growth to depend on commercial sales and expanded third-party reimbursement. It expects scale could improve margins, but cited potentially lower margins for ReStore and distributed products and higher material costs as offsets.
- In March 2023, the FDA cleared stairs and curbs functionality for ReWalk Personal 6.0. CMS proposed including personal exoskeletons in the Medicare brace benefit category; this was a proposal, not a finalized coverage determination. Coverage remained case-by-case pending a nationwide determination.
- Development investment in the ReBoot home-use exo-suit was temporarily paused in 2023 pending further assessment of clinical and commercial opportunity. R&D focus included current products and FDA submission support for the next-generation ReWalk 7.
- On August 8, 2023, the company agreed to acquire AlterG for approximately $19m cash, subject to customary adjustments and closing conditions, plus potential revenue-growth earnouts. Closing was expected August 11; the filing does not establish that closing occurred. Integration, transaction execution and expected benefits are risks.
- Other notable exposures include reliance on one contract manufacturer for SCI and ReStore products; reimbursement and market-acceptance uncertainty; customer concentration; potential need for further financing; and contingent IIA royalties of $1.6m payable based on applicable product sales. The company also disclosed ordinary-course legal matters, but no other material litigation was identified.
Investor verification priorities
- Confirm AlterG’s closing, final cash consideration, any earnout terms and integration progress.
- Track CMS’s final rule and actual Medicare coverage/payment outcomes, alongside reimbursement decisions in the U.S. and Europe.
- Verify unit volumes, product mix, average selling prices and whether gross-margin improvement persists.
- Monitor operating cash burn, cash runway and any new financing or share issuance; assess the substantial warrant overhang disclosed in the filing.
- Assess customer and contract-manufacturer concentration, purchase commitments, and the commercial rationale for the ReBoot pause and MediTouch termination.