LFWD

Business Context and Reporting Period

Company: Lifeward Ltd. (formerly ReWalk Robotics Ltd.)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended December 31, 2025
Business Overview: Lifeward is a medical device company focused on physical rehabilitation and recovery. Its primary products include the ReWalk Personal and Rehabilitation Exoskeletons for spinal cord injury (SCI) patients, AlterG Anti-Gravity systems for rehabilitation, and the ReStore Exo-Suit (sales in EU ceased May 2024). The company operates as a single reporting unit with principal markets in the United States and Europe.

Key Financial Metrics

Note: All share and per-share data have been retroactively adjusted for a 1-for-12 reverse share split effective February 24, 2026.

Material Changes vs. Prior Period

• Revenue Decline: Revenue decreased 14% to $22.0 million, driven primarily by a $3.0 million reduction in AlterG sales due to lower international demand and decreased MyoCycle revenue.
• Margin Expansion: Gross margin improved to 38% from 32%, largely due to the absence of $1.5 million in amortization and $1.2 million in restructuring expenses recognized in 2024. Excluding these items, gross profit decreased year-over-year due to lower sales volume and inventory write-downs.
• Impairment Charges: The company recorded a $2.8 million goodwill impairment charge in 2025 (vs. $9.8 million in 2024) triggered by a sustained decline in share price.
• Operating Expenses:
  • R&D: Decreased 30% to $3.2 million as development for ReWalk 7 and NEO products was substantially completed.
  • Sales & Marketing: Decreased 23% to $13.9 million due to lower headcount, reduced travel, and the absence of prior-year amortization.
  • G&A: Increased 58% to $8.2 million, primarily due to restructuring costs related to the departure of the former CEO and transaction costs associated with the Oramed deal.
• Manufacturing Transition: In Q2 2025, the company transitioned ReWalk manufacturing from a contract manufacturer (Sanmina) to in-house production in Israel to reduce costs and improve quality control.

Guidance, Outlook, Risks, and Unusual Items

Going Concern Warning

Management has concluded there is substantial doubt about the company's ability to continue as a going concern for the next 12 months. This is due to recurring losses, negative operating cash flows, and an accumulated deficit of $284.7 million. The company requires additional financing to meet obligations.

Strategic Transactions and Financing

• Oramed Transaction: In January 2026, Lifeward entered into a Share Purchase Agreement to acquire Oratech Pharma (a subsidiary of Oramed). Upon closing, Oramed would receive up to 49.99% of fully diluted equity. The transaction includes a revenue-sharing agreement (4% of net ReWalk revenues) and a potential $20 million senior secured convertible note facility. Shareholders approved the transaction on March 12, 2026.
• Bridge Financing: The company secured a $3.0 million secured promissory note from Oramed in November 2025 (15% interest) and an additional $1.025 million note in early 2026 (24% interest).
• Equity Raises: In 2025, the company raised approximately $7.5 million through a registered direct offering, an at-the-market (ATM) program, and a public offering.

Key Risks

• Liquidity: Insufficient funds to meet future operating needs without additional capital raising, which may result in dilution or restrictive covenants.
• Reimbursement: Reliance on third-party payors (Medicare, private insurers, VHA). While CMS established a fee schedule for ReWalk ($91,032 in 2024), broad uniform coverage does not exist, and reimbursement is often case-by-case.
• Geopolitical: Operations in Israel are subject to risks from regional conflicts (Israel-Hamas-Hezbollah, Iran tensions), which could disrupt manufacturing, supply chains, and employee availability.
• Regulatory: Dependence on FDA and CE mark clearances. The ReStore product sales in the EU ceased in May 2024 due to lack of MDR conformity.

Investor Verification Checklist

• Closing of Oramed Transaction: Verify if the acquisition of Oratech and the associated $20 million financing facility have closed, as this is critical for liquidity.
• Reimbursement Progress: Monitor the volume of Medicare claims approved under the new fee schedule and the status of pending insurance cases in Germany (49 cases pending as of Dec 31, 2025).
• Manufacturing Efficiency: Assess whether the transition to in-house ReWalk manufacturing has resulted in the projected cost savings and gross margin improvements.
• Cash Burn Rate: Track monthly cash burn against the $2.2 million cash balance to determine the runway before additional capital is required.
• Geopolitical Impact: Monitor any disruptions to the Israel-based manufacturing facility or supply chain due to ongoing regional conflicts.