Lifeward Ltd. (formerly ReWalk Robotics Ltd.) — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023; this is an annual report, not a standalone fourth-quarter report. The company began doing business as Lifeward on January 29, 2024; its Nasdaq ticker changed to LFWD in January 2024.
Business context
Lifeward develops and sells rehabilitation and mobility medical devices, including ReWalk exoskeletons for spinal cord injury, the ReStore stroke-rehabilitation exo-suit, and AlterG anti-gravity systems. It acquired AlterG on August 11, 2023, adding a broader rehabilitation product line and commercial infrastructure. The acquisition is reflected in results only from the closing date.
Financial highlights
| Metric | FY2023 | FY2022 |
|---|---|---|
| Revenue | $13.854 million | $5.511 million |
| Gross profit / margin | $4.453 million / 32% | $1.905 million / 35% |
| Operating loss | $23.612 million | $19.102 million |
| Net loss | $22.133 million | $19.569 million |
| Net loss per share, basic and diluted | $0.37 | $0.31 |
| Cash used in operating activities | $20.667 million | $17.891 million |
Revenue increased 151% year over year. AlterG contributed $7.7 million of the increase; the remaining increase was mainly higher ReWalk Personal Exoskeleton and MyoCycle revenue. The filing’s recent-developments section calls the increase 151%, while one MD&A sentence says 51%; the reported revenue figures support 151%.
Reported gross margin declined to 32% from 35%, including $1.5 million of AlterG-related intangible-asset amortization and purchase-accounting inventory adjustments. Excluding those items, management reported 2023 gross profit of $2.4 million and a 38% margin for the legacy business, versus 35% in 2022.
Cash and cash equivalents were $28.083 million at year-end, down from $67.896 million. Total assets were $63.192 million and total liabilities were $16.682 million. The filing reports no debt; liabilities include lease obligations and the AlterG earnout. Current assets were $39.222 million and current liabilities were $11.795 million. Net cash used in investing activities was $18.149 million, primarily for the AlterG acquisition; financing activities used $0.992 million, primarily for share repurchases.
Management reported an accumulated deficit of $235.9 million and said cash was expected to fund planned operations for more than 12 months after financial-statement approval. The company expects future losses and may need additional capital before reaching profitability or positive operating cash flow.
Material changes and unusual items
- AlterG acquisition: Total consideration was $22.1 million, comprising approximately $18.5 million cash paid and a $3.6 million acquisition-date earnout valuation. Year-end earnout liability was $3.292 million. AlterG contributed $7.658 million of revenue from acquisition through year-end.
- Expenses: Operating expenses rose to $28.065 million from $21.007 million. General and administrative costs included $2.5 million of acquisition-related expenses. Sales and marketing costs also reflected AlterG integration, acquired-asset amortization, and higher CMS reimbursement and market-access consulting costs.
- Restructuring: A reorganization approved in December 2023 included a workforce reduction of approximately 15%. The company recorded $670,000 in one-time termination and legal costs; none had been paid by year-end. Management did not expect additional costs related to the plan.
- Share repurchases: The company had repurchased 4.023 million shares for a total cost of $3.5 million by year-end. The program expired in August 2023.
Outlook, risks and contingencies
No quantified revenue, profit, or cash-flow guidance is provided. Management expects growth from ReWalk sales as reimbursement expands, AlterG systems, and other commercial products. It planned to introduce a lower-cost AlterG model in 2024 and continue development work on ReWalk 7; further ReBoot development was paused in 2023 pending assessment of its clinical and commercial opportunity.
CMS confirmed that personal exoskeletons fall within the Medicare brace benefit category for claims dated on or after January 1, 2024. CMS’s preliminary payment determination for ReWalk under code K1007 was $94,617, based on older market data; the final determination was expected in the first quarter of 2024, with an April 1, 2024 effective date. The final rate and resulting coverage or sales impact were not established in this filing. Lifeward reported its first paid Medicare claim in December 2023.
- Nasdaq listing: The company had not regained the $1.00 minimum bid-price requirement. It received an extension through March 30, 2024, to regain compliance; failure could result in delisting. A reverse share split remained a possible compliance measure.
- Liquidity and financing: Continued losses and negative operating cash flow may require additional financing, potentially dilutive or on restrictive terms. The filing states the company was subject to Form S-3 public-float offering limits.
- Commercial and reimbursement risk: Broad U.S. private-payor coverage for exoskeletons is not established. Medicare’s final payment amount, payer decisions, clinical evidence, and customer adoption remain important uncertainties.
- Operations and supply: Sanmina manufactures ReWalk and ReStore products at one facility in northern Israel. The filing cites the Israel conflict, potential employee mobilization, supply-chain reliance, and Taiwan-related geopolitical risks as possible disruptions.
- Other exposures: Product safety and liability, regulatory compliance, acquisition integration, competition, currency movements, and potential dilution from outstanding warrants are identified risks. The company reported no material cybersecurity incident and no legal matter it believed would materially affect results, liquidity, or financial condition; actual legal outcomes could differ.
The independent auditor issued an unqualified opinion on the consolidated financial statements. Management concluded internal control over financial reporting was effective, but excluded AlterG from its assessment because of the timing of the acquisition; the auditor did not provide an internal-control attestation.
Important facts for investors to verify
- Final CMS K1007 reimbursement determination and actual Medicare coverage, payment, and unit sales after its effective date.
- AlterG’s post-acquisition growth, margins, integration results, earnout exposure, and the final purchase-price allocation.
- Cash burn, financing needs, and whether the stated more-than-12-month liquidity outlook remains supportable.
- Nasdaq bid-price compliance and any reverse-split or delisting developments.
- Whether gross margin improves as acquisition accounting effects roll off, and whether restructuring and integration deliver expected cost benefits.
- Potential dilution: the filing reported 19.187 million outstanding warrants at December 31, 2023.