Group 1 - Chengdu's humanoid robot innovation center has developed the first domestic robot task execution system (R-WMES) based on a world model, marking a significant milestone in intelligent humanoid robot capabilities [2] - The world model framework mimics human brain thinking by learning physical and causal laws from the real world, enabling robots to autonomously plan and execute tasks based on target images [2] - The R-WMES system demonstrates strong adaptability and task completion in unfamiliar environments, addressing the intelligence gap in humanoid robots and accelerating their practical and commercial application [2] Group 2 - The Ministry of Industry and Information Technology (MIIT) stated that China has established a complete manufacturing capability for humanoid robots, covering key chips, components, and complete machines [5] - Since the 14th Five-Year Plan, 46 cities have been supported in new technology transformation pilot projects, resulting in over 230 excellent smart factories and 1,260 5G factories [5] - China's industrial robot installation accounted for over 50% of the global total, with significant improvements in energy consumption efficiency for products like steel and cement [5] Group 3 - Xingyuan Intelligent, a company focused on embodied intelligence, has completed a 200 million RMB angel round of financing to accelerate the development and commercialization of its embodied brain technology [6] - The company was incubated by the Beijing Academy of Artificial Intelligence and aims to create a universal embodied brain for the physical world, leveraging a team of top talents in the field [6] - The founding team includes experienced professionals from leading companies, establishing a closed-loop ecosystem of "technical barriers + commercial realization" [6] Group 4 - The Swiss Federal Institute of Technology Zurich has proposed an innovative control framework for legged robots that combines reinforcement learning and multi-head attention mechanisms, enabling precise control and 100% success in obstacle navigation [11] - This method enhances the robot's adaptability to complex terrains by dynamically adjusting its focus based on real-time motion states and environmental data [11] - Both GR-1 and ANYmal-D robots have shown excellent performance in experimental and real-world environments, opening up new possibilities for practical applications [11] Group 5 - Lifeward's seventh-generation personal exoskeleton, ReWalk 7, has received CE certification for the European market, marking a significant milestone in medical device innovation for spinal cord injury rehabilitation [12] - ReWalk 7 features cloud connectivity, allowing users to control the device and track usage data through a smartwatch and mobile app, enabling personalized rehabilitation goals [12] - The new system supports seamless transitions between indoor and outdoor environments and includes one-click activation for stairs and sidewalks, enhancing user independence [12]

Core Insights - Lifeward Ltd. (LFWD) has received CE mark approval for the ReWalk 7 Personal Exoskeleton, allowing for commercial sale in Europe, which constitutes approximately 40% of the company's exoskeleton sales [1][7] - The ReWalk 7 features enhancements such as cloud connectivity, push-button control, customizable walking speeds, and the ability to navigate stairs and curbs, making it unique in the market [2][7] - The company has established supply contracts with major insurance carriers in Germany, covering about 45% of individuals with statutory health insurance, facilitating reimbursement for the exoskeletons [3] Financial Performance - Following the CE approval announcement, Lifeward's shares rose by 2.2% in after-market trading, although the stock has declined by 68.9% year-to-date, contrasting with a 20.4% growth in the industry and a 10.8% gain in the S&P 500 [4] - The recent approvals and improved cash burn rate due to operational efficiencies may positively impact future revenues and share price [5] Product Development and Manufacturing - The ReWalk 7 was launched in the U.S. in April, with over 20 units installed, marking the highest quarterly total for Medicare beneficiaries since the fee schedule was established [8] - The company transitioned to in-house manufacturing of the ReWalk, resulting in cost savings, improved quality control, and greater production flexibility [9] Research and Partnerships - Lifeward concluded a research program under the Israel Innovation Authority's MAGNET incentive program, demonstrating a proof-of-concept prototype integrating AI for autonomous decision-making in future ReWalk models [10] - The company expanded its partnership with SportsMed Products Ltd. for distributing its AlterG product portfolio in the UAE and the Gulf Cooperation Council [11]

Core Insights - Lifeward Ltd. has made significant progress in securing Medicare reimbursement for its ReWalk 7 Personal Exoskeleton, marking a milestone in expanding access for individuals with spinal cord injuries [1][2] - The company has successfully received its first payment from a commercial Medicare Advantage Plan, indicating a growing acceptance of its innovative medical technology [1][2] - The Centers for Medicare & Medicaid Services (CMS) has established a reimbursement pathway for personal exoskeletons, which has streamlined the claims process, allowing for quicker approvals and payments [2] Company Overview - Lifeward is a leader in medical technology focused on transforming the lives of individuals with physical limitations or disabilities, with a mission to drive innovation in rehabilitation and recovery [3] - The company's product portfolio includes the ReWalk Exoskeleton, AlterG Anti-Gravity System, ReStore Exo-Suit, and MyoCycle FES System, showcasing its commitment to delivering groundbreaking solutions [3] - Founded in 2001, Lifeward operates in the United States, Israel, and Germany, emphasizing its global reach and impact in the healthcare sector [3]

Core Viewpoint - Lifeward Ltd. has received CE mark approval for the ReWalk 7 Personal Exoskeleton, allowing for its commercial sale in the European Union, which is expected to drive revenue growth and market adoption in Europe [1][2]. Company Overview - Lifeward is a global leader in innovative medical technology aimed at transforming the lives of individuals with physical limitations or disabilities, with a mission to drive innovation in rehabilitation and recovery [3]. - The company has a diverse portfolio that includes the ReWalk Exoskeleton, AlterG Anti-Gravity System, ReStore Exo-Suit, and MyoCycle FES System, and operates in the United States, Israel, and Germany [3]. Product Details - The ReWalk 7 features advancements such as cloud connectivity, push-button control, customizable walking speeds, and seamless activation for stairs and curbs, enhancing user experience for individuals with spinal cord injuries [2]. - The European market, particularly Germany, is significant for Lifeward, representing approximately 40% of its exoskeleton sales, with established reimbursement processes for personal exoskeletons [1][2]. Market Position - Lifeward GmbH serves as the primary sales force in Europe, with Germany being the second largest market for ReWalk personal exoskeletons globally [2]. - The company has established supply contracts with major insurance carriers in Germany, facilitating reimbursement for about 45% of individuals with statutory health insurance coverage [2].

Company Performance - Lifeward reported a quarterly loss of $0.58 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.25, and compared to a loss of $0.50 per share a year ago [1][2] - The company's revenues for the quarter ended June 2025 were $5.72 million, missing the Zacks Consensus Estimate by 11.53%, and down from $6.71 million in the same quarter last year [3] - Lifeward has not surpassed consensus EPS estimates in the last four quarters and has only topped revenue estimates once during that period [2][3] Stock Performance - Lifeward shares have declined approximately 58.6% since the beginning of the year, contrasting with a 10% gain in the S&P 500 [4] - The current Zacks Rank for Lifeward is 3 (Hold), indicating that the stock is expected to perform in line with the market in the near future [7] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is -$0.14 on revenues of $7.77 million, and for the current fiscal year, it is -$0.77 on revenues of $29.02 million [8] - The trend of estimate revisions for Lifeward was mixed ahead of the earnings release, which could change following the recent report [7] Industry Context - Lifeward operates within the Zacks Internet - Software industry, which is currently ranked in the top 30% of over 250 Zacks industries, suggesting a favorable industry outlook [9] - The performance of Lifeward's stock may be influenced by the overall outlook for the industry [9]

PART I - FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS](index=6&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements for the six months ended June 30, 2025, with accompanying notes [Condensed Consolidated Balance Sheets](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **ASSETS** | | | | Cash and cash equivalents | $5,139 | $6,746 | | Total current assets | $20,710 | $21,294 | | Goodwill | $4,755 | $7,538 | | Total assets | $26,777 | $30,487 | | **LIABILITIES AND SHAREHOLDERS' EQUITY** | | | | Total current liabilities | $10,360 | $10,225 | | Total liabilities | $11,667 | $11,638 | | Total shareholders' equity | $15,110 | $18,849 | | Total liabilities and shareholders' equity | $26,777 | $30,487 | [Condensed Consolidated Statements of Operations](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $5,724 | $6,707 | $10,758 | $11,990 | | Gross profit | $2,511 | $2,757 | $4,633 | $4,152 | | Operating loss | $(6,563) | $(4,443) | $(11,416) | $(10,945) | | Net loss | $(6,562) | $(4,304) | $(11,396) | $(10,580) | | Net loss per ordinary share, basic and diluted | $(0.58) | $(0.50) | $(1.05) | $(1.23) | [Condensed Statements of Changes in Shareholders' Equity](index=9&type=section&id=CONDENSED%20STATEMENTS%20OF%20CHANGES%20IN%20SHAREHOLDERS'%20EQUITY) Changes in Shareholders' Equity (in thousands, except share data) | Metric | Balance as of Dec 31, 2024 | Share-based compensation | Issuance of ordinary shares (various) | Net loss | Balance as of June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Ordinary Shares Number | 8,808,143 | - | 6,842,587 | - | 15,658,730 | | Ordinary Shares Amount | $4,590 | - | $3,435 | - | $8,025 | | Additional paid-in capital | $282,287 | $402 | $3,865 | - | $286,509 | | Accumulated deficit | $(264,825) | - | - | $(11,396) | $(276,221) | | Total shareholders' equity | $18,849 | $402 | $6,233 | $(11,396) | $15,110 | - The Company completed a **one-for-seven reverse share split** effective March 15, 2024, retroactively adjusting all share and per share data[25](index=25&type=chunk)[91](index=91&type=chunk) - Significant equity raises occurred through an at-the-market offering and a public offering, contributing to an increase in ordinary shares and additional paid-in capital[24](index=24&type=chunk)[104](index=104&type=chunk)[108](index=108&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(9,429) | $(13,290) | | Net cash used in investing activities | $(5) | $0 | | Net cash provided by financing activities | $7,779 | $0 | | Decrease in cash, cash equivalents, and restricted cash | $(1,585) | $(13,305) | | Cash, cash equivalents, and restricted cash at end of period | $5,523 | $15,487 | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) [Note 1: General](index=12&type=section&id=NOTE%201%3A%20GENERAL) - Lifeward Ltd (formerly ReWalk Robotics Ltd) is a medical device company focused on rehabilitation and recovery solutions, including ReWalk Exoskeletons, ReStore Exo-Suit, MYOLYN MyoCycle FES Pro cycles, and AlterG Anti-Gravity systems[31](index=31&type=chunk) - The Company incurred a consolidated net loss of **$11.4 million** and had an accumulated deficit of **$276.2 million** as of June 30, 2025, with cash and cash equivalents totaling **$5.1 million** and negative operating cash flow of **$9.4 million** for the six months ended June 30, 2025; these conditions raise **substantial doubt** about the Company's ability to continue as a going concern[32](index=32&type=chunk) [Note 2: Basis of Presentation and Summary of Estimates](index=13&type=section&id=NOTE%202%3A%20BASIS%20OF%20PRESENTATION%20AND%20SUMMARY%20OF%20ESTIMATES) - The unaudited condensed consolidated financial statements are prepared in accordance with U.S GAAP, reflecting normal recurring adjustments for interim periods and should be read with the 2024 Form 10-K[34](index=34&type=chunk)[35](index=35&type=chunk) - Management's estimates, judgments, and assumptions are crucial for financial reporting, particularly for inventories, business combinations, revenue recognition, share-based awards, and contingent liabilities, with actual results potentially differing[36](index=36&type=chunk)[37](index=37&type=chunk) [Note 3: Significant Accounting Policies](index=15&type=section&id=NOTE%203%3A%20SIGNIFICANT%20ACCOUNTING%20POLICIES) [3a. Fair Value Measurements](index=15&type=section&id=3a.%20Fair%20Value%20Measurements) Fair Value Measurements (in thousands) | Description | Fair Value Hierarchy | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | :--- | | Money market funds (cash equivalents) | Level 1 | $1,113 | $2,697 | | Earnout liability | Level 3 | $0 | $608 | - The earnout liability, initially estimated at **$3.6 million** at acquisition, was eliminated as of June 30, 2025, because performance targets for the remaining earnout period were not met[44](index=44&type=chunk)[45](index=45&type=chunk) [3b. Revenue Recognition](index=16&type=section&id=3b.%20Revenue%20Recognition) Disaggregation of Revenues (in thousands) | Revenue Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Product | $4,561 | $5,128 | $8,287 | $8,867 | | Lease | $428 | $882 | $888 | $1,768 | | Service and warranty | $735 | $697 | $1,583 | $1,355 | | Total Revenues | $5,724 | $6,707 | $10,758 | $11,990 | - Revenue is generated from product sales (ReWalk, AlterG, ReStore, MyoCycle), leases (AlterG Anti-Gravity systems, SCI Products rent-to-purchase), and service/warranty contracts[46](index=46&type=chunk)[51](index=51&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) - Deferred revenues, primarily from service-type warranty obligations and multi-year service contracts, amounted to **$2.343 million** as of June 30, 2025, with **$0.9 million** recognized during the six months ended June 30, 2025[64](index=64&type=chunk)[65](index=65&type=chunk)[66](index=66&type=chunk) [3c. Concentrations of Credit Risks](index=20&type=section&id=3c.%20Concentrations%20of%20Credit%20Risks) Customer A Credit Concentration | Customer | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Customer A | 43% | 40% | - Allowance for credit losses was **$0.2 million** as of June 30, 2025, and December 31, 2024; provisions for doubtful accounts were **$0.3 million** for Q2 2025 and **$0.6 million** for H1 2025[67](index=67&type=chunk)[68](index=68&type=chunk) [3d. Warranty provision](index=20&type=section&id=3d.%20Warranty%20provision) Warranty Provision Activity (in thousands) | Metric | US Dollars in thousands | | :--- | :--- | | Balance at December 31, 2024 | $392 | | Provision | $281 | | Usage | $(327) | | Balance at June 30, 2025 | $346 | - The Company records a provision for estimated warranty costs at the time of sale for assurance-type warranties, with factors including units sold, historical repair rates, and cost per repair[69](index=69&type=chunk) [3e. Basic and diluted net loss per ordinary share](index=20&type=section&id=3e.%20Basic%20and%20diluted%20net%20loss%20per%20ordinary%20share) - Basic and diluted net loss per share were identical for all periods presented because the inclusion of potential ordinary shares and warrants would have been **anti-dilutive**[71](index=71&type=chunk)[72](index=72&type=chunk) [3f. Goodwill and acquired intangible assets](index=20&type=section&id=3f.%20Goodwill%20and%20acquired%20intangible%20assets) - Goodwill is tested for impairment annually or more frequently if indicators are present; the Company recorded a goodwill impairment of **$2.8 million** during Q2 2025 due to a decline in its stock price, making its market capitalization less than the carrying value of its reporting unit[74](index=74&type=chunk)[79](index=79&type=chunk) [3h. Restricted cash and Other long-term assets](index=21&type=section&id=3h.%20Restricted%20cash%20and%20Other%20long-term%20assets) - Other long-term assets include long-term prepaid expenses and restricted cash deposits for offices and car leasing, based on the remaining restriction term[75](index=75&type=chunk) [3i. New Accounting Pronouncements](index=22&type=section&id=3i.%20New%20Accounting%20Pronouncements) - The Company is evaluating the impact of ASU 2023-09 (Income Taxes - Improvements to Income Tax Disclosures) effective for fiscal years after December 15, 2024, and ASU 2024-03 (Expense Disaggregation Disclosures) effective for fiscal years after December 15, 2026[77](index=77&type=chunk) - ASU 2025-05 (Financial Instruments - Credit Losses) introduces a practical expedient for CECL model application to accounts receivable and contract assets, effective for fiscal years after December 15, 2025, and is currently being evaluated for adoption timing and impact[77](index=77&type=chunk) [Note 4: Inventories](index=22&type=section&id=NOTE%204%3A%20INVENTORIES) Inventories Components (in thousands) | Component | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Finished products | $3,041 | $3,580 | | Work in progress | $425 | $0 | | Raw materials | $4,156 | $3,143 | | Total | $7,622 | $6,723 | [Note 5: Goodwill and Other Intangible Assets, Net](index=23&type=section&id=NOTE%205%3A%20GOODWILL%20AND%20OTHER%20INTANGIBLE%20ASSETS%2C%20NET) Changes in Goodwill Carrying Amount (in thousands) | Metric | US Dollars in thousands | | :--- | :--- | | Balance as of December 31, 2024 | $7,538 | | Goodwill impairment | $(2,783) | | Balance as of June 30, 2025 | $4,755 | - A goodwill impairment charge of **$2.8 million** was recorded in Q2 2025 due to a sustained decline in the Company's stock price, indicating its market capitalization was below its carrying value[78](index=78&type=chunk)[79](index=79&type=chunk) - The carrying amounts of intangible assets were **fully impaired** as of December 31, 2024, and no impairment charges were recorded for long-lived assets during the periods presented[80](index=80&type=chunk)[81](index=81&type=chunk) [Note 6: Commitments and Contingent Liabilities](index=23&type=section&id=NOTE%206%3A%20COMMITMENTS%20AND%20CONTINGENT%20LIABILITIES) [6a. Purchase commitments](index=23&type=section&id=6a.%20Purchase%20commitments) - As of June 30, 2025, non-cancelable outstanding purchase obligations amounted to approximately **$7.4 million**[82](index=82&type=chunk) [6b. Operating lease commitment](index=24&type=section&id=6b.%20Operating%20lease%20commitment) Future Lease Payments (in thousands) | Year | Amount | | :--- | :--- | | 2025 | $264 | | 2026 | $76 | | 2027 | $53 | | 2028 | $12 | | Total lease payments | $405 | | Present value of future lease payments | $375 | | Non-current operating leases | $79 | - Operating lease expense was **$0.2 million** for Q2 2025 (down from $0.3 million in Q2 2024) and **$0.4 million** for H1 2025 (down from $0.7 million in H1 2024)[83](index=83&type=chunk) [6c. Royalties](index=24&type=section&id=6c.%20Royalties) - The Company has received **$2.8 million** in funding from the Israel Innovation Authority (IIA) since inception, with **$1.6 million** being royalty-bearing grants; a contingent liability of **$1.6 million** to the IIA remains as of June 30, 2025[84](index=84&type=chunk)[86](index=86&type=chunk) - Royalty expenses in cost of revenue were **$8 thousand** for Q2 2025 and **$2 thousand** for H1 2025[85](index=85&type=chunk) [6d. Liens](index=25&type=section&id=6d.%20Liens) - An amount of **$0.4 million** from other long-term assets and restricted cash has been pledged as security for a third-party guarantee[89](index=89&type=chunk) [6e. Legal Claims](index=25&type=section&id=6e.%20Legal%20Claims) - The Company is occasionally involved in various claims, including product liability lawsuits and regulatory examinations, with outcomes inherently uncertain and potentially material to financial results[89](index=89&type=chunk) [Note 7: Shareholders' Equity](index=26&type=section&id=NOTE%207%3A%20SHAREHOLDERS'%20EQUITY) [7a. Reverse share split](index=26&type=section&id=7a.%20Reverse%20share%20split) - A **one-for-seven reverse share split** became effective on March 15, 2024, reducing outstanding ordinary shares from approximately 60.1 million to 8.6 million, with retroactive effect on all share and per share data[91](index=91&type=chunk) [7b. Share option plans](index=26&type=section&id=7b.%20Share%20option%20plans) - The 2014 Incentive Compensation Plan was terminated on August 19, 2024, with no ordinary shares reserved as of June 30, 2025; a new 2025 Incentive Compensation Plan was approved on August 1, 2025[92](index=92&type=chunk)[94](index=94&type=chunk) Employee Share Options Activity (Six Months Ended June 30, 2025) | Metric | Number | Weighted average exercise price | | :--- | :--- | :--- | | Options outstanding as of Dec 31, 2024 | 4,573 | $187.94 | | Granted | 400,000 | $1.23 | | Forfeited | (22) | $500.74 | | Options outstanding as of June 30, 2025 | 404,551 | $3.31 | | Options exercisable as of June 30, 2025 | 4,551 | $186.43 | Employee and Non-Employee RSUs Activity (Six Months Ended June 30, 2025) | Metric | Number of shares underlying outstanding RSUs | Weighted average grant date fair value | | :--- | :--- | :--- | | Unvested RSUs as of Dec 31, 2024 | 327,243 | $5.68 | | Vested | (68,286) | $5.84 | | Forfeited | (25,629) | $4.96 | | Unvested RSUs as of June 30, 2025 | 233,328 | $5.72 | - Total unrecognized compensation costs related to non-vested share-based compensation were **$1.3 million** as of June 30, 2025, expected to be recognized over approximately **3.93 years**[99](index=99&type=chunk) [7c. Share-based awards to non-employee consultants](index=28&type=section&id=7c.%20Share-based%20awards%20to%20non-employee%20consultants) - As of June 30, 2025, there were **no outstanding options or RSUs** held by non-employee consultants[100](index=100&type=chunk) [7d. Share-based compensation expense for employees and non-employees](index=28&type=section&id=7d.%20Share-based%20compensation%20expense%20for%20employees%20and%20non-employees) Share-Based Compensation Expense (in thousands) | Category | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Cost of revenues | $7 | $9 | | Research and development, net | $73 | $92 | | Sales and marketing | $138 | $218 | | General and administrative | $184 | $438 | | Total | $402 | $757 | [7e. Warrants to purchase ordinary shares](index=29&type=section&id=7e.%20Warrants%20to%20purchase%20ordinary%20shares) Warrants Outstanding and Exercisable (as of June 30, 2025) | Issuance Date | Warrants Outstanding (number) | Exercise Price per Warrant | Contractual Term | | :--- | :--- | :--- | :--- | | December 31, 2015 | 681 | $52.50 | Until Dec 30, 2025 | | December 28, 2016 | 272 | $52.50 | Until Dec 30, 2025 | | July 6, 2020 | 64,099 | $12.32 | January 2, 2026 | | July 6, 2020 | 42,326 | $15.95 | July 2, 2025 | | December 8, 2020 | 83,821 | $9.38 | June 8, 2026 | | December 8, 2020 | 15,543 | $12.55 | June 8, 2026 | | February 26, 2021 | 780,095 | $25.20 | August 26, 2026 | | February 26, 2021 | 93,612 | $32.05 | August 26, 2026 | | September 29, 2021 | 1,143,821 | $14.00 | March 29, 2027 | | September 29, 2021 | 137,257 | $17.81 | September 27, 2026 | | January 8, 2025 | 1,818,183 | $2.75 | January 10, 2028 | | January 8, 2025 | 109,091 | $3.44 | January 10, 2028 | | June 26, 2025 | 4,000,000 | $0.65 | June 26, 2030 | | June 26, 2025 | 240,000 | $0.81 | June 25, 2030 | | Total | 8,528,801 | | | [7f. Equity raise](index=30&type=section&id=7f.%20Equity%20raise) - In January 2025, the Company issued **1,818,183 ordinary shares** and warrants to institutional investors at **$2.75 per share**, raising capital through a registered direct offering and concurrent private placement[103](index=103&type=chunk) - An At-the-Market (ATM) Offering Agreement was established in March 2025, allowing the sale of up to **$5.5 million** in ordinary shares; during Q2 2025, **964,118 shares** were sold under the ATM program for net proceeds of approximately **$1.0 million**[104](index=104&type=chunk)[105](index=105&type=chunk)[106](index=106&type=chunk) - In June 2025, the Company completed a public offering of **4,000,000 ordinary shares** and warrants at **$0.65 per share**, with additional warrants issued to the placement agent[108](index=108&type=chunk) [Note 8: Financial Income, Net](index=32&type=section&id=NOTE%208%3A%20FINANCIAL%20INCOME%2C%20NET) Financial Income, Net (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Foreign currency transactions and other | $(25) | $(14) | $(20) | $(37) | | Interest Income | $65 | $196 | $121 | $484 | | Bank commissions | $(39) | $(38) | $(70) | $(71) | | Total Financial income, net | $1 | $144 | $31 | $376 | [Note 9: Geographic Information and Major Customer and Product Data](index=32&type=section&id=NOTE%209%3A%20GEOGRAPHIC%20INFORMATION%20AND%20MAJOR%20CUSTOMER%20AND%20PRODUCT%20DATA) Revenues by Geographic Area (in thousands) | Region | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | United States | $3,062 | $3,849 | $6,271 | $7,596 | | Europe | $2,103 | $2,308 | $3,439 | $3,477 | | Asia-Pacific | $124 | $214 | $166 | $394 | | Rest of the world | $435 | $336 | $882 | $523 | | Total revenues | $5,724 | $6,707 | $10,758 | $11,990 | Long-Lived Assets by Geographic Region (in thousands) | Region | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Israel | $294 | $359 | | United States | $744 | $947 | | Germany | $46 | $109 | | Total | $1,084 | $1,415 | Major Customer Data as a Percentage of Total Revenues | Customer | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Customer A | 15% | 23% | [Note 10: Subsequent Event](index=33&type=section&id=NOTE%2010%3A%20SUBSEQUENT%20EVENT) - On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, including changes to U.S federal tax law, which the Company is currently assessing for its impact on consolidated financial statements[116](index=116&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=34&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses the company's financial condition and operational results for the six months ended June 30, 2025 [Overview](index=34&type=section&id=Overview) - Lifeward is a medical device company commercializing life-changing solutions for physical rehabilitation, including ReWalk Personal and Rehabilitation Exoskeletons, ReStore Exo-Suit, MYOLYN MyoCycle FES Pro cycles, and AlterG Anti-Gravity systems[118](index=118&type=chunk)[119](index=119&type=chunk)[120](index=120&type=chunk) - Key developments include FDA clearance for ReWalk Personal Exoskeleton with stair and curb functionality (March 2023), submission of 510(k) for ReWalk 7 (June 2024), and an ALJ ruling in favor of **Medicare coverage** for ReWalk Personal Exoskeleton (June 2025)[118](index=118&type=chunk) - The Company acquired AlterG in August 2023 for approximately **$19 million cash**, expanding its product offerings in anti-gravity systems for rehabilitation[120](index=120&type=chunk) - A partnership with CorLife, LLC (a division of Numotion) was announced in March 2025 to exclusively distribute the ReWalk Personal Exoskeleton in the workers' compensation market[121](index=121&type=chunk) - CMS confirmed in November 2023 that personal exoskeletons are included in the Medicare brace benefit category, with a final lump-sum Medicare purchase fee schedule amount of **$91,032** established in April 2024 for HCPCS code K1007[126](index=126&type=chunk)[127](index=127&type=chunk) [Second Quarter 2025 Business Highlights](index=37&type=section&id=Second%20Quarter%202025%20Business%20Highlights) - Achieved **FDA clearance and U.S. launch of ReWalk 7** in April 2025, with over 20 units installed and positive customer feedback[133](index=133&type=chunk) - Expanded qualified leads for ReWalk and achieved the **highest quarterly total of ReWalk units placed for Medicare beneficiaries** since the fee schedule was established[133](index=133&type=chunk) - Improved quarterly cash burn to **$3.9 million** (down from $5.6 million in Q2 2024 and $5.5 million in Q1 2025) due to operational efficiencies and cost reduction initiatives[133](index=133&type=chunk) - Successfully transitioned to **in-house manufacturing** of ReWalk Personal Exoskeleton during Q2, terminating the agreement with Sanmina, leading to cost savings and improved quality control[133](index=133&type=chunk) - Strengthened executive leadership with the appointment of Mark Grant as President and CEO and Almog Adar as CFO[133](index=133&type=chunk) [Three and Six Months Ended June 30, 2025 Compared to Three and Six Months Ended June 30, 2024](index=38&type=section&id=Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20Compared%20to%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202024) [Revenue](index=38&type=section&id=Revenue) Revenue (in thousands) | Period | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $5,724 | $6,707 | $(983) | -14.7% | | Six Months Ended June 30 | $10,758 | $11,990 | $(1,232) | -10.3% | - The decrease in revenue was primarily due to one-time Medicare-related revenue recognized in Q2 2024 for prior period claims and lower sales volume of MyoCycle units[135](index=135&type=chunk)[136](index=136&type=chunk) [Gross Profit](index=38&type=section&id=Gross%20Profit) Gross Profit (in thousands) | Period | 2025 | 2024 | Gross Profit Margin 2025 | Gross Profit Margin 2024 | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $2,511 | $2,757 | 43.9% | 41.1% | | Six Months Ended June 30 | $4,633 | $4,152 | 43.1% | 34.6% | - **Gross profit margin increased** for both periods, driven by lower production costs following the closure of the Fremont manufacturing facility and the transition of AlterG production to a contract manufacturer, with further improvements expected from in-house ReWalk production[139](index=139&type=chunk)[140](index=140&type=chunk) [Research and Development Expenses, net](index=39&type=section&id=Research%20and%20Development%20Expenses%2C%20net) Research and Development Expenses, net (in thousands) | Period | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $767 | $1,205 | $(438) | -36.3% | | Six Months Ended June 30 | $1,685 | $2,496 | $(811) | -32.5% | - The decrease in R&D expenses was primarily due to the **completion of development programs** for the ReWalk 7 and AlterG NEO[142](index=142&type=chunk)[143](index=143&type=chunk) [Sales and Marketing Expenses](index=40&type=section&id=Sales%20and%20Marketing%20Expenses) Sales and Marketing Expenses (in thousands) | Period | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $3,785 | $4,403 | $(618) | -14.0% | | Six Months Ended June 30 | $7,622 | $9,417 | $(1,795) | -19.1% | - The decrease was driven by a reduction in reimbursement and marketing consultants, lower promotional spending, and the absence of amortization of intangible assets from the AlterG acquisition (which was **$0.4 million** in Q2 2024 and **$0.8 million** in H1 2024)[145](index=145&type=chunk)[146](index=146&type=chunk) [General and Administrative Expenses](index=40&type=section&id=General%20and%20Administrative%20Expenses) General and Administrative Expenses (in thousands) | Period | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $1,739 | $1,592 | $147 | 9.2% | | Six Months Ended June 30 | $3,959 | $3,184 | $775 | 24.3% | - The increase was primarily due to a **$0.4 million bad debt expense** in Q2 2025 (**$0.6 million** in H1 2025) related to Medicare claims and restructuring costs, partially offset by the elimination of the earnout liability[148](index=148&type=chunk)[149](index=149&type=chunk) [Impairment Charges](index=40&type=section&id=Impairment%20Charges) Impairment Charges (in thousands) | Period | 2025 | 2024 | | :--- | :--- | :--- | | Three Months Ended June 30 | $2,783 | $0 | | Six Months Ended June 30 | $2,783 | $0 | - A goodwill impairment charge of **$2.8 million** was recorded in Q2 2025 due to a sustained decline in the Company's share price, which caused its market capitalization to fall below its carrying value[150](index=150&type=chunk) [Financial Income, Net](index=41&type=section&id=Financial%20Income%2C%20Net) Financial Income, Net (in thousands) | Period | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $1 | $144 | $(143) | -99.3% | | Six Months Ended June 30 | $31 | $376 | $(345) | -91.8% | - The significant decrease in financial income, net, was primarily attributable to **lower yields on a reduced cash balance**[153](index=153&type=chunk) [Income Taxes](index=41&type=section&id=Income%20Taxes) Income Taxes (in thousands) | Period | 2025 | 2024 | Change ($) | | :--- | :--- | :--- | | Three Months Ended June 30 | $0 | $5 | $(5) | | Six Months Ended June 30 | $11 | $11 | $0 | - Income taxes decreased in Q2 2025 due to deferred taxes and timing differences in subsidiaries; for the six months, taxes remained constant, reflecting taxes incurred in Germany[154](index=154&type=chunk)[155](index=155&type=chunk) [Critical Accounting Policies and Estimates](index=42&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - The preparation of financial statements requires significant estimates and judgments, which can affect reported amounts; no material changes to critical accounting policies were made, except for updates in Note 3[156](index=156&type=chunk)[157](index=157&type=chunk) [Recent Accounting Pronouncements](index=42&type=section&id=Recent%20Accounting%20Pronouncements) - Information regarding new accounting pronouncements is detailed in Note 3 to the unaudited condensed consolidated financial statements[158](index=158&type=chunk) [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) [Sources of Liquidity and Outlook](index=42&type=section&id=Sources%20of%20Liquidity%20and%20Outlook) - As of June 30, 2025, the Company had **$5.1 million** in cash and cash equivalents and an accumulated deficit of **$276.2 million**, raising substantial doubt about its ability to continue as a going concern[160](index=160&type=chunk) - Existing cash resources are expected to fund operations into **Q4 2025**; the Company plans to finance future operating costs through existing cash, reduced operating cash burn, and potential future equity/debt issuances[160](index=160&type=chunk)[161](index=161&type=chunk) - The Company received a deficiency letter from Nasdaq on August 5, 2025, for failing to maintain a minimum bid price of **$1.00 per share**, with 180 days to regain compliance to avoid potential delisting[167](index=167&type=chunk)[192](index=192&type=chunk) [Equity Raises](index=43&type=section&id=Equity%20Raises) - The Company is subject to Form S-3 limitations, restricting primary securities offerings to **one-third of its public float** in any 12-month period due to a public float below $75 million[168](index=168&type=chunk) - In January 2025, the Company issued **1,818,183 ordinary shares** and warrants for **$2.75 per share**, raising capital through a registered direct offering[170](index=170&type=chunk) - An At-the-Market (ATM) Offering Agreement was established in March 2025, under which **964,118 ordinary shares** were sold for net proceeds of approximately **$1.0 million** during Q2 2025[171](index=171&type=chunk)[172](index=172&type=chunk) - In June 2025, the Company completed a public offering of **4,000,000 ordinary shares** and warrants at **$0.65 per share**[174](index=174&type=chunk) [Cash Flows for the Six Months Ended June 30, 2025 and 2024](index=45&type=section&id=Cash%20Flows%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) Net Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(9,429) | $(13,290) | | Net cash used in investing activities | $(5) | $0 | | Net cash provided by financing activities | $7,779 | $0 | | Net cash flow | $(1,585) | $(13,305) | - Net cash used in operating activities decreased by **$3.9 million (29.1%)** due to improved working capital management and reduced operating expenses[178](index=178&type=chunk) - Net cash provided by financing activities increased by **$7.8 million**, primarily from the January 2025 offering, ATM program, and June 2025 offering[180](index=180&type=chunk) [Obligations and Contractual Commitments](index=45&type=section&id=Obligations%20and%20Contractual%20Commitments) Contractual Obligations as of June 30, 2025 (in thousands) | Contractual obligations | Total | Less than 1 year | 1-3 years | | :--- | :--- | :--- | :--- | | Purchase obligations | $7,384 | $7,384 | $0 | | Operating lease obligations | $405 | $309 | $96 | | Total | $7,789 | $7,693 | $96 | - The Company terminated its manufacturing agreement with Sanmina Corporation in June 2025; AlterG Anti-Gravity systems are now produced by Cirtronics Corporation[182](index=182&type=chunk) [Off-Balance Sheet Arrangements](index=46&type=section&id=Off-Balance%20Sheet%20Arrangements) - As of June 30, 2025, the Company had **no off-balance sheet arrangements** or guarantees of third-party obligations[184](index=184&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=46&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) There have been no material changes to the Company's market risk exposure during the second quarter of 2025 - **No material changes** to market risk occurred during Q2 2025[185](index=185&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=46&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) This section confirms the effectiveness of Lifeward's disclosure controls and procedures as of June 30, 2025, and reports no material changes in internal control over financial reporting during the quarter [Disclosure Controls and Procedures](index=46&type=section&id=Disclosure%20Controls%20and%20Procedures) - As of June 30, 2025, the Chief Executive Officer and Principal Financial Officer concluded that the Company's disclosure controls and procedures were **effective**[187](index=187&type=chunk) [Changes in Internal Control over Financial Reporting](index=46&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - **No changes** in internal control over financial reporting materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting during the quarter ended June 30, 2025[188](index=188&type=chunk) PART II - OTHER INFORMATION [ITEM 1. LEGAL PROCEEDINGS](index=47&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) There have been no material changes to the Company's legal proceedings as described in its 2024 Form 10-K, except as noted in the financial statements - **No material changes** to legal proceedings were reported, except as described in Note 7 of the financial statements[190](index=190&type=chunk) [ITEM 1A. RISK FACTORS](index=47&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section highlights new risks including non-compliance with Nasdaq's minimum bid price and challenges from in-house manufacturing transition - The Company is **non-compliant with Nasdaq's minimum bid price requirement** ($1.00 per share) as of August 4, 2025, and has 180 calendar days to regain compliance to avoid potential delisting[191](index=191&type=chunk)[192](index=192&type=chunk) - **Delisting from Nasdaq** could severely decrease the value and liquidity of ordinary shares, potentially leading to a 'penny stock' designation and hindering future financing[193](index=193&type=chunk) - The transition of ReWalk product manufacturing to an **in-house facility** in Q2 2025, following the termination of the agreement with Sanmina, poses risks related to building experienced teams and sourcing components, which could adversely affect business operations[194](index=194&type=chunk)[195](index=195&type=chunk)[196](index=196&type=chunk)[197](index=197&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=49&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This item is not applicable for the reporting period - Not applicable[198](index=198&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=49&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) This item is not applicable for the reporting period - Not applicable[199](index=199&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=49&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable for the reporting period - Not applicable[200](index=200&type=chunk) [ITEM 5. OTHER INFORMATION](index=49&type=section&id=ITEM%205.%20OTHER%20INFORMATION) This section confirms that no Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers during the quarter - **No Rule 10b5-1 trading arrangements** were adopted or terminated by directors or officers during the quarter ended June 30, 2025[201](index=201&type=chunk) [ITEM 6. EXHIBITS](index=50&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed with the Form 10-Q, including organizational documents, warrant forms, purchase agreements, and certifications - Exhibits include the Seventh Amended and Restated Articles of Association, forms of ordinary and placement agent warrants, securities purchase agreements, an employment agreement for the President and CEO, and certifications under the Sarbanes-Oxley Act[203](index=203&type=chunk) [SIGNATURES](index=51&type=section&id=SIGNATURES) The report is duly signed on behalf of Lifeward Ltd by its President and Chief Executive Officer and its Chief Financial Officer on August 14, 2025 - The report was signed by William Mark Grant, President and CEO, and Almog Adar, CFO, on **August 14, 2025**[208](index=208&type=chunk)

Financial Data and Key Metrics Changes - LifeWorks reported revenues of $5.7 million in Q2 2025, a decrease of $1 million or about 15% year-over-year compared to $6.7 million in Q2 2024, but an increase of approximately 14% quarter-over-quarter from $5 million in Q1 2025 [19][24] - GAAP gross profit was $2.5 million or 43.9% of revenue in Q2 2025, compared to $2.8 million or 41.1% in Q2 2024 [22] - GAAP operating loss for Q2 2025 was $6.6 million compared to $4.4 million in Q2 2024, while non-GAAP operating loss was $3.5 million compared to $3.7 million in the same period last year [24] Business Line Data and Key Metrics Changes - Revenue from traditional products and services totaled $2.5 million in Q2 2025, down from $3.1 million in Q2 2024, a decrease of about 19% [19] - Revenue from AlterG products and services was $3.2 million in Q2 2025, down from $3.6 million in Q2 2024, primarily due to the timing of deliveries to international distributors [20] - The ReWalk product line saw its highest quarterly total of units placed to Medicare beneficiaries since the schedule was established in April 2024 [19] Market Data and Key Metrics Changes - The pipeline of qualified leads for the ReWalk product line increased by 86% since Q3 2024, ending the quarter with more than one-third of leads in process in the U.S. [21] - In Germany, there were 46 leads in process at the quarter end, including 34 active rentals, which historically convert to sales within three to six months [21] Company Strategy and Development Direction - The company’s growth strategy is anchored in three core pillars: accelerating commercial adoption, portfolio diversification, and operational excellence [12][13] - The focus is on building strong momentum from recent Medicare and commercial insurer wins by reducing approval times and expanding coverage [12] - The company aims to leverage software innovation and AI integration to deepen customer engagement and ensure solutions are effective and commercially viable [13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that revenue cycles in their markets are inherently extended, particularly those dependent on payer approvals and coverage decisions [28] - The company expects gradual growth in the next few quarters, with meaningful acceleration weighted toward the back half of their strategic plan [28] - Management remains committed to developing solutions that enhance independence and quality of life for patients [30] Other Important Information - The company ended Q2 2025 with $5.1 million in cash and cash equivalents and no debt, indicating a strong liquidity position [24] - LifeWorks is considering both debt and equity opportunities to support operations and growth plans while implementing cost management strategies [26] Q&A Session Summary Question: Can you provide details on Medicare revenue for the quarter? - Management clarified that in Q2 2024, there was a one-time revenue recognition of approximately $700,000, and excluding this, Medicare-related sales grew year-over-year [33] Question: What is the current status of leads in the U.S. and Germany? - Management confirmed that Medicare leads are greater than 130, with a strong pipeline building quarter over quarter [34][36] Question: How does the current tariff situation impact the company? - Management stated that the ReWalk exoskeleton is exempt from tariffs, but there are some tariff situations with the UltraG product that are being addressed [39] Question: What are the plans for AlterG commercialization? - Management emphasized the importance of focusing on channel partners and specific markets to ensure sustainable growth for the AlterG product line [51] Question: What is the reasoning behind lowering the guidance? - Management explained that the trajectory of growth has changed, and while pipelines are growing, the timing of revenue recognition is still being understood [60]

[Executive Summary & Recent Highlights](index=1&type=section&id=ExecutiveSummaryHighlights) Lifeward Ltd. reported Q2 2025 results, highlighting record ReWalk systems for Medicare, pipeline growth, new executive leadership, ReWalk 7 launch, and improved cash burn [Introduction](index=1&type=section&id=Introduction) Lifeward Ltd. announced its Q2 2025 financial results, highlighting a record number of ReWalk systems placed for Medicare beneficiaries, consistent U.S. ReWalk pipeline growth, and the appointment of a new CEO and CFO to drive strategic changes and accelerate growth - Lifeward achieved a **record number of ReWalk systems** placed for Medicare beneficiaries since the fee schedule was established[1](index=1&type=chunk) - The company reported its **third consecutive quarter of U.S. ReWalk pipeline growth**, with **over 130 qualified leads** in process[1](index=1&type=chunk) - **New executive leadership** was appointed, with Mark Grant as President and CEO and Almog Adar as CFO, to spearhead strategic change and accelerate growth[1](index=1&type=chunk) [Operational Highlights](index=1&type=section&id=OperationalHighlights) Lifeward advanced on multiple fronts in Q2 2025, including FDA clearance and launch of ReWalk 7, expansion of the ReWalk pipeline and U.S. payer base, significant improvement in cash burn, successful transition to in-house manufacturing for ReWalk Personal Exoskeleton, and strengthening of executive leadership - Achieved **FDA clearance and launched ReWalk 7** in April 2025, with **over 20 units installed** and positive customer feedback[4](index=4&type=chunk) - Expanded and advanced the ReWalk pipeline, achieving the **highest quarterly total of ReWalk units placed for Medicare beneficiaries** since the fee schedule was established in April 2024[4](index=4&type=chunk) - **Improved quarterly cash burn to $3.9 million**, down from $5.6 million in Q2 2024 and $5.5 million in Q1 2025, due to operational efficiencies and cost reduction initiatives[4](index=4&type=chunk) - Successfully transitioned to **in-house manufacturing** of the ReWalk Personal Exoskeleton, leading to cost savings, improved quality control, and greater production flexibility[4](index=4&type=chunk) - **Strengthened executive leadership** with the appointment of Mark Grant as President and CEO and Almog Adar as CFO[4](index=4&type=chunk) [Second Quarter 2025 Financial Results](index=2&type=section&id=FinancialPerformanceQ22025) Lifeward's Q2 2025 results show decreased revenue, improved GAAP gross margin, increased GAAP operating expenses due to impairment, and improved liquidity [Revenue Analysis](index=2&type=section&id=RevenueAnalysis) Lifeward's revenue for Q2 2025 was $5.7 million, a 15% decrease year-over-year but a 14% increase quarter-over-quarter. The YoY decrease was primarily due to the absence of a one-time Medicare-related revenue benefit recognized in Q2 2024 and timing of international deliveries for AlterG products Revenue Overview | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (YoY) | Change (%) | | :----- | :-------------------- | :-------------------- | :----------- | :--------- | | Revenue | $5.7 | $6.7 | -$1.0 | -15% | | Revenue (Q1 2025) | $5.0 | N/A | +$0.7 | +14% | Revenue by Product Category | Product Category | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (YoY) | Change (%) | | :--------------- | :-------------------- | :-------------------- | :----------- | :--------- | | Traditional Products & Services | $2.5 | $3.1 | -$0.6 | -19% | | AlterG Products & Services | $3.2 | $3.6 | -$0.4 | -11% | - Excluding a one-time Medicare-related revenue of approximately **$0.7 million** recognized in Q2 2024, revenue from traditional products and services **grew year-over-year**[5](index=5&type=chunk) [Gross Margin](index=2&type=section&id=GrossMargin) GAAP gross margin improved to 43.9% in Q2 2025 from 41.1% in Q2 2024. However, non-GAAP adjusted gross margin decreased to 44.0% from 46.9% year-over-year, primarily due to the absence of the one-time Medicare-related revenue benefit from the prior year Gross Margin Performance | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :----- | :------ | :------ | :----------- | | GAAP Gross Margin | 43.9% | 41.1% | +2.8 pp | | Non-GAAP Adjusted Gross Margin | 44.0% | 46.9% | -2.9 pp | - The year-over-year **decrease in non-GAAP margin** reflects the absence of a one-time Medicare-related revenue benefit recognized in Q2 2024[6](index=6&type=chunk) [Operating Expenses and Loss](index=2&type=section&id=OperatingExpensesLoss) Total GAAP operating expenses increased to $9.1 million in Q2 2025 from $7.2 million in Q2 2024, mainly due to a $2.8 million goodwill impairment charge. Non-GAAP adjusted operating expenses decreased by $0.9 million to $6.0 million, driven by efficiencies in reimbursement, marketing/sales, and lower R&D spending. GAAP operating loss widened to $6.6 million, while non-GAAP adjusted operating loss slightly improved to $3.5 million Operating Expenses and Loss Summary | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (YoY) | | :----- | :-------------------- | :-------------------- | :----------- | | Total GAAP Operating Expenses | $9.1 | $7.2 | +$1.9 | | Goodwill Impairment Charge | $2.8 | $0.0 | +$2.8 | | Non-GAAP Adjusted Operating Expenses | $6.0 | $6.9 | -$0.9 | | GAAP Operating Loss | ($6.6) | ($4.4) | -$2.2 | | Non-GAAP Adjusted Operating Loss | ($3.5) | ($3.7) | +$0.2 | - The increase in GAAP operating expenses was largely driven by a **$2.8 million non-cash goodwill impairment charge**[7](index=7&type=chunk) - The **decrease in non-GAAP operating expenses** reflects greater efficiency in reimbursement activities, improved productivity in marketing and sales, and lower R&D spending[7](index=7&type=chunk) [Net Loss and EPS](index=2&type=section&id=NetLossEPS) Lifeward reported a GAAP net loss of $6.6 million, or $0.58 per share, for Q2 2025, compared to a net loss of $4.3 million, or $0.50 per share, in Q2 2024. On a non-GAAP basis, the adjusted net loss was $3.5 million, or $0.31 per share, an improvement from $3.6 million, or $0.42 per share, in the prior-year quarter Net Loss and EPS Summary | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (YoY) | | :----- | :-------------------- | :-------------------- | :----------- | | GAAP Net Loss | ($6.6) | ($4.3) | -$2.3 | | GAAP Net Loss Per Share | ($0.58) | ($0.50) | -$0.08 | | Non-GAAP Adjusted Net Loss | ($3.5) | ($3.6) | +$0.1 | | Non-GAAP Adjusted Net Loss Per Share | ($0.31) | ($0.42) | +$0.11 | [Liquidity](index=3&type=section&id=Liquidity) As of June 30, 2025, Lifeward had $5.1 million in unrestricted cash and cash equivalents with no debt. Cash used in operations significantly improved to $3.9 million in Q2 2025, down from $5.6 million in Q2 2024, reflecting operational efficiencies and facility closures Liquidity Position | Metric | As of June 30, 2025 (in millions) | As of June 30, 2024 (in millions) | Change (YoY) | | :----- | :-------------------------------- | :-------------------------------- | :----------- | | Unrestricted Cash & Cash Equivalents | $5.1 | N/A | N/A | | Cash Used in Operations (Q2) | $3.9 | $5.6 | -$1.7 | - The company had **no debt** on its balance sheet as of June 30, 2025[10](index=10&type=chunk) [Financial Guidance](index=3&type=section&id=FinancialGuidance) Lifeward's new management team reset full-year 2025 guidance, projecting revenue of $24-26 million and a non-GAAP net loss of $12-14 million [2025 Full-Year Guidance](index=3&type=section&id=2025FullYearGuidance) Lifeward has reset its full-year 2025 financial guidance under the new management team, projecting revenue between $24 million and $26 million and a non-GAAP net loss between $12 million and $14 million 2025 Full-Year Projections | Metric | 2025 Full-Year Guidance (in millions) | | :----- | :------------------------------------ | | Revenue | $24–$26 | | Non-GAAP Net Loss | $12–$14 | [Corporate Information](index=3&type=section&id=CorporateInformation) This section covers Q2 2025 conference call details, Lifeward's mission and products, forward-looking statement disclaimers, and non-GAAP financial measure explanations [Conference Call Details](index=3&type=section&id=ConferenceCallDetails) Lifeward management will host a conference call on August 14, 2025, at 8:30 AM EST to discuss the financial results. Details for telephone access and webcast are provided Conference Call Information | Detail | Information | | :----- | :---------- | | Date | August 14, 2025 | | Time | 8:30 AM EST | | U.S. Telephone | 1-833-316-0561 | | International Telephone | 1-412-317-0690 | | Webcast | https://edge.media-server.com/mmc/p/kegov6it | [About Lifeward](index=3&type=section&id=AboutLifeward) Lifeward Ltd. is a global leader in innovative medical technology, designing, developing, and commercializing solutions for physical rehabilitation and recovery. The company's mission is to drive innovation to empower individuals with physical limitations, offering products like the ReWalk Exoskeleton, AlterG Anti-Gravity system, ReStore Exo-Suit, and MyoCycle FES System. Founded in 2001, Lifeward operates in the U.S., Israel, and Germany - Lifeward **designs, develops, and commercializes life-changing solutions** for physical rehabilitation and recovery[13](index=13&type=chunk) - Key products include the **ReWalk Exoskeleton, AlterG Anti-Gravity system, ReStore Exo-Suit, and MyoCycle FES System**[13](index=13&type=chunk) - Founded in 2001, Lifeward has operations in the **United States, Israel, and Germany**[14](index=14&type=chunk) [Forward-Looking Statements](index=4&type=section&id=ForwardLookingStatements) This section contains standard forward-looking statements regarding future performance, subject to uncertainties, risks, and changes in circumstances. It highlights important factors that could cause actual results to differ materially, including product acceptance, regulatory approvals, funding, market acceptance, reimbursement, and intellectual property protection - Forward-looking statements are based on management's current expectations and are subject to **uncertainty, risks, and changes in circumstances**[16](index=16&type=chunk) - **Key risk factors** include acceptance of new products (e.g., ReWalk 7), uncertainties in clinical trials and regulatory processes, ability to meet capital requirements, market acceptance, and third-party payer reimbursement (including CMS)[16](index=16&type=chunk) - The company undertakes **no obligation to publicly update** any forward-looking statements, except as required by law[16](index=16&type=chunk) [Non-GAAP Financial Measures Explanation](index=5&type=section&id=NonGAAPFinancialMeasuresExplanation) Lifeward uses non-GAAP financial measures, such as non-GAAP net loss, to supplement GAAP statements, believing they provide more meaningful comparisons by excluding non-cash share-based compensation and acquisition costs. The company emphasizes that these measures are not GAAP alternatives and may not be comparable to other companies, urging investors to review reconciliations - Non-GAAP measures are used to provide **more meaningful comparisons** between operating results by excluding non-cash share-based compensation expense and acquisition costs[18](index=18&type=chunk) - Non-GAAP financial measures are **not prepared in accordance with GAAP** and should not be considered alternatives to GAAP measures[18](index=18&type=chunk) - Lifeward **does not provide GAAP reconciliation** for its non-GAAP financial guidance due to the inability to predict certain items with reasonable certainty[20](index=20&type=chunk) [Media & Investor Contacts](index=5&type=section&id=MediaInvestorContacts) Contact information for Lifeward's Media Relations and Investor Contact is provided, including the Vice President of Marketing & New Business Development and the Chief Financial Officer - **Media inquiries** can be directed to Kathleen O'Donnell, Vice President, Marketing & New Business Development[21](index=21&type=chunk) - **Investor inquiries** can be directed to Almog Adar, Chief Financial Officer[21](index=21&type=chunk) [Condensed Consolidated Financial Statements (GAAP)](index=6&type=section&id=CondensedConsolidatedFinancialStatementsGAAP) This section presents Lifeward's GAAP financial statements, including statements of operations, balance sheets, and cash flows, detailing financial position and performance [Statements of Operations](index=6&type=section&id=StatementsOfOperations) The condensed consolidated statements of operations show a net loss of $6.6 million for Q2 2025, compared to $4.3 million in Q2 2024. Revenue decreased year-over-year, while operating expenses increased significantly due to an impairment charge Condensed Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $5,724 | $6,707 | $10,758 | $11,990 | | Gross profit | $2,511 | $2,757 | $4,633 | $4,152 | | Total operating expenses | $9,074 | $7,200 | $16,049 | $15,097 | | Operating loss | ($6,563) | ($4,443) | ($11,416) | ($10,945) | | Net loss | ($6,562) | ($4,304) | ($11,396) | ($10,580) | | Basic net loss per ordinary share | ($0.58) | ($0.50) | ($1.05) | ($1.23) | [Balance Sheets](index=7&type=section&id=BalanceSheets) The condensed consolidated balance sheets show total assets decreased to $26.8 million as of June 30, 2025, from $30.5 million at December 31, 2024. Cash and cash equivalents also decreased, while goodwill saw a significant reduction due to impairment Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Cash and cash equivalents | $5,139 | $6,746 | | Total current assets | $20,710 | $21,294 | | Goodwill | $4,755 | $7,538 | | Total assets | $26,777 | $30,487 | | Total current liabilities | $10,360 | $10,225 | | Shareholders' equity | $15,110 | $18,849 | [Statements of Cash Flows](index=8&type=section&id=StatementsOfCashFlows) The condensed consolidated statements of cash flows indicate a net cash outflow from operating activities of $9.4 million for the six months ended June 30, 2025, an improvement from $13.3 million in the prior year. Net cash provided by financing activities was $7.8 million, compared to none in the prior year Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | ($9,429) | ($13,290) | | Net cash used in investing activities | ($5) | $0 | | Net cash provided by financing activities | $7,779 | $0 | | Decrease in cash, cash equivalents, and restricted cash | ($1,585) | ($13,305) | | Cash, cash equivalents, and restricted cash at end of period | $5,523 | $15,487 | [Non-GAAP Reconciliations and Supplemental Data](index=9&type=section&id=NonGAAPReconciliationsSupplementalData) This section provides supplemental revenue data by customer location and detailed GAAP to non-GAAP reconciliations for net loss, operating loss, gross profit, and operating expenses [Revenues by Customer Location](index=9&type=section&id=RevenuesByCustomerLocation) Lifeward's revenue breakdown by customer location shows that the United States remains the largest market, though it experienced a decline in Q2 2025 compared to the prior year. Europe also saw a slight decrease, while the Rest of the World segment grew Revenues by Customer Location (in thousands) | Region | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | United States | $3,062 | $3,849 | $6,271 | $7,596 | | Europe | $2,103 | $2,308 | $3,439 | $3,477 | | Asia - Pacific | $124 | $214 | $166 | $394 | | Rest of the world | $435 | $336 | $882 | $523 | | Total Revenues | $5,724 | $6,707 | $10,758 | $11,990 | [Non-GAAP Net Loss Reconciliation](index=9&type=section&id=NonGAAPNetLossReconciliation) The non-GAAP net loss reconciliation adjusts GAAP net loss for items such as amortization of intangible assets, restructuring costs, remeasurement of earnout liability, impairment charges, and stock-based compensation expenses. For Q2 2025, the non-GAAP net loss was $3.5 million, an improvement from $3.6 million in Q2 2024 Non-GAAP Net Loss Reconciliation (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | GAAP net loss | ($6,562) | ($4,304) | ($11,396) | ($10,580) | | Adjustments: | | | | | | Amortization of intangible assets | $0 | $832 | $0 | $1,663 | | Restructuring | $700 | $0 | $700 | $0 | | Remeasurement of earnout liability | ($608) | ($488) | ($608) | ($492) | | Impairment charges | $2,783 | $0 | $2,783 | $0 | | Stock-based compensation expenses | $182 | $376 | $402 | $757 | | Non-GAAP net loss | ($3,505) | ($3,584) | ($8,119) | ($8,883) | | Non-GAAP net loss per share | ($0.31) | ($0.42) | ($0.75) | ($1.03) | [Non-GAAP Operating Loss Reconciliation](index=10&type=section&id=NonGAAPOperatingLossReconciliation) The non-GAAP operating loss reconciliation adjusts GAAP operating loss by adding back non-cash and non-recurring items. For Q2 2025, the non-GAAP operating loss was $3.5 million, an improvement from $3.7 million in Q2 2024 Non-GAAP Operating Loss Reconciliation (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | GAAP operating loss | ($6,563) | ($4,443) | ($11,416) | ($10,945) | | Adjustments: | | | | | | Amortization of intangible assets | $0 | $832 | $0 | $1,663 | | Restructuring | $700 | $0 | $700 | $0 | | Remeasurement of earnout liability | ($608) | ($488) | ($608) | ($492) | | Impairment charges | $2,783 | $0 | $2,783 | $0 | | Stock-based compensation expenses | $182 | $376 | $402 | $757 | | Non-GAAP operating loss | ($3,506) | ($3,723) | ($8,139) | ($9,248) | [Non-GAAP Gross Profit Reconciliation](index=10&type=section&id=NonGAAPGrossProfitReconciliation) Non-GAAP gross profit for Q2 2025 was $2.5 million (44.0% of revenue), compared to $3.1 million (46.9% of revenue) in Q2 2024, after adjusting for amortization of intangible assets and stock-based compensation expenses Non-GAAP Gross Profit Reconciliation (in thousands) | Metric | Three Months Ended June 30, 2025 | % of revenue | Three Months Ended June 30, 2024 | % of revenue | | :-------------------- | :------------------------------- | :----------- | :------------------------------- | :----------- | | GAAP gross profit | $2,511 | 43.9% | $2,757 | 41.1% | | Adjustments: | | | | | | Amortization of intangible assets | $0 | 0% | $383 | 5.7% | | Stock-based compensation expenses | $4 | 0.1% | $5 | 0.1% | | Non-GAAP gross profit | $2,515 | 44.0% | $3,145 | 46.9% | [Non-GAAP Research & Development Reconciliation](index=11&type=section&id=NonGAAPResearchDevelopmentReconciliation) Non-GAAP research and development expenses for Q2 2025 were $0.73 million (12.8% of revenue), a decrease from $1.16 million (17.3% of revenue) in Q2 2024, after adjusting for stock-based compensation Non-GAAP Research & Development Reconciliation (in thousands) | Metric | Three Months Ended June 30, 2025 | % of revenue | Three Months Ended June 30, 2024 | % of revenue | | :-------------------- | :------------------------------- | :----------- | :------------------------------- | :----------- | | GAAP research & development | $767 | 13.4% | $1,205 | 18.0% | | Adjustments: | | | | | | Stock-based compensation expenses | ($37) | (0.6)% | ($46) | (0.7)% | | Non-GAAP research & development | $730 | 12.8% | $1,159 | 17.3% | [Non-GAAP Sales & Marketing Reconciliation](index=11&type=section&id=Non-GAAPSales%26MarketingReconciliation) Non-GAAP sales and marketing expenses for Q2 2025 were $3.45 million (60.3% of revenue), a decrease from $3.91 million (58.3% of revenue) in Q2 2024, after adjustments for amortization, restructuring, and stock-based compensation Non-GAAP Sales & Marketing Reconciliation (in thousands) | Metric | Three Months Ended June 30, 2025 | % of revenue | Three Months Ended June 30, 2024 | % of revenue | | :-------------------- | :------------------------------- | :----------- | :------------------------------- | :----------- | | GAAP sales & marketing | $3,785 | 66.1% | $4,403 | 65.6% | | Adjustments: | | | | | | Amortization of intangible assets | $0 | 0% | ($383) | (5.7)% | | Restructuring | ($277) | (4.8)% | $0 | 0% | | Stock-based compensation expenses | ($56) | (1.0)% | ($107) | (1.6)% | | Non-GAAP sales & marketing | $3,452 | 60.3% | $3,913 | 58.3% | [Non-GAAP General & Administrative Reconciliation](index=11&type=section&id=Non-GAAPGeneralAdministrativeReconciliation) Non-GAAP general and administrative expenses for Q2 2025 were $1.84 million (32.1% of revenue), compared to $1.80 million (26.7% of revenue) in Q2 2024, after adjustments for M&A, amortization, restructuring, earnout liability remeasurement, and stock-based compensation Non-GAAP General & Administrative Reconciliation (in thousands) | Metric | Three Months Ended June 30, 2025 | % of revenue | Three Months Ended June 30, 2024 | % of revenue | | :-------------------- | :------------------------------- | :----------- | :------------------------------- | :----------- | | GAAP general & administrative | $1,739 | 30.4% | $1,592 | 23.7% | | Adjustments: | | | | | | Remeasurement of earnout liability | $608 | 10.6% | $488 | 7.3% | | Restructuring | ($423) | (7.4)% | $0 | 0% | | Stock-based compensation expenses | ($85) | (1.5)% | ($218) | (3.3)% | | Non-GAAP general & administrative | $1,839 | 32.1% | $1,796 | 26.7% |

Core Insights - Lifeward Ltd. reported a record number of ReWalk systems placed for Medicare beneficiaries, marking the third consecutive quarter of growth in the U.S. pipeline with over 130 qualified leads [1][3] - The company appointed a new CEO and CFO to drive strategic changes and accelerate growth [1][7] - Lifeward's financial results for Q2 2025 showed a revenue of $5.7 million, a decrease of approximately 15% year-over-year, but an increase of about 14% compared to Q1 2025 [4][10] Financial Performance - Revenue from traditional products, including ReWalk Personal exoskeletons, decreased by 19% year-over-year to $2.5 million, while revenue from AlterG products fell by approximately 11% to $3.2 million [4][5] - Gross margin improved to 43.9% in Q2 2025 from 41.1% in Q2 2024, although the adjusted gross margin decreased to 44.0% from 46.9% due to the absence of one-time Medicare-related revenue [5][30] - Total operating expenses rose to $9.1 million in Q2 2025, primarily due to a $2.8 million goodwill impairment charge, while adjusted operating expenses decreased to $6.0 million [6][9] Losses and Cash Flow - The operating loss for Q2 2025 was $6.6 million, compared to $4.4 million in Q2 2024, with an adjusted operating loss of $3.5 million [9][10] - The net loss was $6.6 million, or $0.58 per share, compared to a net loss of $4.3 million, or $0.50 per share, in the prior year [10][23] - As of June 30, 2025, Lifeward had $5.1 million in unrestricted cash and cash equivalents, with cash used in operations improving to $3.9 million from $5.6 million in Q2 2024 [11][26] Strategic Developments - Lifeward achieved FDA clearance for the ReWalk 7 in April 2025, with over 20 units installed and positive customer feedback [7] - The company expanded its U.S. payer base for the ReWalk Personal Exoskeleton, with a ruling affirming its medical necessity for Medicare beneficiaries [7] - Lifeward transitioned to in-house manufacturing of the ReWalk Personal Exoskeleton, enhancing cost savings and production flexibility [7][8] Future Guidance - Lifeward has reset its full-year 2025 guidance, targeting revenue between $24 million and $26 million and a non-GAAP net loss of $12 million to $14 million [12]

Core Insights - Lifeward Ltd. has appointed Almog Adar as the new Chief Financial Officer, succeeding his previous role as Vice President of Finance and Chief Accounting Officer [1][3] - The appointment is seen as a strategic move to support the company's growth and strengthen its financial foundation [2][3] Company Overview - Lifeward is a global leader in innovative medical technology aimed at transforming the lives of individuals with physical limitations or disabilities [1][6] - The company designs, develops, and commercializes solutions that provide functional and health benefits in both clinical and home settings [6] - Lifeward's product portfolio includes notable innovations such as the ReWalk Exoskeleton, AlterG Anti-Gravity system, MyoCycle FES System, and ReStore Exo-Suit [6] Leadership Background - Almog Adar joined Lifeward in 2020 and has held various senior roles, contributing to the company's financial strategy and operations [3][4] - Prior to Lifeward, Mr. Adar gained extensive experience in financial management at Infinya Recycling Ltd. and Delta Galil Industries, as well as auditing at Ernst & Young [4][5] - He holds a Bachelor of Arts degree in Accounting and Economics and is a Certified Public Accountant licensed in Israel [5] Strategic Vision - Mr. Adar expressed commitment to enhancing Lifeward's execution and accelerating growth through a disciplined strategy [3] - The company aims to leverage its strengths to create lasting value for patients, customers, and shareholders [3] Company History - Lifeward was founded in 2001 and operates in the United States, Israel, and Germany [7] - The company's mission focuses on relentless innovation to improve the lives of individuals with physical limitations or disabilities [6]