UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to ______ Commission File Number: 001-36612 ReWalk Robotics Ltd. (Exact name of registrant as specified in charter) | Israel | Not applicable | | --- | --- | | ...

Rewalk Robotics Ltd. (RWLK) Q2 2019 Earnings Conference Call August 8, 2019 8:30 AM ET Company Participants Ori Gon - CFO Lawrence Jasinski - CEO & Director Conference Call Participants Swayampakula Ramakanth - H.C. Wainwright & Co. Operator Good morning, ladies and gentlemen, and welcome to the Q2 2019 ReWalk Robotics Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to your host, Mr. Ori Gon, CFO. Please go ahead, sir. Ori Gon Thank you, Tiffany. Good morning, ...

Financial Performance - Total revenue for Q2 2019 was $0.9 million, a decrease of $893 thousand, or 50%, compared to Q2 2018[111] - Revenues decreased by approximately $891 thousand, or 27%, for the six months ended June 30, 2019 compared to the same period in 2018[113] - Personal unit revenues for Q2 2019 were $851 thousand, down from $1.77 million in Q2 2018[113] - Gross profit for Q2 2019 was $435,000, representing 50% of revenue, up from 43% in Q2 2018[115] - Gross profit for the first half of 2019 was $1,361,000, or 55% of revenue, compared to 43% in the same period of 2018[115] - The company anticipates continued net losses and negative cash flow from operations in the near term[109] Unit Sales and Product Development - 14 units were placed during Q2 2019, including 13 ReWalk Personal and 1 ReStore[111] - The number of Personal units placed decreased from 21 in Q2 2018 to 13 in Q2 2019[113] - Future growth is expected to be driven by sales of the ReWalk Personal device and the ReStore device to rehabilitation institutes[114] - The company plans to focus R&D on the ReStore product for stroke patients and future developments for conditions like multiple sclerosis and Parkinson's disease[118] Expenses and Cost Management - Research and development expenses decreased by $37,000, or 2%, for Q2 2019 compared to Q2 2018, and by $774,000, or 19%, for the first half of 2019[117] - Sales and marketing expenses decreased by $394,000, or 20%, for Q2 2019 compared to Q2 2018, and by $1,143,000, or 27%, for the first half of 2019[119] - General and administrative expenses decreased by $942,000, or 42%, for Q2 2019 compared to Q2 2018, and by $1,479,000, or 35%, for the first half of 2019[121] - Financial expenses, net, decreased by $169,000, or 32%, for Q2 2019 compared to Q2 2018, and by $236,000, or 23%, for the first half of 2019[122] Cash Flow and Financing - As of June 30, 2019, the company had cash and cash equivalents of $24 million and an accumulated deficit of approximately $162 million[129] - The company will need to seek additional financing if cash requirements exceed current estimates over the next 12 months[133] - Net cash used in operating activities decreased to $7.956 million for the six months ended June 30, 2019, compared to $9.068 million for the same period in 2018, primarily due to a reduction in operating costs offset by changes in working capital[161] - Net cash provided by financing activities increased to $22.473 million for the six months ended June 30, 2019, compared to $3.579 million for the same period in 2018, primarily due to higher proceeds from equity raise activities[162] - The company intends to continue using at-the-market offerings opportunistically to raise additional funds, subject to limitations under Form S-3[156] Debt and Obligations - The Company agreed to repay $3.6 million to Kreos, which included prepayment costs and end of loan payments, by issuing 192,000 units and 288,000 pre-funded units[139] - As of June 30, 2019, the outstanding principal amount under the Kreos Loan Agreement was $7.9 million[141] - Total contractual obligations as of June 30, 2019, amounted to $16.702 million, with $7.956 million due within one year[164] - The company has purchase obligations totaling $1.353 million, primarily dependent on a contract manufacturer for production[164] Fundraising Activities - The Company raised $20.2 million in gross proceeds from several fundraising events[111] - The Company raised approximately $13.1 million in gross proceeds from its follow-on public offering on November 20, 2018, selling 728,019 units at $7.5 per unit and 1,050,373 pre-funded units at $7.25 per unit[146] - The Company entered into a public offering of 760,000 ordinary shares at a price of $5.75 per share, generating total gross proceeds of $4.37 million on February 15, 2019[148] - The Company signed a purchase agreement for the issuance of 816,914 ordinary shares at $5.2025 per share, raising approximately $4.25 million on April 3, 2019[149] - As of June 30, 2019, the Company had sold 302,092 ordinary shares under the ATM Offering Program for net proceeds of $14.5 million[154] - The Company issued warrants to purchase up to 1,464,665 ordinary shares with an exercise price of $7.50 per share in June 2019[150] - The Company entered into a purchase agreement for the issuance of 833,334 ordinary shares at $6.00 per share and warrants to purchase up to 416,667 ordinary shares at the same price on June 12, 2019[151] - The Company has been subject to limitations under Form S-3, restricting capital raises to approximately $13.1 million in any 12-month period due to a public float of less than $75 million[142] - The company has incurred total expenses of approximately $1,171 thousand in connection with the ATM Offering Program as of June 30, 2019[154] Market Expansion Efforts - The company is currently in discussions with RealCan to explore alternative pathways for commercializing products in China, indicating ongoing efforts to penetrate this key market[159]

[General and Where You Can Find Other Information](index=4&type=section&id=General%20and%20Where%20You%20Can%20Find%20Other%20Information) This section defines company terms and directs readers to where they can access public filings and reports - The report defines **'ReWalk,' 'we,' 'us,' and 'our' as ReWalk Robotics Ltd. and its subsidiaries**. Information regarding the company's **annual reports (Form 10-K)**, **quarterly reports (Form 10-Q)**, **current reports (Form 8-K)**, and any amendments or exhibits are available for download, free of charge, on the company's website (www.rewalk.com) and the SEC's website (http://www.sec.gov)[8](index=8&type=chunk) [PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This part presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition [ITEM 1. FINANCIAL STATEMENTS (unaudited)](index=5&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(unaudited)) This section presents the unaudited condensed consolidated financial statements for ReWalk Robotics Ltd. and its subsidiaries, including balance sheets, statements of operations, changes in shareholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, commitments, and recent financial activities [CONDENSED CONSOLIDATED BALANCE SHEETS](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and shareholders' equity at specific points in time CONDENSED CONSOLIDATED BALANCE SHEETS | Metric | March 31, 2019 (in thousands) | December 31, 2018 (in thousands) | Change (YoY) | | :-------------------------------- | :---------------------------- | :----------------------------- | :----------- | | Cash and cash equivalents | $8,862 | $9,546 | -$684 | | Total current assets | $13,414 | $13,237 | +$177 | | Total long-term assets | $3,622 | $1,725 | +$1,897 | | **Total assets** | **$17,036** | **$14,962** | **+$2,074** | | Total current liabilities | $7,271 | $5,382 | +$1,889 | | Total long-term liabilities | $7,710 | $7,635 | +$75 | | **Total liabilities** | **$14,981** | **$13,017** | **+$1,964** | | Total shareholders' equity | $2,055 | $1,945 | +$110 | - Operating lease right-of-use assets were initially recognized at **$1,994 thousand** as of March 31, 2019, reflecting the adoption of **ASU 2016-02**[10](index=10&type=chunk) - Issued and outstanding ordinary shares increased from **2,813,087** at December 31, 2018, to **3,695,174** at March 31, 2019, reflecting a **one-for-twenty-five reverse share split** effective April 1, 2019, with all prior periods adjusted retroactively[12](index=12&type=chunk)[13](index=13&type=chunk) [CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) This section outlines the company's financial performance over a period, presenting revenues, expenses, and net loss CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | Metric | Three Months Ended March 31, 2019 (in thousands) | Three Months Ended March 31, 2018 (in thousands) | Change (YoY) | | :-------------------------- | :-------------------------------- | :-------------------------------- | :----------- | | Revenues | $1,581 | $1,579 | +$2 | | Cost of revenues | $655 | $897 | -$242 | | Gross profit | $926 | $682 | +$244 | | Total operating expenses | $4,501 | $6,524 | -$2,023 | | Operating loss | $(3,575) | $(5,842) | +$2,267 | | Net loss | $(4,000) | $(6,327) | +$2,327 | | Net loss per ordinary share | $(1.25) | $(5.26) | +$4.01 | - **Gross profit margin improved to 59%** in Q1 2019, up from **43%** in Q1 2018[106](index=106&type=chunk)[109](index=109&type=chunk) - **Total operating expenses decreased by $2,023 thousand, or 31%**, year-over-year[14](index=14&type=chunk) [CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIENCY)](index=8&type=section&id=CONDENSED%20STATEMENTS%20OF%20CHANGES%20IN%20SHAREHOLDERS'%20EQUITY%20(DEFICIENCY)) This section details the changes in the company's shareholders' equity over a period, reflecting share issuances, net loss, and other equity adjustments CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIENCY) | Metric | March 31, 2019 (in thousands) | December 31, 2018 (in thousands) | | :-------------------------- | :---------------------------- | :----------------------------- | | Ordinary Share Amount | $253 | $193 | | Additional paid-in capital | $158,720 | $154,670 | | Accumulated deficit | $(156,918) | $(152,918) | | Total shareholders' equity | $2,055 | $1,945 | - The company **issued ordinary shares in a 'best efforts' offering**, contributing **$3,684 thousand** to equity in Q1 2019[16](index=16&type=chunk) - **Exercise of pre-funded warrants and warrants generated $107 thousand** in additional proceeds in Q1 2019[16](index=16&type=chunk) [CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS](index=9&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) This section reports the cash generated and used by the company across its operating, investing, and financing activities CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | Metric | Three Months Ended March 31, 2019 (in thousands) | Three Months Ended March 31, 2018 (in thousands) | Change (YoY) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :----------- | | Net cash used in operating activities | $(4,253) | $(5,026) | +$773 | | Net cash used in investing activities | $0 | $0 | $0 | | Net cash provided by (used in) financing activities | $3,580 | $(729) | +$4,309 | | Decrease in cash, cash equivalents, and restricted cash | $(673) | $(5,755) | +$5,082 | | Cash, cash equivalents, and restricted cash at end of period | $9,674 | $9,668 | +$6 | - **Net cash used in operating activities decreased by $773 thousand**, primarily due to reduced operating costs and changes in working capital[155](index=155&type=chunk) - **Net cash provided by financing activities increased significantly to $3.6 million**, compared to **$729 thousand** used in the prior year, mainly due to proceeds from the **'best efforts' offering** in Q1 2019[156](index=156&type=chunk) [NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=10&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section provides detailed explanations and additional information supporting the condensed consolidated financial statements [NOTE 1:- GENERAL](index=10&type=section&id=NOTE%201:-%20GENERAL) This note provides an overview of ReWalk Robotics Ltd., its products, and highlights the going concern uncertainty due to accumulated deficits - **ReWalk Robotics Ltd.** designs, develops, and commercializes the **ReWalk system**, an exoskeleton for wheelchair-bound individuals, with two product types: **ReWalk Personal** for home use and **ReWalk Rehabilitation** for clinical settings[22](index=22&type=chunk) - The company authorized a **1-for-25 reverse share split** on March 27, 2019, effective April 1, 2019, retroactively adjusting all share and per share amounts[22](index=22&type=chunk) - As of March 31, 2019, the company had an **accumulated deficit of approximately $157 million** and **negative cash flow from operations of $4.3 million**, raising substantial doubt about its ability to continue as a **going concern**[23](index=23&type=chunk) [NOTE 2:- UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=11&type=section&id=NOTE%202:-%20UNAUDITED%20INTERIM%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This note clarifies the basis of preparation for the unaudited interim financial statements and their indicative nature - The accompanying interim financial statements are **unaudited, prepared in accordance with U.S. GAAP and PCAOB standards** for interim information, and include all necessary adjustments for fair presentation[26](index=26&type=chunk) - The results for the three months ended March 31, 2019, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2019[26](index=26&type=chunk) [NOTE 3:- SIGNIFICANT ACCOUNTING POLICIES](index=11&type=section&id=NOTE%203:-%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note details the key accounting policies applied in preparing the financial statements, including revenue recognition and lease accounting Disaggregation of Revenues (in thousands) | Category | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :---------------------- | :-------------------------------- | :-------------------------------- | | Units placed | $1,474 | $1,528 | | Spare parts and warranties | $107 | $51 | | **Total Revenues** | **$1,581** | **$1,579** | - The company adopted **ASU 2016-02, Leases (Topic 842)**, effective January 1, 2019, recognizing **right-of-use assets of $2,099 thousand** and corresponding **lease liabilities of $2,249 thousand** upon adoption[37](index=37&type=chunk)[41](index=41&type=chunk) - This adoption **did not materially impact the statements of operations or cash flows**[37](index=37&type=chunk)[41](index=41&type=chunk) Warranty Provision (in thousands) | Metric | US Dollars (in thousands) | | :---------------------- | :------------------------ | | Balance at December 31, 2018 | $304 | | Provision | $88 | | Usage | $(103) | | Balance at March 31, 2019 | $289 | [NOTE 4:- INVENTORIES](index=15&type=section&id=NOTE%204:-%20INVENTORIES) This note provides a breakdown of the company's inventory components, including finished products and raw materials Inventories (in thousands) | Component | March 31, 2019 | December 31, 2018 | | :---------------- | :------------- | :---------------- | | Finished products | $2,086 | $2,240 | | Raw materials | $392 | $0 | | **Total** | **$2,478** | **$2,240** | [NOTE 5:- COMMITMENTS AND CONTINGENT LIABILITIES](index=15&type=section&id=NOTE%205:-%20COMMITMENTS%20AND%20CONTINGENT%20LIABILITIES) This note outlines the company's contractual obligations, lease commitments, contingent liabilities, and ongoing legal proceedings - **Non-cancelable outstanding purchase obligations amounted to approximately $323 thousand** as of March 31, 2019[48](index=48&type=chunk) Future Lease Payments (in thousands) | Year | Amount | | :--- | :----- | | 2019 | $524 | | 2020 | $638 | | 2021 | $613 | | 2022 | $566 | | 2023 | $439 | | Total lease payments | $2,780 | | Present value of future lease payments | $2,143 | - The company has a contingent liability to the **Israel Innovation Authority (IIA)** amounting to **$1.5 million** as of March 31, 2019, related to **royalty-bearing grants**[50](index=50&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk) - **Royalties expenses of $3 thousand** were recorded in Q1 2019[50](index=50&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk) - An ongoing **shareholder class action lawsuit** in the U.S. District Court for the District of Massachusetts, alleging violations of the Securities Act and Exchange Act, has seen partial dismissal of claims[57](index=57&type=chunk)[58](index=58&type=chunk) - The company is currently **unable to reasonably estimate a possible loss**, and **no litigation reserve has been recorded**[57](index=57&type=chunk)[58](index=58&type=chunk) [NOTE 6:- RESEARCH COLLABORATION AGREEMENT AND LICENSE AGREEMENT](index=18&type=section&id=NOTE%206:-%20RESEARCH%20COLLABORATION%20AGREEMENT%20AND%20LICENSE%20AGREEMENT) This note describes the company's agreements with Harvard for developing soft suit exoskeleton technologies and related payment obligations - The company has a **Research Collaboration Agreement and an Exclusive License Agreement with Harvard**, **extended to May 16, 2022**, for developing **lightweight 'soft suit' exoskeleton system technologies**[59](index=59&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk) - **Total payment obligation under these agreements is $6.6 million**, with **$243 thousand recorded as research and development expenses** for Q1 2019[62](index=62&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk) - The **first milestone has been achieved**[62](index=62&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk) [NOTE 7:- SHAREHOLDERS' EQUITY](index=18&type=section&id=NOTE%207:-%20SHAREHOLDERS'%20EQUITY) This note details changes in shareholders' equity, including share splits, public offerings, and the status of the Timwell Investment Agreement - A **1-for-25 reverse share split became effective on April 1, 2019**, changing **authorized ordinary shares from 250,000,000 to 60,000,000 and par value to NIS 0.25**[65](index=65&type=chunk) Share-based Compensation Expense (in thousands) | Category | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Cost of revenues | $4 | $4 | | Research and development, net | $61 | $114 | | Sales and marketing | $72 | $155 | | General and administrative | $182 | $523 | | **Total** | **$319** | **$796** | - The company **raised $4.37 million in gross proceeds from a February 2019 public offering of 760,000 ordinary shares at $5.75 per share**[80](index=80&type=chunk)[81](index=81&type=chunk) - The **remaining $15 million from the Timwell Investment Agreement (Second and Third Tranches) is at significant risk of not closing** due to negotiation issues, leading the company to evaluate alternative pathways for the Chinese market[82](index=82&type=chunk)[83](index=83&type=chunk) [NOTE 8:- FINANCIAL EXPENSES, NET](index=24&type=section&id=NOTE%208:-%20FINANCIAL%20EXPENSES,%20NET) This note provides a breakdown of financial expenses, net, primarily related to foreign currency transactions and loan interest Financial Expenses, Net (in thousands) | Component | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Foreign currency transactions and other | $3 | $(19) | | Financial expenses related to loan agreement with Kreos | $404 | $495 | | Bank commissions | $11 | $9 | | **Total Financial expenses, net** | **$418** | **$485** | - **Financial expenses, net, decreased by $67 thousand (14%) year-over-year**, mainly due to **less interest expenses attributable to the Loan Agreement with Kreos**[117](index=117&type=chunk) [NOTE 9:- GEOGRAPHIC INFORMATION AND MAJOR CUSTOMER AND PRODUCT DATA](index=24&type=section&id=NOTE%209:-%20GEOGRAPHIC%20INFORMATION%20AND%20MAJOR%20CUSTOMER%20AND%20PRODUCT%20DATA) This note presents revenue and long-lived asset data disaggregated by geographic region and identifies major customer contributions Revenues by Customer's Location (in thousands) | Region | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :------------ | :-------------------------------- | :-------------------------------- | | United States | $497 | $1,178 | | Europe | $1,079 | $341 | | Asia-Pacific | $5 | $2 | | Latin America | $0 | $58 | | **Total** | **$1,581** | **$1,579** | Long-lived Assets by Geographic Region (in thousands) | Region | March 31, 2019 | December 31, 2018 | | :------ | :------------- | :---------------- | | Israel | $193 | $206 | | United States | $279 | $330 | | Germany | $60 | $90 | | **Total** | **$532** | **$626** | - **Major customer data shows Customer A accounted for 37.2% of total revenues in Q1 2018 but less than 10% in Q1 2019**, while **Customer B accounted for 12.9% in Q1 2019**[87](index=87&type=chunk) [NOTE 10:- SUBSEQUENT EVENTS](index=25&type=section&id=NOTE%2010:-%20SUBSEQUENT%20EVENTS) This note discloses significant events occurring after the balance sheet date, including a reverse share split and a registered direct offering - The **1-for-25 reverse share split became effective on April 1, 2019**[88](index=88&type=chunk) - On April 5, 2019, the company closed a **registered direct offering, issuing 816,914 ordinary shares at $5.2025 per share** and **warrants to purchase up to 408,457 ordinary shares at an exercise price of $5.14**, **generating approximately $4.25 million in gross proceeds**[89](index=89&type=chunk)[90](index=90&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=26&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on the company's financial condition and operational results, covering revenue, expenses, liquidity, and key business highlights [Special Note Regarding Forward-Looking Statements](index=26&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) This section cautions readers about forward-looking statements, outlining inherent risks and the company's non-obligation to update them - The report contains **forward-looking statements** based on management's beliefs and assumptions, which are subject to important factors that could cause actual results to differ materially[93](index=93&type=chunk)[95](index=95&type=chunk) - Key risks include the ability to **secure capital, maintain Nasdaq listing, achieve reimbursement, develop new products, and manage litigation**[94](index=94&type=chunk)[98](index=98&type=chunk) - The company undertakes no obligation to publicly update any **forward-looking statements**[97](index=97&type=chunk) [Overview](index=28&type=section&id=Overview) This section provides a general description of ReWalk Robotics' products, reimbursement efforts, and ongoing financial challenges including net losses - **ReWalk Robotics** develops and commercializes robotic exoskeletons (**ReWalk Personal** and **ReWalk Rehabilitation**) and is developing a **lightweight 'soft suit' exoskeleton** for various lower limb disabilities[99](index=99&type=chunk) - Reimbursement efforts include a **VA national policy for veterans (19 units placed as of March 31, 2019)** and **coverage decisions from German insurers**[100](index=100&type=chunk)[101](index=101&type=chunk) - The company has **incurred net losses and negative cash flow from inception**, expecting this to continue, and plans to focus resources on regulatory activities for **ReStore**, commercialization, and reimbursement coverage[102](index=102&type=chunk) [First Quarter 2019 and Subsequent Period Business Highlights](index=29&type=section&id=First%20Quarter%202019%20and%20Subsequent%20Period%20Business%20Highlights) This section highlights key business achievements and financial performance for Q1 2019, including revenue, gross margin, and product launch progress - **Total revenue for Q1 2019 was $1.6 million**, with **gross margin improving to 59% from 43%** in the prior year quarter[106](index=106&type=chunk) - **14 units were placed in Q1 2019**, with **strong sales in Europe ($1.1 million, 10 units placed, 5 rented units converted to purchases)**[106](index=106&type=chunk) - The company is **on track to launch ReStore in the United States and Europe in late Q2 or Q3 2019**, pending regulatory clearances, and has **regained compliance with Nasdaq listing requirements** after fundraising and a reverse split[106](index=106&type=chunk) [Three Months Ended March 31, 2019 Compared to Three Months Ended March 31, 2018](index=29&type=section&id=Three%20Months%20Ended%20March%2031,%202019%20Compared%20to%20Three%20Months%20Ended%20March%2031,%202018) This section provides a detailed comparative analysis of the company's financial performance for the first quarter of 2019 versus 2018 [Revenues](index=30&type=section&id=Revenues_MD%26A) This section analyzes the company's revenue performance, detailing unit placements and revenue sources for the comparative periods Revenue Performance (in thousands, except unit amounts) | Metric | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | Change (YoY) | | :---------------------- | :-------------------------------- | :-------------------------------- | :----------- | | Personal units placed | 14 | 22 | -8 | | Rehabilitation units placed | 0 | 1 | -1 | | Total units placed | 14 | 23 | -9 | | Personal unit revenues | $1,546 | $1,499 | +$47 | | Rehabilitation unit revenues | $0 | $80 | -$80 | | Other revenues | $35 | $0 | +$35 | | **Total Revenues** | **$1,581** | **$1,579** | **+$2** | - **Revenues remained flat year-over-year at $1.6 million**, with **other revenues in Q1 2019 associated with usage of ReStore clinical trial units**[107](index=107&type=chunk) - **Future growth is expected to be driven by sales of ReWalk Personal devices to third-party payors and ReStore devices to rehabilitation institutes**[108](index=108&type=chunk) [Gross Profit](index=30&type=section&id=Gross%20Profit_MD%26A) This section discusses the company's gross profit and gross margin trends, attributing changes to sales mix and future expectations Gross Profit (in thousands) | Metric | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | Change (YoY) | | :---------- | :-------------------------------- | :-------------------------------- | :----------- | | Gross profit | $926 | $682 | +$244 | | Gross margin | 59% | 43% | +16 ppts | - The **increase in gross profit was mainly driven by a higher average selling price due to a change in sales mix**[109](index=109&type=chunk) - **Gross profit is expected to remain at current levels and potentially improve with increased sales volumes and decreased manufacturing costs**, though this may be partially offset by lower margins from the new **ReStore** device and increased product part costs[110](index=110&type=chunk) [Research and Development Expenses](index=31&type=section&id=Research%20and%20Development%20Expenses_MD%26A) This section analyzes changes in R&D expenses, focusing on cost reductions and future development priorities for new products Research and Development Expenses (in thousands) | Metric | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Research and development expenses, net | $1,414 | $2,151 | - **R&D expenses decreased by $737 thousand, or 34%**, primarily due to **decreased costs associated with the development and clinical study of the ReStore soft suit exoskeleton**[112](index=112&type=chunk) - Near-term R&D focus is on the **ReStore system for stroke patients**, and longer-term on a **'soft suit' exoskeleton for additional indications and the next generation of the ReWalk device**[113](index=113&type=chunk) [Sales and Marketing Expenses](index=31&type=section&id=Sales%20and%20Marketing%20Expenses_MD%26A) This section examines the decrease in sales and marketing expenses due to cost reduction efforts and outlines future commercialization focus Sales and Marketing Expenses (in thousands) | Metric | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :------------------------ | :-------------------------------- | :-------------------------------- | | Sales and marketing expenses | $1,587 | $2,336 | - **Sales and marketing expenses decreased by $749 thousand, or 32%**, driven by **lower personnel and personnel-related costs and consulting expenses due to cost reduction efforts**[114](index=114&type=chunk) - Near-term sales and marketing expenses are expected to be driven by efforts to commercialize the **ReStore** device and increase reimbursement for the **ReWalk Personal** device[115](index=115&type=chunk) [General and Administrative Expenses](index=31&type=section&id=General%20and%20Administrative%20Expenses_MD%26A) This section details the reduction in general and administrative expenses, primarily due to lower compensation costs in the prior year General and Administrative Expenses (in thousands) | Metric | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | General and administrative | $1,500 | $2,037 | - **General and administrative expenses decreased by $537 thousand, or 26%**, primarily due to cash and non-cash compensation recorded in Q1 2018 related to severance accrual for the company's former chief financial officer[116](index=116&type=chunk) [Financial Expenses, Net](index=32&type=section&id=Financial%20Expenses,%20Net_MD%26A) This section analyzes the decrease in net financial expenses, mainly attributed to reduced interest costs from the Kreos Loan Agreement Financial Expenses, Net (in thousands) | Metric | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :---------------------- | :-------------------------------- | :-------------------------------- | | Financial expenses, net | $418 | $485 | - **Financial expenses, net, decreased by $67 thousand, or 14%**, mainly due to **less interest expenses attributable to the Loan Agreement with Kreos**[117](index=117&type=chunk) [Income Taxes](index=32&type=section&id=Income%20Taxes_MD%26A) This section reports the company's income tax expense for the period, noting a slight increase compared to the prior year Income Taxes (in thousands) | Metric | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :---------- | :-------------------------------- | :-------------------------------- | | Income taxes | $7 | $0 | - **Income taxes increased by $7 thousand** for Q1 2019 compared to zero in the prior year period[118](index=118&type=chunk) [Critical Accounting Policies and Estimates](index=32&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section confirms no material changes to critical accounting policies, referencing updates in the financial statements notes - There have been **no material changes to the company's critical accounting policies or judgments from the information provided in the 2018 Form 10-K**, except for updates in Note 3 of the current report's financial statements[120](index=120&type=chunk) [Recent Accounting Pronouncements](index=32&type=section&id=Recent%20Accounting%20Pronouncements) This section directs readers to Note 3 for information regarding the adoption of new accounting pronouncements - **Information regarding new accounting pronouncements is provided in Note 3** to the unaudited condensed consolidated financial statements[121](index=121&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, financing plans, and the substantial doubt about its ability to continue as a going concern [Sources of Liquidity and Outlook](index=33&type=section&id=Sources%20of%20Liquidity%20and%20Outlook) This section outlines the company's current cash position, future financing plans, and the unreliability of the Timwell Investment Agreement - As of March 31, 2019, the company had **$8.9 million in cash and cash equivalents**, but an **accumulated deficit of approximately $157 million and anticipated further losses raise substantial doubt about its ability to continue as a going concern**[124](index=124&type=chunk) - The company plans to **finance operating costs over the next twelve months using existing cash, reduced operating spend, issuances under its ATM Offering Program, and other future equity and debt securities**[125](index=125&type=chunk) - The **Investment Agreement with Timwell is no longer considered a reliable source of ongoing liquidity**, with a **significant risk that the remaining $15.0 million of issuances will not close**[126](index=126&type=chunk) [Loan Agreement with Kreos and Related Warrant to Purchase Ordinary Shares](index=34&type=section&id=Loan%20Agreement%20with%20Kreos%20and%20Related%20Warrant%20to%20Purchase%20Ordinary%20Shares) This section details the company's loan agreement with Kreos Capital, including interest rates, repayment schedules, and outstanding principal - The company has a **$20 million loan agreement with Kreos Capital**, with an **interest rate of 10.75% per year**, **secured by a first priority security interest over all company assets**[130](index=130&type=chunk) - A **Second Amendment in November 2018 resulted in the repayment of a $3.0 million Kreos Convertible Note** and a **revised repayment schedule for the remaining loan principal**[132](index=132&type=chunk)[135](index=135&type=chunk) - As of March 31, 2019, the **outstanding principal amount under the Kreos Loan Agreement was $8.3 million**[136](index=136&type=chunk) [Equity Raises](index=35&type=section&id=Equity%20Raises) This section summarizes the company's history of equity raises, including IPO, ATM programs, and public offerings, and discusses limitations - The company has conducted several equity raises, including an **IPO ($36.3 million net proceeds in Sept 2014)**, an **ATM Offering Program (up to $25 million)**, and **various follow-on public offerings (e.g., $13.1 million gross in Nov 2018, $4.37 million gross in Feb 2019, $4.25 million gross in April 2019)**[137](index=137&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk) - **Due to Form S-3 limitations, the company can only sell approximately $8.5 million in primary offerings under Form S-3 in any 12-month period while its public float is less than $75 million**[143](index=143&type=chunk) - **Future capital raises may require more costly or time-consuming methods like Form S-1 registration statements or private placements, which could result in substantial shareholder dilution**[144](index=144&type=chunk) [ATM Offering Program](index=36&type=section&id=ATM%20Offering%20Program) This section describes the company's at-the-market equity offering program, including sales, proceeds, and temporary suspension - Under the **Equity Distribution Agreement with Piper Jaffray**, the company may sell up to **$25.0 million in ordinary shares**, with **Piper Jaffray receiving a 3.0% fixed commission rate**[145](index=145&type=chunk)[146](index=146&type=chunk) - As of March 31, 2019, **302,092 ordinary shares were sold under the program for $14.5 million in net proceeds**[147](index=147&type=chunk) - The **program was temporarily suspended on February 20, 2019**[147](index=147&type=chunk) - **Recent agreements impose restrictions on certain equity/debt issuances for six months after April 5, 2019, and February 25, 2019, with specific conditions for ATM sales**[148](index=148&type=chunk) [Timwell Private Placement](index=37&type=section&id=Timwell%20Private%20Placement) This section details the Timwell Investment Agreement, highlighting the significant risk to the remaining tranches and alternative market strategies - The **$20 million Investment Agreement with Timwell Corporation involved three tranches**, with the **first tranche ($5 million for 160,000 shares) closing on May 15, 2018**[150](index=150&type=chunk)[151](index=151&type=chunk) - The **remaining $15 million from the Second and Third Tranches are at significant risk of not closing** due to negotiation issues on definitive joint venture and license agreements[152](index=152&type=chunk) - The company is **evaluating alternative pathways with RealCan (Timwell's affiliate) or other groups to commercialize products in the Chinese market**[152](index=152&type=chunk) [Cash Flows for the Three Months Ended March 31, 2019 and March 31, 2018](index=37&type=section&id=Cash%20Flows%20for%20the%20Three%20Months%20Ended%20March%2031,%202019%20and%20March%2031,%202018) This section provides a comparative analysis of cash flows from operating and financing activities for the specified periods [Net Cash Used in Operating Activities](index=39&type=section&id=Net%20Cash%20Used%20in%20Operating%20Activities) This section analyzes the decrease in net cash used in operating activities, primarily due to a reduction in operating costs and changes in working capital Net Cash Used in Operating Activities (in thousands) | Metric | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(4,253) | $(5,026) | - **Net cash used in operating activities decreased by $773 thousand**, primarily due to a reduction in operating costs and changes in working capital[155](index=155&type=chunk) [Net Cash Provided by (Used in) Financing Activities](index=39&type=section&id=Net%20Cash%20Provided%20by%20(Used%20in)%20Financing%20Activities) This section details the significant increase in net cash provided by financing activities, driven by proceeds from a public offering Net Cash Provided by (Used in) Financing Activities (in thousands) | Metric | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net cash provided by (used in) financing activities | $3,580 | $(729) | - **Net cash provided by financing activities increased to $3.6 million**, compared to **$729 thousand** used in the prior year, primarily due to **higher proceeds from the 'best efforts' offering in Q1 2019**[156](index=156&type=chunk) [Obligations and Commercial Commitments](index=39&type=section&id=Obligations%20and%20Commercial%20Commitments) This section presents a table of the company's contractual obligations, including purchase, lease, and debt commitments Contractual Obligations as of March 31, 2019 (in thousands) | Contractual obligations | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | | :---------------------- | :------- | :--------------- | :-------- | :-------- | :---------------- | | Purchase obligations | $323 | $323 | $0 | $0 | $0 | | Collaboration Agreement and License Agreement obligations | $2,888 | $925 | $1,763 | $200 | $0 | | Operating lease obligations | $2,780 | $686 | $1,232 | $862 | $0 | | Long-term debt obligations | $10,290 | $3,990 | $6,300 | $0 | $0 | | **Total** | **$16,281** | **$5,924** | **$9,295** | **$1,062** | **$0** | - **Collaboration Agreement and License Agreement obligations exclude contingent milestone payments**, which are not included due to their uncertain achievement and timing[160](index=160&type=chunk) [Off-Balance Sheet Arrangements](index=39&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms the absence of any off-balance sheet arrangements or third-party guarantees for the company - The company had **no off-balance sheet arrangements or guarantees of third-party obligations** as of March 31, 2019[160](index=160&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=40&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section states that there have been no material changes to the company's market risk during the first quarter of 2019, referring to the 2018 Form 10-K for a detailed discussion of market risk exposure - There have been **no material changes to the company's market risk during the first quarter of 2019**[161](index=161&type=chunk) - For a discussion of market risk exposure, refer to Part II, Item 7A of the **2018 Form 10-K**[161](index=161&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=40&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) This section details the company's disclosure controls and procedures, confirming their effectiveness as evaluated by management, and reports no material changes in internal control over financial reporting during the quarter [Disclosure Controls and Procedures](index=40&type=section&id=Disclosure%20Controls%20and%20Procedures) This section confirms management's evaluation of disclosure controls and procedures, concluding their effectiveness for timely and accurate reporting - **Management, including the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of disclosure controls and procedures as of March 31, 2019**[163](index=163&type=chunk) - Based on this evaluation, they concluded that the **disclosure controls and procedures were effective in ensuring timely and accurate reporting of information required by the Exchange Act**[163](index=163&type=chunk) [Changes in Internal Control over Financial Reporting](index=40&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports no material changes in internal control over financial reporting during the quarter ended March 31, 2019 - During the quarter ended March 31, 2019, there were **no changes in internal control over financial reporting that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting**[164](index=164&type=chunk) [PART II - OTHER INFORMATION](index=41&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This part provides additional information beyond the financial statements, including legal proceedings, risk factors, and exhibits [ITEM 1. LEGAL PROCEEDINGS](index=41&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This section states that there have been no material changes to the company's legal proceedings from those described in its 2018 Form 10-K, except as detailed in Note 5 of the condensed consolidated financial statements - **No material changes to legal proceedings from the 2018 Form 10-K, except as described in Note 5 of the condensed consolidated financial statements**[167](index=167&type=chunk) [ITEM 1A. RISK FACTORS](index=41&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section updates the company's risk factors, including going concern issues, funding limitations, Nasdaq compliance, and regulatory challenges - The company faces **substantial doubt about its ability to continue as a going concern** due to an **accumulated deficit of approximately $157 million** and the need for additional financing[169](index=169&type=chunk) - **Limitations under Form S-3 restrict primary offerings to approximately $8.5 million in any 12-month period**, and **recent agreements impose further restrictions on certain equity/debt issuances for six months**[170](index=170&type=chunk)[171](index=171&type=chunk) - Despite **regaining compliance with Nasdaq's $2.5 million shareholders' equity requirement**, the **company's listing remains subject to ongoing monitoring, with a risk of delisting if compliance is not maintained**[175](index=175&type=chunk)[176](index=176&type=chunk) - The **1:25 reverse share split, effective April 1, 2019, has seen the market price of ordinary shares fall substantially post-split**, potentially affecting market capitalization and liquidity[179](index=179&type=chunk) - The **ongoing mandatory FDA postmarket surveillance study for the ReWalk Personal 6.0 is experiencing 'inadequate' enrollment progress**, which **could lead to FDA enforcement actions, including marketing limitations or a requirement to stop marketing the device**[196](index=196&type=chunk)[197](index=197&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=48&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section confirms that there are no unregistered sales of equity securities or use of proceeds that have not been previously disclosed in a Current Report on Form 8-K - There are **no transactions regarding unregistered sales of equity securities or use of proceeds that have not been previously included in a Current Report on Form 8-K**[198](index=198&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=48&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) This section states that there are no defaults upon senior securities to report - **This item is not applicable**[199](index=199&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=48&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This section states that there are no mine safety disclosures to report - **This item is not applicable**[200](index=200&type=chunk) [ITEM 5. OTHER INFORMATION](index=48&type=section&id=ITEM%205.%20OTHER%20INFORMATION) This section states that there is no other information to report - **This item is not applicable**[201](index=201&type=chunk) [ITEM 6. EXHIBITS](index=49&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed as part of the Form 10-Q, including various agreements, certifications, and XBRL documents - The **exhibits include the form of placement agent warrant and securities purchase agreement related to the February 2019 public offering, certifications from principal executive and financial officers (Sarbanes-Oxley Act), and XBRL instance and taxonomy documents**[202](index=202&type=chunk) [SIGNATURES](index=50&type=section&id=SIGNATURES) This section confirms the official signing of the report by the Chief Executive Officer and Chief Financial Officer - The **report is duly signed on behalf of ReWalk Robotics Ltd. by Larry Jasinski, Chief Executive Officer, and Ori Gon, Chief Financial Officer, on May 8, 2019**[206](index=206&type=chunk)

Rewalk Robotics Ltd (RWLK) Q1 2019 Earnings Conference Call May 7, 2019 8:30 AM ET Company Participants Ori Gon - CFO Lawrence Jasinski - CEO & Director Conference Call Participants Swayampakula Ramakanth - H.C. Wainwright & Co. Operator Good day, ladies and gentlemen, and welcome to the First Quarter 2019 ReWalk Robotics Ltd. Earnings Conference Call. [Operator Instructions]. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's call, Mr. Ori Gon, Chief ...

Financial Data and Key Metrics Changes - In Q4 2018, the company reported revenue of $1.6 million, with a total revenue of $6.5 million for the full year [7][15] - The net loss for Q4 2018 was $5 million, an improvement from a net loss of $6.2 million in Q4 2017. The full year net loss was $21.7 million compared to $24.7 million in 2017 [19] - Gross margin for Q4 2018 was 39%, with an adjusted margin over 50% excluding a one-time expense [17] Business Line Data and Key Metrics Changes - The company placed 19 units in Q4 2018, with 15 units in Europe and 4 in the U.S. For the full year, 85 units were placed, with 42 in the U.S. and 40 in Europe [15] - The ReStore system for stroke patients is set to launch, with a 510(k) submission to the FDA imminent and a potential launch in late Q2 or Q3 2019 [11][12] Market Data and Key Metrics Changes - In Germany, the company achieved a reimbursement model, resulting in $1.24 million in revenue and 15 placed devices in Q4 2018 [7][8] - The U.S. market remains challenging due to reimbursement issues, but there is a strong backlog of demand for ReWalk devices [9][10] Company Strategy and Development Direction - The company aims to complete the submission for FDA clearance of the ReStore soft exo-suit and prepare for its launch in both the U.S. and Europe [21] - The strategy includes engaging with U.S. insurers for broader reimbursement coverage and initiating commercial preparations in China [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the momentum in Europe for SCI devices and the upcoming launch of the ReStore for stroke patients [21] - The company remains focused on reducing operating expenses and improving margins to establish a pathway to breakeven [21] Other Important Information - The company raised approximately $13.1 million in gross proceeds in November 2018, with part used to repay debt [19] - The company ended 2018 with $9.5 million in cash and reduced its cash burn to $14.8 million from $22.5 million in 2017 [19] Q&A Session Summary - No specific questions or answers were provided in the content regarding the Q&A session.

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to ______ Commission File Number: 001-36612 ReWalk Robotics Ltd. (Exact name of registrant as specified in charter) | Israel | Not applicable | | --- | --- | | (State o ...