PART I - FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=5&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(unaudited)) The company reported **$4.7 million** in revenue and an **$8.8 million** net loss for the nine months ended September 30, 2021, with cash and equivalents significantly increasing to **$91.2 million** [Condensed Consolidated Balance Sheets](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of September 30, 2021, total assets reached **$98.7 million**, driven by **$91.2 million** in cash, while shareholders' equity significantly increased to **$93.0 million** Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | Sep 30, 2021 (Unaudited) | Dec 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $91,227 | $20,350 | | Total current assets | $96,330 | $25,248 | | Total assets | $98,718 | $28,067 | | **Liabilities & Equity** | | | | Total current liabilities | $4,381 | $4,668 | | Total liabilities | $5,725 | $6,293 | | Total shareholders' equity | $92,993 | $21,774 | | Total liabilities and shareholders' equity | $98,718 | $28,067 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Q3 2021 revenues rose to **$2.0 million** with a net loss of **$2.7 million**, while nine-month revenues reached **$4.7 million** and net loss narrowed to **$8.8 million** Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Q3 2021 | Q3 2020 | Nine Months 2021 | Nine Months 2020 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $1,972 | $747 | $4,724 | $3,175 | | Gross Profit | $1,140 | $392 | $2,574 | $1,787 | | Operating Loss | ($2,662) | ($3,069) | ($8,824) | ($9,223) | | Net Loss | ($2,675) | ($3,336) | ($8,878) | ($10,031) | | Net loss per share, basic and diluted | ($0.06) | ($0.18) | ($0.21) | ($0.71) | [Condensed Statements of Changes in Shareholders' Equity](index=8&type=section&id=CONDENSED%20STATEMENTS%20OF%20CHANGES%20IN%20SHAREHOLDERS'%20EQUITY) Shareholders' equity significantly increased to **$93.0 million** by September 30, 2021, primarily due to substantial capital raised from equity offerings and warrant exercises - The company raised significant capital through multiple offerings in the first nine months of 2021, including a **$36.3 million** 'best effort' offering, a **$28.1 million** 'registered direct' offering, and **$15.1 million** from the exercise of warrants[28](index=28&type=chunk)[29](index=29&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash used in operations was **$8.9 million**, while financing activities provided **$79.8 million**, resulting in a **$70.9 million** increase in cash for the nine months ended September 30, 2021 Cash Flow Summary (Nine Months Ended Sep 30, in thousands) | Cash Flow Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | ($8,903) | ($10,131) | | Net cash used in investing activities | ($28) | ($73) | | Net cash provided by financing activities | $79,808 | $11,948 | | **Increase in cash, cash equivalents, and restricted cash** | **$70,877** | **$1,744** | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) The notes detail the company's exoskeleton business, COVID-19 impacts, financial position with **$91.2 million** cash, revenue disaggregation, and significant commitments, confirming sufficient liquidity for over 12 months - The company designs, develops, and commercializes robotic exoskeletons (ReWalk, ReStore) and distributes third-party products (MediTouch, MyoCycle) for individuals with mobility impairments[35](index=35&type=chunk)[36](index=36&type=chunk) - The COVID-19 pandemic has negatively impacted sales and operations, and the company expects this to continue as long as the pandemic affects its key markets in Germany and the United States[37](index=37&type=chunk) - Despite a net loss of **$8.8 million** and an accumulated deficit of **$190.3 million** for the nine months ended Sep 30, 2021, the company states it has sufficient funds for more than 12 months, holding **$91.2 million** in cash and cash equivalents[39](index=39&type=chunk) Disaggregation of Revenues (in thousands) | Revenue Source | Q3 2021 | Q3 2020 | Nine Months 2021 | Nine Months 2020 | | :--- | :--- | :--- | :--- | :--- | | Units placed | $1,855 | $522 | $4,310 | $2,583 | | Spare parts and warranties | $117 | $225 | $414 | $592 | | **Total Revenues** | **$1,972** | **$747** | **$4,724** | **$3,175** | - As of September 30, 2021, the company had non-cancelable purchase obligations of approximately **$1.4 million** and a contingent liability to the Israel Innovation Authority (IIA) of **$1.6 million**[68](index=68&type=chunk)[75](index=75&type=chunk) - In September 2021, the company raised capital through a registered direct offering, selling **15.4 million** ordinary shares and various warrants[110](index=110&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses **164%** Q3 2021 revenue growth, improved gross margin, increased operating expenses, and significantly enhanced liquidity with **$91.2 million** cash from recent equity offerings [Overview and Business Highlights](index=29&type=section&id=Overview%20and%20Business%20Highlights) The company focuses on commercializing robotic exoskeletons, pursuing reimbursement, and achieved **$2.0 million** revenue, **58%** gross margin, FDA breakthrough designation, and **$91.2 million** cash in Q3 2021 - The company is pursuing broader reimbursement coverage, noting a policy with the U.S. Department of Veterans Affairs (VA) and progress with German insurers (Barmer, DGUV, TK, DAK); a code for ReWalk Personal 6.0 was issued by CMS, effective October 1, 2020, which may lead to a future coverage policy[128](index=128&type=chunk)[129](index=129&type=chunk)[131](index=131&type=chunk) - Key highlights for Q3 2021 include receiving FDA breakthrough device designation for the ReBoot soft exoskeleton for home and community use by stroke patients[132](index=132&type=chunk) - The company strengthened its cash position to **$91.2 million**, which includes proceeds from a **$32.5 million** registered direct offering that closed in September 2021[132](index=132&type=chunk) [Evolving COVID-19 Pandemic](index=30&type=section&id=Evolving%20COVID-19%20Pandemic) The COVID-19 pandemic continues to negatively impact sales, patient trials, and training, with limited but potential future effects on manufacturing and supply chains - The pandemic has negatively impacted sales by affecting the company's ability to conduct trials for new patients, access clinics, and train users on its products[134](index=134&type=chunk) - Manufacturing has experienced limited impact from supply chain delays and component shortages, but future disruptions are possible[134](index=134&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Q3 2021 revenue increased **164%** to **$2.0 million**, gross margin improved to **58%**, while R&D decreased and sales/marketing and G&A expenses rose, narrowing the net loss to **$2.7 million** Revenue by Product Type (in thousands) | Revenue Type | Q3 2021 | Q3 2020 | Nine Months 2021 | Nine Months 2020 | | :--- | :--- | :--- | :--- | :--- | | Personal unit revenues | $1,357 | $698 | $3,818 | $3,079 | | Rehabilitation unit revenues | $615 | $49 | $906 | $96 | | **Total Revenues** | **$1,972** | **$747** | **$4,724** | **$3,175** | - Q3 2021 revenue increased **164%** YoY, driven by a higher number of personal and rehabilitation units sold in the U.S. and Germany as COVID-19 restrictions eased[140](index=140&type=chunk) - Gross profit margin increased to **58%** in Q3 2021 from **52%** in Q3 2020, mainly due to higher sales volume and higher Average Selling Price (ASP), partially offset by sales mix[142](index=142&type=chunk) - R&D expenses decreased by **17%** for the nine months ended Sep 30, 2021, mainly due to reduced personnel and consulting costs related to the ReStore soft suit exoskeleton[145](index=145&type=chunk) - Sales and marketing expenses increased by **12%** for the nine months ended Sep 30, 2021, driven by increased personnel-related expenses, including higher sales-driven compensation[148](index=148&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) The company significantly improved liquidity to **$91.2 million** cash by Q3 2021 through equity raises, confirming sufficient funds for over 12 months despite net loss and negative operating cash flow - As of September 30, 2021, the company had **$91.2 million** in cash and cash equivalents and believes it has sufficient funds to support operations for more than 12 months[157](index=157&type=chunk) - The company intends to fund future operations through cash on hand, additional equity/debt offerings, and warrant exercises; primary cash uses will be for sales and marketing, R&D for the 'soft suit' exoskeleton, and general corporate purposes[158](index=158&type=chunk)[159](index=159&type=chunk) - The company fully repaid its loan agreement with Kreos Capital on December 29, 2020, discharging all obligations[164](index=164&type=chunk) - In September 2021, the company closed a registered direct offering and concurrent private placement, raising gross proceeds of approximately **$32.5 million**[179](index=179&type=chunk) Cash Flow Summary (Nine Months Ended Sep 30, in thousands) | Cash Flow Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | ($8,903) | ($10,131) | | Net cash used in investing activities | ($28) | ($73) | | Net cash provided by financing activities | $79,808 | $11,948 | [Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company reports no material changes to its market risk during the second quarter of 2021, referring to its 2020 Form 10-K for further details - There have been no material changes to the company's market risk during the second quarter of 2021[197](index=197&type=chunk) [Controls and Procedures](index=43&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) The CEO and CFO concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of September 30, 2021[200](index=200&type=chunk) - No changes were identified during the quarter ended September 30, 2021, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[201](index=201&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=44&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company reports no material changes to its legal proceedings from those described in its 2020 Form 10-K - There have been no material changes to the company's legal proceedings from those disclosed in the 2020 Form 10-K[203](index=203&type=chunk) [Risk Factors](index=44&type=section&id=ITEM%201A.RISK%20FACTORS) Key risks include product defects, ongoing COVID-19 impacts on sales and supply, and significant challenges with the mandatory FDA post-market surveillance study for ReWalk Personal 6.0 - Manufacturing or design defects, particularly in the software, could lead to user injury or death, resulting in recalls, negative publicity, and product liability claims; a recent correction was initiated for battery thermal runaway events[205](index=205&type=chunk)[206](index=206&type=chunk) - The COVID-19 pandemic continues to adversely affect business through curtailed sales activities, inability to conduct training, repair delays, and supply chain disruptions[209](index=209&type=chunk)[210](index=210&type=chunk)[211](index=211&type=chunk) - The company faces significant risk related to its mandatory FDA post-market surveillance study; despite protocol modifications, enrollment has been substantially below requirements, and failure to satisfy the FDA could result in warning letters or require the company to stop marketing the ReWalk Personal device in the U.S.[219](index=219&type=chunk)[222](index=222&type=chunk)[223](index=223&type=chunk) - Collaborations with third parties like MediTouch, Myolyn, and Harvard University may not result in commercially viable products or significant revenues and could be terminated[216](index=216&type=chunk)[217](index=217&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=47&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) No unregistered sales of equity securities or use of proceeds transactions occurred that were not previously reported on a Form 8-K - No unregistered sales of equity securities or use of proceeds transactions occurred that were not previously reported on a Form 8-K[224](index=224&type=chunk) [Exhibits](index=48&type=section&id=ITEM%206.%20EXHIBITS) This section lists exhibits filed with the Form 10-Q, including recent offering documents and officer certifications - The report includes several exhibits, such as forms of warrants and securities purchase agreements related to the September 2021 offering, and certifications by the CEO and CFO[226](index=226&type=chunk)

Financial Performance - Total revenue in Q2 2021 was $1.4 million, marking the fourth consecutive quarter of growth[126] - Revenues for the three months ended June 30, 2021, were $1,436 thousand, a decrease of $232 thousand or 14% compared to $1,668 thousand for the same period in 2020[134] - Revenues for the six months ended June 30, 2021, increased by $324 thousand or 13% to $2,752 thousand compared to $2,428 thousand for the same period in 2020[134] - Gross profit for the three months ended June 30, 2021, was $727 thousand, representing 51% of revenue, down from 61% in the same period of 2020[136] - The company incurred a consolidated net loss of $6.2 million for the six months ended June 30, 2021, with an accumulated deficit of $187.6 million[147] Expenses - Total operating expenses in Q2 2021 were $3.9 million[126] - Research and development expenses decreased by $144 thousand or 15% for the three months ended June 30, 2021, totaling $810 thousand compared to $954 thousand in 2020[138] - Sales and marketing expenses increased by $260 thousand or 19% for the three months ended June 30, 2021, totaling $1,613 thousand compared to $1,353 thousand in 2020[139] - General and administrative expenses increased by $178 thousand or 14% for the three months ended June 30, 2021, totaling $1,445 thousand compared to $1,267 thousand in 2020[140] - Financial expenses, net, decreased by $244 thousand for the three months ended June 30, 2021, totaling $(9) thousand compared to $235 thousand in 2020[142] Cash Position - Cash position as of Q2 2021 was strong at $64.2 million[126] - Cash and cash equivalents as of June 30, 2021, were $64.2 million, with a negative operating cash flow of $6.3 million for the six months ended June 30, 2021[147] - Net cash used in operating activities decreased by $1.2 million or 16% from $7.5 million in June 2020 to $6.3 million in June 2021 due to improved working capital[178] - Net cash provided by financing activities increased by $44.9 million from $5.3 million in June 2020 to $50.2 million in June 2021, primarily due to higher proceeds from a February 2021 offering[178] Product Development and Market Strategy - The company has developed and commercialized the ReStore device for rehabilitation, which began in June 2019[120] - 24 ReWalk Personal 6.0 units were placed as part of a VA policy for veterans with spinal cord injuries[122] - The company expects future growth to be driven by sales of the ReWalk Personal device and aims to improve gross profit through increased sales volumes[135] - The company is pursuing various paths for reimbursement and support fundraising efforts by institutions and clinics[122] - The company views China as a key market for products designed for stroke patients and continues to evaluate potential relationships for market penetration[176] Impact of COVID-19 - The COVID-19 pandemic has significantly disrupted sales and operations, impacting the ability to engage with customers and conduct trials[128] - The company has implemented remote working procedures and cost reduction efforts during the pandemic[129] Financing and Capital Raising - The company raised $20.0 million from a loan agreement with Kreos, with a repayment period extended from 24 to 36 months due to capital issuance[150] - The company completed a public offering on November 20, 2018, raising $13.1 million from the sale of 728,019 units at $7.5 per unit[158] - The company issued 5,600,000 common units at $1.25 per unit in a public offering on February 10, 2020, with additional warrants issued[164] - On February 19, 2021, the company sold 10,921,502 ordinary shares at $3.6625 per share, raising significant capital[167] - The company received confirmation of loan forgiveness for a $392 thousand Paycheck Protection Program loan on November 6, 2020[156] - The company has registered up to $100 million of ordinary shares and warrants under Form S-3, which expires on May 23, 2022[156] - The company has raised a total of $14.5 million from the sale of 302,092 ordinary shares under the ATM Offering Program before its suspension on February 20, 2019[171] - The company has incurred total expenses of approximately $1.2 million in connection with the ATM Offering Program, including commissions[171] - The company temporarily suspended the ATM Offering Program to facilitate a public offering in February 2019[171] - The company intends to continue using at-the-market offerings opportunistically to raise additional funds, subject to certain restrictions[172] Collaboration and Obligations - The company has total contractual obligations of $4.6 million as of June 30, 2021, with $3.0 million due within one year[180] - The company has a remaining term of approximately 1.66 years under its Collaboration Agreement with Harvard, which requires quarterly funding commitments[181] - The company has the potential for future acquisitions, although no current agreements are in place[149]

Financial Performance - The company's total revenue in Q1 2021 was $1.3 million, a 62.5% increase from $0.8 million in Q1 2020[124] - Revenues for the three months ended March 31, 2021, were $1.316 million, a 73% increase from $760 thousand in the same period of 2020[134] - Gross profit for the three months ended March 31, 2021, was $707 thousand, representing 54% of revenue, compared to 49% in the same period of 2020[135] - The company incurred a consolidated net loss of $3.062 million for the three months ended March 31, 2021, compared to a net loss of $3.840 million in 2020[148] Expenses and Cost Management - Operating expenses decreased to $3.7 million in Q1 2021, compared to $4 million in Q1 2020[124] - Research and development expenses decreased by $190 thousand, or 19%, to $795 thousand for the three months ended March 31, 2021, compared to $985 thousand in 2020[137] - Sales and marketing expenses remained flat at $1.671 million for the three months ended March 31, 2021, with a slight decrease of $10 thousand[138] - General and administrative expenses decreased by $47 thousand, or 4%, to $1.262 million for the three months ended March 31, 2021, compared to $1.309 million in 2020[140] - Financial expenses (income), net, decreased by $250 thousand, or 101%, to $(4) thousand for the three months ended March 31, 2021, compared to $246 thousand in 2020[143] Cash and Liquidity - As of March 31, 2021, the company had a strong balance sheet with $67.4 million in cash[124] - Cash and cash equivalents as of March 31, 2021, totaled $67.4 million, with a negative operating cash flow of $3.2 million for the same period[148] - Net cash used in operating activities decreased by $1.2 million or 27% to $(3,173) thousand for the three months ended March 31, 2021, compared to $(4,341) thousand in the same period of 2020[180] - Net cash provided by financing activities increased by $45.5 million to $50,236 thousand for the three months ended March 31, 2021, compared to $4,690 thousand in the same period of 2020[181] Market and Product Developments - The company placed 24 ReWalk Personal 6.0 units under a VA policy for veterans with spinal cord injuries as of March 31, 2021[120] - A new reimbursement code for ReWalk Personal 6.0 was issued in July 2020, effective October 1, 2020, which may lead to broader coverage by CMS[121] - The company has entered into a contract with BKK Mobile Oil health insurance to supply ReWalk's Personal 6.0 System in Germany[124] - The company continues to pursue reimbursement paths and fundraising efforts to support its products in the market[120] - The company expects future growth to be driven by sales of the ReWalk Personal device and broader commercial coverage policies with third-party payors[134] Operational Challenges - The COVID-19 pandemic has significantly disrupted the company's operations, affecting customer engagement and product trials[126] - The company has implemented remote working procedures and cost reduction measures in response to the pandemic[127] Financing and Investment Activities - The Company entered into warrant exercise agreements with institutional investors, issuing new warrants to purchase up to 480,000 ordinary shares at an exercise price of $7.50 per share[155] - The Company repaid the remaining loan principal amount to Kreos, resulting in an outstanding principal amount of zero as of December 31, 2020[156] - The Company received confirmation of its PPP Note forgiveness on November 6, 2020, for an unsecured loan of $392 thousand[157] - The Company completed a follow-on public offering on November 20, 2018, raising total gross proceeds of $13.1 million[160] - The Company issued and sold 833,334 ordinary shares at $6.00 per share and warrants to purchase up to 416,667 ordinary shares in a private placement on June 12, 2019[165] - The Company closed a public offering on February 10, 2020, issuing 5,600,000 common and pre-funded units at a price of $1.25 and $1.249 per unit, respectively[166] - The Company entered into a purchase agreement on February 19, 2021, for the issuance and sale of 10,921,502 ordinary shares at $3.6625 per share, along with warrants for 5,460,751 ordinary shares[169] - As of September 30, 2020, the Company had sold 302,092 ordinary shares under the ATM Offering Program for net proceeds of $14.5 million[173] - The Company is subject to restrictions on using the ATM Offering Program, limiting its ability to access capital efficiently[174] - The company entered into an investment agreement with Timwell Corporation for a total of $20 million, issuing 640,000 shares at $1.25 per share[175] - The first tranche of $5 million for 160,000 shares closed on May 15, 2018, with net proceeds of approximately $4.3 million after expenses[175] - The second and third tranches totaling $15 million were not completed due to Timwell's breaches of the investment agreement[176] Obligations and Risks - Total contractual obligations as of March 31, 2021, amounted to $4,950 thousand, with $1,150 thousand due within one year[183] - The collaboration agreement with Harvard has a remaining term of approximately 1.91 years, requiring quarterly funding installments[184] - The company has no off-balance sheet arrangements or guarantees of third-party obligations as of March 31, 2021[187] - There have been no material changes to the company's market risk during the first quarter of 2021[188] Strategic Initiatives - The company continues to evaluate potential relationships to penetrate the Chinese market for products designed for stroke patients[178]