ReWalk(LFWD) - 2025 Q2 - Quarterly Report

PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS This section presents the unaudited condensed consolidated financial statements for the six months ended June 30, 2025, with accompanying notes Condensed Consolidated Balance Sheets 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 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 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][91] - 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][104][108] Condensed Consolidated Statements of Cash Flows 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 Note 1: General - 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] - 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] Note 2: Basis of Presentation and Summary of Estimates - 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][35] - 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][37] Note 3: Significant Accounting Policies 3a. Fair Value Measurements 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][45] 3b. Revenue Recognition 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][51][57][58] - 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][65][66] 3c. Concentrations of Credit Risks 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][68] 3d. Warranty provision 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] 3e. Basic and diluted net loss per ordinary share - 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][72] 3f. Goodwill and acquired intangible assets - 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][79] 3h. Restricted cash and Other long-term assets - 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] 3i. New Accounting Pronouncements - 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] - 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] Note 4: Inventories 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 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][79] - 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][81] Note 6: Commitments and Contingent Liabilities 6a. Purchase commitments - As of June 30, 2025, non-cancelable outstanding purchase obligations amounted to approximately $7.4 million[82] 6b. Operating lease commitment 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] 6c. Royalties - 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][86] - Royalty expenses in cost of revenue were $8 thousand for Q2 2025 and $2 thousand for H1 2025[85] 6d. Liens - 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] 6e. Legal Claims - 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] Note 7: Shareholders' Equity 7a. Reverse share split - 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] 7b. Share option plans - 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][94] 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] 7c. Share-based awards to non-employee consultants - As of June 30, 2025, there were no outstanding options or RSUs held by non-employee consultants[100] 7d. Share-based compensation expense for employees and non-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 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 - 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] - 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][105][106] - 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] Note 8: Financial Income, Net 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 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 - 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] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management discusses the company's financial condition and operational results for the six months ended June 30, 2025 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][119][120] - 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] - The Company acquired AlterG in August 2023 for approximately $19 million cash, expanding its product offerings in anti-gravity systems for rehabilitation[120] - 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] - 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][127] Second Quarter 2025 Business Highlights - Achieved FDA clearance and U.S. launch of ReWalk 7 in April 2025, with over 20 units installed and positive customer feedback[133] - 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] - Improved quarterly cash burn to $3.9 million (down from $5.6 million in Q2 2024 and $5.5 million in Q1 2025) due to operational efficiencies and cost reduction initiatives[133] - Successfully transitioned to in-house manufacturing of ReWalk Personal Exoskeleton during Q2, terminating the agreement with Sanmina, leading to cost savings and improved quality control[133] - Strengthened executive leadership with the appointment of Mark Grant as President and CEO and Almog Adar as CFO[133] Three and Six Months Ended June 30, 2025 Compared to Three and Six Months Ended June 30, 2024 Revenue Revenue (in thousands) | Period | 2025 | 2024 | Change ($) | 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][136] Gross Profit 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 | $4,152 | 43.1% | 34.6% | - Gross profit margin increased for both periods, driven by lower production costs following the closure of the Fremont manufacturing facility and the transition of AlterG production to a contract manufacturer, with further improvements expected from in-house ReWalk production[139][140] Research and Development Expenses, net Research and Development Expenses, net (in thousands) | Period | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $767 | $1,205 | $(438) | -36.3% | | Six Months Ended June 30 | $1,685 | $2,496 | $(811) | -32.5% | - The decrease in R&D expenses was primarily due to the completion of development programs for the ReWalk 7 and AlterG NEO[142][143] Sales and Marketing Expenses Sales and Marketing Expenses (in thousands) | Period | 2025 | 2024 | Change ($) | 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 $0.8 million in H1 2024)[145][146] General and Administrative Expenses General and Administrative Expenses (in thousands) | Period | 2025 | 2024 | Change ($) | 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][149] Impairment Charges 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 $2.8 million was recorded in Q2 2025 due to a sustained decline in the Company's share price, which caused its market capitalization to fall below its carrying value[150] Financial Income, Net Financial Income, Net (in thousands) | Period | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $1 | $144 | $(143) | -99.3% | | Six Months Ended June 30 | $31 | $376 | $(345) | -91.8% | - The significant decrease in financial income, net, was primarily attributable to lower yields on a reduced cash balance[153] Income Taxes Income Taxes (in thousands) | Period | 2025 | 2024 | Change ($) | | :--- | :--- | :--- | | 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][155] Critical Accounting Policies and Estimates - 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][157] Recent Accounting Pronouncements - Information regarding new accounting pronouncements is detailed in Note 3 to the unaudited condensed consolidated financial statements[158] Liquidity and Capital Resources Sources of Liquidity and Outlook - 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] - 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][161] - 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][192] Equity Raises - 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] - 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] - 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][172] - In June 2025, the Company completed a public offering of 4,000,000 ordinary shares and warrants at $0.65 per share[174] Cash Flows for the Six Months Ended June 30, 2025 and 2024 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] - Net cash provided by financing activities increased by $7.8 million, primarily from the January 2025 offering, ATM program, and June 2025 offering[180] Obligations and Contractual Commitments 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] Off-Balance Sheet Arrangements - As of June 30, 2025, the Company had no off-balance sheet arrangements or guarantees of third-party obligations[184] ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 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] ITEM 4. CONTROLS AND PROCEDURES 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 - 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] Changes in Internal Control over Financial Reporting - 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] PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS 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] ITEM 1A. RISK FACTORS 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][192] - 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] - 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][195][196][197] ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS This item is not applicable for the reporting period - Not applicable[198] ITEM 3. DEFAULTS UPON SENIOR SECURITIES This item is not applicable for the reporting period - Not applicable[199] ITEM 4. MINE SAFETY DISCLOSURES This item is not applicable for the reporting period - Not applicable[200] ITEM 5. OTHER INFORMATION 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] ITEM 6. EXHIBITS 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] 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]