UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SeptemberJune 30, 20172023

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
¨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
rewalklogo20fa06.jpg

image0.jpg
ReWalk Robotics Ltd.
(Exact name of registrant as specified in charter)

Israel
 
Not applicable
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. employer identification no.Employer Identification No.)
   
3 Hatnufa Street, Floor 6, Yokneam Ilit, Israel
 
2069203
(Address of principal executive offices)
 
(Zip Code)
+972.4.959.0123
Registrant's telephone number, including area code
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act

Title of each class
Trading Symbol
Name of each exchange on which registered
Ordinary shares, par value NIS 0.25
RWLK
 Nasdaq Capital Market

+972.4.959.0123
Registrant's telephone number, including area code

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Indicate by a check mark whether the Registrantregistrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes x No o


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.company. See the definitions of “large accelerated filer”,filer,” “accelerated filer”,filer,” “smaller reporting company”company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer o
Accelerated filer o
Non-accelerated filer o
Smaller reporting company x
(Do not check if a smaller reporting company)
Emerging growth company x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o No x

As of October 31, 2017of August 11, 2023, the Registrantregistrant had outstanding 22,066,352 59,937,017 ordinary shares, par value NIS 0.010.25 per share.



REWALK ROBOTICS LTD.
 
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBERJune 30, 20172023
 
TABLE OF CONTENTS
 
 Page No.
4
4
 4
 6
 7
 8
 9
26
36
36
36
37
38
38
38
39
40

1


















GeneralIntroduction and Where You Can Find Other Information

As used in this quarterly report on Form 10-Q (this “quarterly report”), the terms “ReWalk,” the “Company,” “RRL,” “we,” “us” and “our” refer to ReWalk Robotics Ltd. and its subsidiaries, unless the context clearly indicates otherwise. Our website is www.rewalk.com. Information contained in, or that can be accessed through, our website does not constitute a part of this quarterly report on Form 10-Q and is not incorporated by reference herein. We have included our website address in this quarterly report solely for informational purposes. Information that we furnish to or file with the Securities and Exchange Commission (the “SEC”), including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to, or exhibits included in, these reports are available for download, free of charge, on our website as soon as reasonably practicable after such materials are filed with or furnished to the SEC. Our SEC filings, including exhibits filed or furnished therewith, are also available on the SEC’s website at http://www.sec.gov. You
Special Note Regarding Forward-Looking Statements
In addition to historical information, this quarterly report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, that are based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, potential market opportunities and the effects of competition. Forward-looking statements may obtaininclude projections regarding our future performance and, copy any document we filein some cases, can be identified by words like “anticipate,” “assume,” “believe,” “could,” “seek,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “future,” “should,” “will,” “would” or similar expressions that convey uncertainty of future events or outcomes and the negatives of those terms. These statements may be found in the section of this quarterly report titled “Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this quarterly report. These statements include, but are not limited to, statements regarding:
our expectations regarding future growth, including our ability to increase sales in our existing geographic markets and expand to new markets;
our ability to maintain and grow our reputation and the market acceptance of our products;
our ability to achieve reimbursement from third-party payors or advance Centers for Medicare & Medicaid Services (“CMS”) coverage for our products, including our ability to successfully submit cases for Medicare coverage through Medicare Administrative Contractors;
our ability to regain and maintain compliance with the continued requirements of the Nasdaq Capital Market and the risk that our ordinary shares will be delisted if we do not comply with such requirements;

our ability to complete our announced acquisition of AlterG, Inc. (“AlterG”), successfully integrate AlterG’s operations into our organization following closing, and realize the anticipated benefits therefrom;

the adverse effect that the COVID-19 pandemic has had and continues to have on our business and results of operations;
our ability to have sufficient funds to meet certain future capital requirements, which could impair our efforts to develop and commercialize existing and new products;
our limited operating history and our ability to leverage our sales, marketing and training infrastructure;
our ability to grow our business through acquisitions of businesses, products or technologies, and the failure to manage acquisitions, or the failure to integrate them with our existing business, which could have a material adverse effect on our business, financial condition, and operating results;
our expectations as to our clinical research program and clinical results;
our ability to obtain certain components of our products from third-party suppliers and our continued access to our product manufacturers;
our ability to improve our products and develop new products;
our compliance with medical device reporting regulations to report adverse events involving our products, which could result in voluntary corrective actions or enforcement actions such as mandatory recalls, and the potential impact of such adverse events on our ability to market and sell our products;
our ability to gain and maintain regulatory approvals and to comply with any post-marketing requests
the risk of a cybersecurity attack or breach of our information technology systems significantly disrupting our business operations;
2

our ability to maintain adequate protection of our intellectual property and to avoid violation of the intellectual property rights of others;
the impact of substantial sales of our shares by certain shareholders on the market price of our ordinary shares;
our ability to use effectively the proceeds of our offerings of securities;
the impact of the market price of our ordinary shares on the determination of whether we are a passive foreign investment company;
market and other conditions, including the extent to which inflation or global instability may disrupt our business operations or our financial condition or the financial condition of our customers and suppliers; and
other factors discussed in the “Risk Factors” section of our 2022 annual report on Form 10-K and in our subsequent reports filed with the SEC.
The preceding list is not intended to be an exhaustive list of all of our forward-looking statements. The statements are based on our beliefs, assumptions, and expectations of future performance, taking into account the information currently available to us. These statements are only predictions based upon our current expectations and projections about future events. There are important factors that could cause our actual results, levels of activity, performance, or achievements to differ materially from the results, levels of activity, performance or achievements expressed or implied by the statements. In particular, you should consider the risks provided under “Part I, Item 1A. Risk Factors” of our 2022 annual report on Form 10-K, and in other reports subsequently filed by us with, or furnishfurnished to, the SEC atSEC.
You should not rely upon forward-looking statements as predictions of future events. Although we believe that the SEC’s public reference room at 100 F Street, NE, Room 1580, Washington, D.C. 20549. You may obtain information onexpectations reflected in the operationforward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur.
Any forward-looking statement in this quarterly report speaks only as of the SEC’s public reference facilitiesdate hereof. Except as required by calling the SEC at 1-800-SEC-0330. You may request copieslaw, we undertake no obligation to update publicly any forward-looking statements, whether as a result of these documents, upon payment of a duplicating fee, by writing to the SEC at its principal office at 100 F Street, NE, Room 1580, Washington, D.C. 20549.new information, future developments or otherwise.


PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

REWALK ROBOTICS LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share and per share data)
 
 June 30,  December 31, 
September 30, December 31, 2023  2022 
2017 2016 (unaudited)    
ASSETS         
         
CURRENT ASSETS         
         
Cash and cash equivalents$12,928
 $23,678
 $58,184  $67,896 
Trade receivable, net1,265
 1,254
 774   1,036 
Prepaid expenses and other current assets1,703
 1,291
  
1,846
   649 
Inventory3,500
 3,264
Inventories  3,038   2,929 
Total current assets19,396
 29,487
  
63,842
   72,510 
          
LONG-TERM ASSETS 
  
        
          
Other long term assets1,182
 1,018
Restricted cash and other long-term assets  689   694 
Operating lease right-of-use assets 1,151   836 
Property and equipment, net906
 1,258
  129   196 
Total long-term assets2,088
 2,276
  1,969   1,726 
   
Total assets$21,484
 $31,763
 $
65,811
  $74,236 
 
The accompanying notes are an integral part of these consolidated financial statements.

REWALK ROBOTICS LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share and per share data)
 September 30, December 31,
 2017 2016
LIABILITIES AND SHAREHOLDERS’ EQUITY   
CURRENT LIABILITIES   
Current maturities of long term loan$5,663
 $7,495
Trade payables2,426
 3,424
Employees and payroll accruals858
 1,019
Deferred revenues and customers advances133
 54
Other current liabilities537
 406
Total current liabilities9,617
 12,398
    
LONG-TERM LIABILITIES 
  
Long term loan, net of current maturities10,003
 10,518
Deferred revenues250
 284
Other long-term liabilities274
 303
Total long-term liabilities10,527
 11,105
    
Total liabilities20,144
 23,503
    
COMMITMENTS AND CONTINGENT LIABILITIES

 

Shareholders’ equity: 
  
    
Share capital 
  
Ordinary shares, par value NIS 0.01 per share-Authorized: 250,000,000 shares at September 30, 2017 and December 31, 2016; Issued and outstanding: 21,823,771 and 16,338,257 shares at September 30, 2017 and December 31, 2016, respectively60
 45
Additional paid-in capital126,338
 114,707
Accumulated deficit(125,058) (106,492)
Total shareholders’ equity1,340
 8,260
Total liabilities and shareholders’ equity$21,484
 $31,763
 The accompanying notes are an integral part of these consolidated financial statements.


REWALK ROBOTICS LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

(In thousands, except share and per share data)
 Three Months Ended
September 30,
 Nine Months Ended
September 30,
 2017 2016 2017 2016
Revenues$1,732
 $1,400
 $6,238
 $4,278
Cost of revenues1,024
 1,110
 3,740
 3,410
        
Gross profit708
 290
 2,498
 868
        
Operating expenses:       
Research and development, net1,618
 1,968
 4,433
 6,737
Sales and marketing2,637
 3,774
 8,643
 10,577
General and administrative1,805
 1,951
 5,796
 5,960
        
Total operating expenses6,060
 7,693
 18,872
 23,274
        
Operating loss(5,352) (7,403) (16,374) (22,406)
Loss on extinguishment of debt
 
 313
 
Financial expenses, net479
 508
 1,843
 1,514
        
Loss before income taxes(5,831) (7,911) (18,530) (23,920)
Income taxes15
 9
 25
 39
        
Net loss$(5,846) $(7,920) $(18,555) $(23,959)
        
Net loss per ordinary share, basic and diluted$(0.27) $(0.62) $(1.00) $(1.92)
        
Weighted average number of shares used in computing net loss per ordinary share, basic and diluted21,660,757
 12,759,887
 18,463,444
 12,495,433

The accompanying notes are an integral part of these condensed consolidated financial statements.


REWALK ROBOTICS LTD. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)

CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)

  June 30,  December 31, 
  2023  2022 
  (unaudited)    
LIABILITIES AND SHAREHOLDERS’ EQUITY      
CURRENT LIABILITIES      
Current maturities of operating leases liability $616  $564 
Trade payables  
2,846
   1,950 
Employees and payroll accruals  936   1,282 
Deferred revenues  435   301 
Other current liabilities  609   685 
Total current liabilities  
5,442
   4,782 
         
LONG-TERM LIABILITIES        
Deferred revenues  841   890 
Non-current operating leases liability  541   333 
Other long-term liabilities  13   66 
Total long-term liabilities  1,395   1,289 
         
Total liabilities  
6,837
   6,071 
         
COMMITMENTS AND CONTINGENT LIABILITIES
        
Shareholders’ equity:        
         
Share capital        
Ordinary share of NIS 0.25 par value-Authorized: 120,000,000 shares at June 30, 2023 and December 31, 2022; Issued: 63,368,746 and 63,023,506 shares at June 30, 2023 and December 31, 2022, respectively; Outstanding: 59,346,139 and 60,090,298 shares as of June 30, 2023 and December 31, 2022 respectively
  4,435   4,489 
Additional paid-in capital  280,455   279,857 
Treasury Shares at cost, 4,022,607 and 2,933,208 ordinary shares at June 30, 2023 and December 31, 2022 respectively  (3,203)  (2,431)
Accumulated deficit  (222,713)  (213,750)
Total shareholders’ equity  58,974   68,165 
Total liabilities and shareholders’ equity $65,811  $74,236 
 Ordinary Share Additional
paid-in
capital
 Accumulated
deficit
 Total
shareholders’
equity
 Number Amount 
Balance as of January 1, 201612,222,583
 33
 94,876
 (73,989) 20,920
Share-based compensation to employees and non-employees
 
 3,398
 
 3,398
Issuance of ordinary shares upon exercise of options to purchase ordinary shares and RSUs by employees and non-employees128,496
 1
 17
 
 18
Issuance of ordinary shares in at-the-market offering, net of issuance expenses in the amount of $468692,062
 2
 4,097
 
 4,099
Issuance of warrants to purchase ordinary shares
 
 1,239
 
 1,239
Cashless exercise of warrants into ordinary shares45,116
 *)
 *)
 
 
Issuance of ordinary shares and warrants to purchase ordinary shares in follow-on public offering, net of issuance expenses
in an amount of $1,099
3,250,000
 9
 11,080
 
 11,089
Net loss
 
 
 (32,503) (32,503)
          
Balance as of December 31, 201616,338,257
 45
 114,707
 (106,492) 8,260
Cumulative effect to stock based compensation from adoption of a new accounting standard
 
 11
 (11) 
Share-based compensation to employees and non-employees
 
 2,597
 
 2,597
Issuance of ordinary shares upon exercise of options to purchase ordinary shares and RSUs by employees and non-employees (1)105,606
 *)
 28
 
 28
Issuance of ordinary shares in at-the-market offering, net of issuance expenses in the amount of $439 (2)5,379,908
 15
 8,995
 
 9,010
Net loss
 
 
 (18,555) (18,555)
Balance as of September 30, 201721,823,771
 60
 126,338
 (125,058) 1,340
*)Represents an amount lower than $1.
(1)See Note 8b to the condensed consolidated financial statements
(2)See Note 8e to the condensed consolidated financial statements



The accompanying notes are an integral part of these condensed consolidated financial statements.


REWALK ROBOTICS LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSOPERATIONS
(Unaudited)
(In thousands)
thousands, except share and per share data)
 Nine Months Ended September 30,
 2017 2016
Cash flows from operating activities:   
Net loss$(18,555) $(23,959)
Adjustments to reconcile net loss to net cash used in operating activities:   
    
Depreciation516
 503
Share-based compensation to employees and non- employees2,597
 2,458
Deferred taxes(20) (64)
Loss on extinguishment of debt313
 
Financial expenses related to long term loan87
 495
    
Changes in assets and liabilities:   
    
Trade receivables, net(11) 1,202
Prepaid expenses and other current and long term assets(556) (804)
Inventories(381) (1,004)
Trade payables(1,048) 960
Employees and payroll accruals(161) (285)
Deferred revenues and advances from customers45
 116
Other current and long term liabilities102
 182
Net cash used in operating activities(17,072) (20,200)
    
Cash flows from investing activities:   
Purchase of property and equipment(19) (408)
Net cash used in investing activities(19) (408)
    
Cash flows from financing activities:   
Issuance of ordinary shares upon exercise of options to purchase ordinary shares by employees and non-employees28
 23
Proceeds from long term loan
 12,000
Debt issuance cost
 (441)
Repayment of long term loan(2,747) (554)
Issuance of ordinary shares in at-the-market offering, net of issuance expenses paid in the amount of $389 (1)9,060
 4,110
Net cash provided by financing activities6,341
 15,138
    
Decrease in cash and cash equivalents(10,750) (5,470)
Cash and cash equivalents at beginning of period23,678
 17,869
Cash and cash equivalents at end of period$12,928
 $12,399
    
Supplemental disclosures of non-cash flow information   
At-the-market offering expenses not yet paid$50
 $11
Classification of inventory to property and equipment, net$145
 $113

  
Three Months Ended
June 30,
  
Six Months Ended
June 30,
 
  2023  2022  2023  2022 
Revenues $1,337 $ 1,570  $2,567  $2,446 
Cost of revenues  761   824   1,420   1,435 
                 
Gross profit  576   746   1,147   1,011 
                 
Operating expenses:                
Research and development, net  816   956   1,568   1,863 
Sales and marketing  2,504   2,347   4,988   4,531 
General and administrative  2,414   1,819   4,124   3,281 
                 
Total operating expenses  5,734   5,122   10,680   9,675 
                 
Operating loss  (5,158)  (4,376)  (9,533)  (8,664)
Financial (expenses) income, net  558   (44)  636   (68)
                 
Loss before income taxes  (4,600)  (4,420)  (8,897)  (8,732)
Taxes on income  42   26   66   64 
                 
Net loss $(4,642) $(4,446) $(8,963) $(8,796)
                 
Net loss per ordinary share, basic and diluted $(0.08) $(0.07) $(0.15  $(0.14)
                 
Weighted average number of shares used in computing net loss per ordinary share, basic and diluted  59,515,410   62,544,467   59,515,289   62,519,063 
(1) See Note 8e to the condensed consolidated financial statements.
The accompanying notes are an integral part of these condensed consolidated financial statements.
6

REWALK ROBOTICS LTD. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)
(In thousands, except share data)
  
Ordinary Shares
  
Additional
paid-in
  
Treasury
  
Accumulated
  
Total
shareholders’
 
  
Number
  
Amount
  
capital
  
Shares
  
deficit
  
equity
 
Balance as of March 31, 2022
  
62,508,517
  

$

4,663
  

$

279,054
  

$

-
  

$

(198,531
)
 

$

85,186
 
Share-based compensation to employees and non-employees
  
-
   
-
   
173
   
-
   
-
   
173
 
Issuance of ordinary shares upon vesting of employees and non-employees RSUs
  
169,791
   
12
   
(12
)
  
-
   
-
   
-
 
Net loss
  -   
-
   
-
   
-
   
(4,446
)
  
(4,446
)
Balance as of June  30, 2022
  
62,678,308
  $
4,675
  $
279,215
  $
-
  $
(202,977
)
 $
80,913
 
                         
Balance as of March 31, 2023
  
59,482,004
  $
4,445
  $
280,152
  $
(3,007
)
 $
(218,071
)
 $
63,519
 

Treasury shares at cost

  

(359,049

)  (25)  -   (196)  -   (221)
Share-based compensation to employees and non-employees
  
-
   
-
   
318
   
-
   
-
   
318
 
Issuance of ordinary shares upon vesting of RSUs by employees and non-employees
  
223,184
   
15
   
(15
)
  
-
   
-
   
-
 
Net loss
                  
(4,642
)
  
(4,642
)
Balance as of June 30, 2023
  
59,346,139
  $
4,435
  $
280,455
  $
(3,203
)
 $
(222,713
)
 $
58,974
 
  

Ordinary Shares

  

Additional
paid-in

  

Treasury

  

Accumulated

  

Total

shareholders’

 
  

Number

  

Amount

  

capital

  

Shares

  

deficit

  

equity

 

Balance as of December 31, 2021

  

62,480,163

  $

4,661

  $

278,903

  $

-

  $

(194,181

)

 $

89,383

 

Share-based compensation to employees and non-employees

  

-

   

-

   

326

   

-

   

-

   

326

 

Issuance of ordinary shares upon vesting of employees and non-employees RSUs

  

198,145

   

14

   

(14

)

  

-

   

-

   

-

 

Net loss

  

-

   

-

   

-

   

-

   

(8,796

)

  

(8,796

)

Balance as of June 30, 2022

  

62,678,308

  $

4,675

  $

279,215

  $

-

  $

(202,977

)

 $

80,913

 

 

                        

Balance as of December 31, 2022

  

60,090,298

  $

4,489

  $

279,857

  $

(2,431

)

 $

(213,750

)

 $

68,165

 

Treasury shares at cost

  

(1,089,399

)

  

(78

)

  

-

   

(772

)

  

-

   

(850

)

Share-based compensation to employees and non-employees

  

-

   

-

   

622

   

-

   

-

   

622

 

Issuance of ordinary shares upon vesting of RSUs by employees and non-employees

  

345,240

   

24

   

(24

)

  

-

   

-

   

-

 

Net loss

  

-

   

-

   

-

   

-

   

(8,963

)

  

(8,963

)

Balance as of June 30, 2023

  

59,346,139

  $

4,435

  $

280,455

  $

(3,203

)

 $

(222,713

)

 $

58,974

 
The accompanying notes are an integral part of these condensed consolidated financial statements.
7

REWALK ROBOTICS LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
  
Six Months Ended
June 30,
 
  
2023
  
2022
 
Cash flows used in operating activities:
      
Net loss
 
$
(8,963
)
 
$
(8,796
)
Adjustments to reconcile net loss to net cash used in operating activities:
        
   Depreciation
  
67
   
110
 
   Share-based compensation
  
622
   
326
 
   Deferred taxes
  -   
(7
)
   Exchange rate fluctuations
  
(5
)
  
164
 
   Interest income
  
(10
)
  
-
 
Changes in assets and liabilities:
        
   Trade receivables, net
  
262
   
(281
)
   Prepaid expenses, operating lease right-of-use assets and other assets
  
(875
)
  
(183
)
   Inventories
  
(421
)
  
(228
)
   Trade payables
  
890
   
168
 
   Employees and payroll accruals
  
(346
)
  
(177
)
   Deferred revenues
  
85
   
(37
)
   Operating lease liabilities and other liabilities
  
(45
)
  
(436
)
Net cash used in operating activities
  
(8,739
)
  
(9,377
)
         
Cash flows used in investing activities:
        
Purchase of property and equipment
  
-
   
(18
)
Net cash used in investing activities
  
-
   
(18
)
         
Cash flows from financing activities:
        
Purchase of treasury shares
  
(986
)
  
-
 
Net cash used in financing activities
  
(986
)
  
-
 
         
Effect of Exchange rate changes on Cash, Cash Equivalents and Restricted Cash
  
5
   
(164
)
         
Decrease in cash, cash equivalents, and restricted cash
  
(9,720
)
  
(9,559
)
Cash, cash equivalents, and restricted cash at beginning of period
  
68,555
   
89,050
 
Cash, cash equivalents, and restricted cash at end of period
 
$
58,835
  
$
79,491
 
Supplemental disclosures of non-cash flow information
        
Classification of inventory to property and equipment, net
 
$
-
  
$
67
 
Classification of other current assets to property and equipment, net
 
$
-
  
$
22
 
Other payables related to shares re-purchase
 
$
6
  $
-
 
ROU assets obtained from new lease liabilities
 
$
513
  $
-
 
Supplemental cash flow information:
        
Cash and cash equivalents
 
$
58,184
  
$
78,832
 
Restricted cash included in other long-term assets
  
651
   
659
 
Total Cash, cash equivalents, and restricted cash
 
$
58,835
  
$
79,491
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
8

REWALK ROBOTICS LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1:GENERAL
 a.

NOTE 1:-    GENERAL


a.
ReWalk Robotics Ltd. (“RRL”, and together with its subsidiaries, the “Company”) was incorporated under the laws of the State of Israel on June 20, 2001 and commenced operations on the same date.

b.
RRL has two wholly-owned subsidiaries: (i) ReWalk Robotics, Inc., (“RRI”) incorporated under the laws of Delaware on February 15, 2012;2012 and (ii) ReWalk Robotics GMBH.GMBH (“RRG”) incorporated under the laws of Germany on January 14, 2013.

c.
During the nine months ended September 30, 2017, the Company issued and sold 5,379,908 ordinary shares at an average price of $1.76 per share under its ATM Offering Program (as defined in Note 8e). The gross proceeds to the Company were $9.4 million, and the net aggregate proceeds after deducting commissions, fees and offering expenses in the amount of $439 thousand were $9.0 million. As a result, from the inception of the ATM Offering Program in May 2016 until September 30, 2017, the Company has issued and sold 6,071,970ordinary shares at an average price of $2.31 per share under its ATM Offering Program, with gross proceeds of $14.0 million, and net aggregate proceeds of $13.1 million after deducting commissions, fees and offering expenses in the amount of $907 thousand. The Company may raise up to $25 million under its ATM Offering Program pursuant to the terms of its agreement with the sales agent. However, due to limitations under the rules of Form S-3, which have applied to the Company since it filed its annual report on Form 10-K for the fiscal year ended December 31, 2016 on February 17, 2017, taking into account ordinary shares issuedand settled under the Company’s ATM Offering Program since February 17, 2017, as of September 30, 2017, the Company may issue up to $4.3 million in primary offerings under its effective shelf registration statement on Form S-3 (File No. 333- 209833) (the “Form S-3”), including its ATM Offering Program, during the 12 months following February 17, 2017, unless and until it is no longer subject to such limitations. See Note 8e for more information about the Company’s ATM Offering Program and the related limitations under its Form S-3.

d.c.
The Company depends on one contract manufacturer. Reliance on this vendor makesis a medical device company that is designing, developing, and commercializing innovative technologies that enable mobility and wellness in rehabilitation and daily life for individuals with neurological conditions. The Company’s initial product offerings were the ReWalk Personal and ReWalk Rehabilitation Exoskeleton devices for individuals with spinal cord injury (“SCI Products”). These devices are robotic exoskeletons that are designed for individuals with paraplegia that use our patented tilt-sensor technology and an on-board computer and motion sensors to drive motorized legs that power movement. These SCI Products allow individuals with spinal cord injury the ability to stand and walk again during everyday activities at home or in the community.
The Company has sought to expand its product offerings beyond the SCI Products through internal development and distribution agreements. The Company has developed its ReStore Exo-Suit device, which it began commercializing in June 2019. The ReStore is a powered, lightweight soft exo-suit intended for use during the rehabilitation of individuals with lower limb disability due to stroke. During the second quarter of 2020, the Company signed two separate agreements to distribute additional product lines in the United States. The Company is the exclusive distributor of the MYOLYN MyoCycle FES Pro cycles to U.S. rehabilitation clinics and for the MyoCycle Home cycles available to US veterans through VA hospitals. In the second quarter of 2020, the Company also became the exclusive distributor of the MediTouch Tutor movement biofeedback systems in the United States; however, due to unsatisfactory sales performance of the MediTouch product lines, the Company terminated this agreement as of January 31, 2023. The Company will continue to evaluate other products for distribution or acquisition that can broaden its product offerings further to help individuals with neurological injury and disability.
The Company markets and sells its products directly to institutions and individuals and through third-party distributors. The Company sells its products directly primarily in Germany and the United States, and primarily through distributors in other markets. In its direct markets, the Company has established relationships with rehabilitation centers and the spinal cord injury community, and in its indirect markets, the Company’s distributors maintain these relationships. RRI markets and sells products mainly in the United States. RRG markets and sells the Company’s products mainly in Germany and Europe.

9


REWALK ROBOTICS LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

d.
As of June 30, 2023, the Company vulnerable to possible capacity constraintsincurred a consolidated net loss of $9.0 million and reduced control over component availability, delivery schedules, manufacturing yields and costs. This vendor accounted for 0% and 12% of the Company's total trade payables as of September 30, 2017 and December 31, 2016, respectively.

e.On January 9, 2017, the Company announced its plan to reduce total operating expenses in 2017 by up to 30% as compared to 2016. The Company has been working toward such reductions through a combination of targeted savings, including by establishing quality improvement initiatives and lowering overall product cost, realigning the Company’s staffing priorities and reducing the size of its staff, including its reimbursement personnel, reducing spending on external appeals, and lowering other corporate spending.

f.The Company had an accumulated deficit in the total amount of $125.1 million$222.7 million. The Company’s cash and cash equivalent as of SeptemberJune 30, 20172023 totaled $58.2 million and further losses are anticipated in the developmentCompany’s negative operating cash flow for the six months ended June 30, 2023 was $8.7 million. The Company has sufficient funds to support its operations for more than 12 months following the issuance date of its business. Those factors raise substantial doubt aboutunaudited condensed consolidated financial statements for the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due.six months ended June 30, 2023.
The Company expects to incur future net losses and its transition to profitability is dependent upon, among other things, the successful development and commercialization of its products and product candidates, the establishment of contracts for the distribution of new product lines, or the acquisition of additional product lines, any of which, or in combination, would contribute to the achievement of a level of revenues adequate to support its cost structure. Until the Company achieves profitability or generates positive cash flows, it will continue to need to raise additional cash. The Company intends to finance operating costs over the next twelve months with existingfund future operations through cash on hand, reductions in operating spend, issuances under the Company's ATM Offering Program additional private and/or other future issuancespublic offerings of debt or equity and debt securities, cash exercises of outstanding warrants or through a combination of the foregoing. However,In addition, the Company may seek additional capital through arrangements with strategic partners or from other sources and will continue to address its cost structure. Notwithstanding, there can be no assurance that the Company will needbe able to seekraise additional sources of financing if the Company require more funds than anticipated during the next 12 months or in later periods.
The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and liabilities and commitments in the normal course of business.
The condensed consolidated financial statements for the three and nine months ended September 30, 2017 do not include any adjustments to reflect the possible future effects on the recoverability and classification of assetsachieve or the amounts and classification of liabilities that may resultsustain profitability or positive cash flows from uncertainty related to the Company’s ability to continue as a going concern.operations.

REWALK ROBOTICS LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


NOTE 2:-           UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles and standards of the Public Company Accounting Oversight Board for interim financial information.principles. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles in the United States for complete financial statements. In themanagement’s opinion, of management, the accompanying financial statements includereflect all adjustments (consisting of a normal recurring accruals) considerednature that are necessary for a fair presentation of the Company's (i) consolidated financial position as of September 30, 2017, (ii) consolidated results of operations for the three and nine months ended September 30, 2017 and (iii) consolidated cash flows for the nine months ended September 30, 2017. The results for the three and nine monthsinterim periods ended September 30, 2017, as applicable, arepresented. The Company’s interim period results do not necessarily indicative ofindicate the results that may be expected for any other interim period or for the full fiscal year.
These unaudited interim condensed consolidated financial statements and accompanying notes should be read in conjunction with the 2022 consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for its fiscal year endingended December 31, 2017.

NOTE 3:-    SIGNIFICANT ACCOUNTING POLICIES

a.The significant accounting policies applied2022 (the “2022 Form 10-K”). There have been no changes in the significant accounting policies from those that were disclosed in the audited consolidated financial statements of the Company as disclosed in the Company's annual report on Form 10-K for the year ended December 31, 2016 filed with the SEC on February 17, 2017, as amended on Form 10-K/A filed with the SEC on April 27, 2017 (the “2016 Form 10-K”), are applied consistently in these unaudited interim condensed consolidated financial statements.

b.Recent Accounting Pronouncements:

Recently Implemented Accounting Pronouncements

Inventory - In July 2015, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2015-11, “Simplifying the Measurement of Inventory.” The standard changes the inventory valuation method from the lower of cost or market to the lower of cost or net realizable value for inventory valued under the first-in, first-out or average cost methods. This standard is effective for fiscal years beginning after December 15, 2016, including interim periods and requires prospective adoption with early adoption permitted. The update was effective for the Company beginning January 1, 2017. The adoption of this standard did not materially impact the Company's financial statements.
Deferred Taxes - In November 2015, the FASB issued ASU 2015-17, “Balance Sheet Classification of Deferred Taxes", which simplifies the presentation of deferred income taxes. ASU 2015-17 provides presentation requirements to classify deferred tax assets and liabilities, along with any related valuation allowance, as noncurrent on the balance sheet. The standard is effective for fiscal years beginning afteryear ended December 15, 2016, including interim periods within that reporting period. The Company elected to implement this ASU-2015-17 prospectively. The update was effective for the Company beginning January 1, 2017. The adoption of this standard did not materially impact the Company's financial statements.

Recent Accounting Pronouncements Not Yet Adopted

Revenues - In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most current revenue recognition guidance, including industry-specific guidance. The core principle is that an entity will recognize revenue to depict the transfer of goods or services to customers in an amount that the entity expects to be entitled to in exchange for those goods or services. The standard provides a five-step model to determine when and how revenue is recognized. Other major provisions of the standard include capitalization of certain contract costs, consideration of time value of money31, 2022 included in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The standard also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers.2022 Form 10-K, unless otherwise stated.

10


REWALK ROBOTICS LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3:           SIGNIFICANT ACCOUNTING POLICIES
 a.
Revenue Recognition

The guidance permits two methods of adoption: the full retrospective method, in which case the standard would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized at the earliest period shown, or the modified retrospective transition method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application.

The Company has substantially completed its evaluationgenerates revenues from sales of significant contracts and the review of its current accounting policies and practices to identify potential differences that would result from applying the requirements of the new standard to the Company’s revenue contracts. In addition, the Company is in the process of identifying the appropriate changes to business processes, systems and controls to support recognition and disclosure under the new standard.

While a final decision has not been made, the Company expects to adopt the new revenue standard in the first quarter of 2018 applying the modified retrospective transition method.products. The Company does not expect the adoption of the new revenue standardsells its products directly to have a material impact on the amountend customers and timing of revenue recognized in the Company's consolidated financial statements.

Leases - In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). Under the new guidance, a lessee will be required to recognize assets and liabilities for all leases with lease terms of more than 12 months. Consistent with current generally accepted accounting principles, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. This ASU requires additional disclosures. The standard is effective for annual periods beginning after December 15, 2018 and interim periods within those fiscal years. The ASU requires adoption based upon a modified retrospective transition approach. Early adoption is permitted.through distributors. The Company has not yet determined whether it will elect early adoptionsells its products to private individuals (who finance the purchases by themselves, through fundraising or reimbursement coverage from insurance companies), rehabilitation facilities and is currently evaluating the impact of the pending adoption of this ASU on the Company's consolidated financial statements and related disclosures.distributors.
 
StatementDisaggregation of Cash Flows - In August 2016,Revenues (in thousands)
  
Three Months Ended
June 30,
  
Six Months Ended
June 30,
 
  
2023
  
2022
  
2023
  
2022
 
Units placed
 
$
1,187
  
$
1,457
  
$
2,313
  
$
2,235
 
Spare parts and warranties
  
150
   
113
   
254
   
211
 
Total Revenues
 
$
1,337
  
$
1,570
  
$
2,567
  
$
2,446
 
Units placed
During the FASB issued ASU 2016-15, “Classification of Certain Cash Receiptsperiods for the six months ended June 30, 2023 and Cash Payments.” The standard addresses several matters of diversity in practice in how certain cash receipts2022, the Company offered five products: (1) ReWalk Personal; (2) ReWalk Rehabilitation; (3) ReStore; (4) MyoCycle; and cash payments are presented and classified in the statement of cash flows including the presentation of debt extinguishment costs and distributions received from equity method investments. The standard is effective for fiscal years beginning after December 15, 2017, including interim periods and allows for retrospective adoption with early adoption permitted. The Company has chosen not(5) MediTouch. Due to adopt this standard early, and does not expect the adoptionunsatisfactory sales performance of the standard to have a material impact on the Company's consolidated financial statements.

Statement of Cash Flows - On November 17, 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force).” This ASU requires the statement of cash flows to explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents are to be included with cash and cash equivalents when reconciling the beginning of period and end of period amounts shown on the statement of cash flows.  ASU No. 2016-18 will be effective for the CompanyMediTouch product lines, we terminated this agreement as of January 1, 2018. 31, 2023.
ReWalk Personal and ReWalk Rehabilitation are SCI Products, which are currently designed for everyday use by paraplegic individuals at home and in their communities. The SCI Products are custom fitted for each user, as well as for use by paraplegic patients in the clinical rehabilitation environment, where they provide individuals access to valuable exercise and therapy. ReWalk Rehabilitation which is a ReWalk Personal 6.0 product sold with multiple sizes of our adjustable parts to allow different users the ability to train within a clinic.
ReStore is a powered, lightweight soft exo-suit intended for use in the rehabilitation of individuals with lower limb disability due to stroke in the clinical rehabilitation environment.
The Company does not expectalso sells Distributed Products that include the adoptionMyoCycle, which uses Functional Electrical Stimulation (“FES”) technology, and previously MediTouch tutor movement biofeedback devices. The Company markets the Distributed Products in the United States for use at home or in clinic. On January 31, 2023, the Company terminated the distribution agreement with MediTouch.
Units placed includes revenue from sales of this ASUSCI Products, ReStore and the Distributed Products.
For units placed, the Company recognizes revenue when it transfers control and title has passed to havethe customer. Each unit placed is considered an independent, unbundled performance obligation. The Company also offers a material impact onrent-to-purchase model in which the Company's consolidated financial statements.Company recognizes revenue ratably according to the agreed rental monthly fee.

11


REWALK ROBOTICS LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


Spare parts and warranties
Share Based Compensation - On May 10, 2017,
Spare parts are sold to private individuals, rehabilitation facilities and distributors. Revenue is recognized when the FASB issued ASU 2017-09, “Compensation - Stock Compensation (Topic 718), Scope of Modification Accounting.” This ASU clarifies when changesCompany satisfies a performance obligation by transferring control over promised goods or services to the termscustomer. Each part sold is considered an independent, unbundled performance obligation.
Warranties are classified as either an assurance type or conditionsa service type warranty. A warranty is considered an assurance type warranty if it provides the customer with assurance that the product will function as intended for a limited period of a share-based payment award must betime. An assurance type warranty is not accounted for as modifications. Entities will applya separate performance obligation under the modification accounting guidance ifrevenue model.
SCI Products include a five-year warranty. The first two years are considered as an assurance type warranty and the value, vesting conditionsadditional period is considered an extended service arrangement, which is a service type warranty. A service type warranty is either sold with a unit or classificationseparately for a unit for which the warranty has expired. A service type warranty is accounted as a separate performance obligation and revenue is recognized ratably over the life of the award changes. They will havewarranty.
The ReStore device is offered with a two-year warranty which is considered as assurance type warranty.
The Distributed Products are sold with an assurance-type warranty ranging from one year to make allten years depending on the specific product and part.
Contract balances (in thousands)
  
June 30,
  
December 31,
 
  
2023
  
2022
 
Trade receivable, net of credit losses (1)
 
$
774
  
$
1,036
 
Deferred revenues (1) (2)
 
$
1,276
  
$
1,191
 
(1)
Balance presented net of unrecognized revenues that were not yet collected.
(2)
During the six months ended June 30, 2023, $205 thousand of the December 31, 2022 deferred revenues balance was recognized as revenues.
Deferred revenue is composed primarily of unearned revenue related to service type warranty obligations as well as other advances and payments which the disclosures about modifications that are required today, in additionCompany received from customers prior to disclosing that compensation expense has not changed, tosatisfying the extent applicable. The ASU also clarifies that a modification to an award could be significant and therefore require disclosure, even if modification accounting is not required. ASU No. 2017-09 will be effective for fiscal years beginning after December 15, 2017. Early adoption is permitted, including in any interim periodperformance obligation, for which financial statements haverevenue has not yet been issued or made available for issuance. recognized.
The ASUCompany’s unearned performance obligations as of June 30, 2023 and the estimated revenue expected to be recognized in the future related to the service type warranty amounts to $1.2 million, which will be applied prospectivelyfulfilled over one to awards modified on or after the adoption date. The Company is currently evaluating the impact of the pending adoption of this ASU on its consolidated financial statements and related disclosures.five years.

12


REWALK ROBOTICS LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

c.b.
Concentrations of Credit Risks:

ConcentrationThe below table reflects the concentration of credit risk with respect to trade receivable is primarily limited to a customerfor the Company’s current customers as of June 30, 2023, to which substantial sales were made:
  
June 30,
  
December 31,
 
  
2023
  
2022
 
Customer A
  
20
%
  
27
%
Customer B
  
21
%
  
*
)
Customer C
  
*
)
  
13
%
Customer D
  
*
)
  
13
%
Customer E
  
*
)
  
11
%
*) Less than 10%
The allowance for credit losses is based on the Company makes substantial sales. One customer represented 12.7% and 0%Company’s assessment of the Company's trade receivable, netcollectability of accounts. The Company regularly assessed collectability based on a combination of factors, including an assessment of the current customer’s aging balance, asthe nature and size of Septemberthe customer, the financial condition of the customer, and future expected economic conditions. Trade receivables deemed uncollectable are charged against the allowance for credit losses when identified. As of June 30, 20172023 and December 31, 2016, respectively. A second customer represented 12.3% and 4.9% of the Company's2022, trade receivable, net balance as of September 30, 2017 and December 31, 2016, respectively. Trade receivables are presented net of allowance for doubtful accountscredit losses in the amount of $125 thousand and $333 thousand, respectively and net of sales return reserve of $105 thousand as of September 30, 2017 and December 31, 2016.$26 thousand.

d.
c.
Warranty provision

The Company provides a two-year standard
For assurance-type warranty, for its products. Thethe Company records a provision for the estimated cost to repair or replace products under warranty at the time of sale. Factors that affect the Company’s warranty reserve include the number of units sold, historical and anticipated rates of warranty repairs and the cost per repair.

  
US Dollars

in
thousands

 
Balance at December 31, 2022
 
$
92
 
Provision
  
139
 
Usage
  
(156
)
Balance at June 30, 2023
 
$
75
 
 US Dollars in thousands
Balance at December 31, 2016$498
Provision311
Usage(275)
Balance at September 30, 2017$534


NOTE 4:-    INVENTORY

The components of inventory are as follows (in thousands):

13

 September 30, December 31,
 2017 2016
Finished products3,500
 3,264
 $3,500
 $3,264


REWALK ROBOTICS LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

d.
Basic and diluted net loss per ordinary share:
Basic and diluted net loss per share was the same for each period presented as the inclusion of all potential shares of ordinary shares and warrants outstanding would have been anti-dilutive.
For the six months ended June 30, 2023 and 2022, the total number of ordinary shares related to the outstanding warrants and share option plans aggregated to 19,464,000 and 19,420,894, respectively, was excluded from the calculations of diluted loss per ordinary share since it would have an anti-dilutive effect.
 
e.
New Accounting Pronouncements
Recently Implemented Accounting Pronouncements
i.
Financial Instruments
In June 2016, FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in the more timely recognition of losses. The Company adopted ASU 2016-13 as of January 1, 2023. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

14


REWALK ROBOTICS LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 4:        INVENTORIES

The components of inventories are as follows (in thousands):
  
June 30,
  
December 31,
 
  
2023
  
2022
 
Finished products
 
$
2,511
  
$
2,421
 
Raw materials
  
527
   
508
 
  
$
3,038
  
$
2,929
 

NOTE 5:-        COMMITMENTS AND CONTINGENT LIABILITIES


a.
Purchase commitments:

The Company has contractual obligations to purchasegoods from its contract manufacturer Sanmina Corporation.as well as raw materials from different vendors. Purchase obligations do not include contracts that may be canceled without penalty. As of SeptemberJune 30, 2017,2023, non-cancelable outstanding obligations amounted to approximately $806 thousand.$1.8 million.

b.Royalties:
Operating lease commitment:

(i)
The Company operates from leased facilities in Israel, the United States and Germany. These leases expire in 2025. A portion of the Company’s facilities leases is generally subject to annual changes in the Consumer Price Index (the “CPI”). The changes to the CPI are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred.
(ii)
RRL and RRG lease cars for their employees under cancelable operating lease agreements expiring at various dates between 2023 and 2026. A subset of the Company’s car leases is considered variable. The variable lease payments for such cars leases are based on actual mileage incurred at the stated contractual rate. RRL and RRG have an option to be released from these agreements, which may result in penalties in a maximum amount of approximately $23 thousand as of June 30, 2023.
The Company’s future lease payments for its facilities and cars, which are presented as current maturities of operating leases and non-current operating leases liabilities on the Company's condensed consolidated balance sheets as of June 30, 2023 are as follows (in thousands):
2023
 
$
334
 
2024
  
641
 
2025
  
306
 
2026
  
4
 
Total lease payments
  
1,285
 
Less: imputed interest
  
(128
)
Present value of future lease payments
  
1,157
 
Less: current maturities of operating leases
  
(616
)
Non-current operating leases
 
$
541
 
Weighted-average remaining lease term (in years)
  
2.19
 
Weighted-average discount rate
  
9.9
%
Lease expense under the Company’s operating leases was $196 thousand and $184 thousand for the three months ended June 30, 2023 and 2022, respectively. For the six months ended June 30, 2023, and 2022, the lease expense was $388 thousand and $363 thousand, respectively.

15


REWALK ROBOTICS LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

c.
Royalties:
The Company’s research and development efforts are financed, in part, through funding from the Israel Innovation Authority (the “IIA”(“IIA”) (formerly known as the Israeli Office of the Chief Scientist in the Israel Ministry of Economy). During the nine months ended September 30, 2017 the Company received $828 thousand from the IIA to fund its research and development efforts.
Since the Company’s inception through SeptemberJune 30, 2017,2023, the Company received funding from the IIA in the total amount of $1.6$2.4 million. Out of the $1.6$2.4 million in funding from the IIA, a total amount of $1.2$1.6 million were royalty bearingroyalty-bearing grants, (as of September 30, 2017, the Company paid royalties to the IIA in the total amount of $50 thousand), while a total amount of $400 thousand was received in consideration of 5,237209 convertible preferred A shares, which converted after ourthe Company’s initial public offering in September 2014 into ordinary shares in a conversion ratio of 1 to 1.1, while $430 thousand was received without future obligation. The Company is obligated to pay royalties to the IIA, amounting to 3%-3.5% of the sales of the products and other related revenues generated from such projects, up to 100% of the grants received. The royalty payment obligations also bear interest at the LIBOR rate. The obligation to pay these royalties is contingent on actual sales of the applicable products and in the absence of such sales, no payment is required.
Additionally, the License Agreement requires the Company to pay Harvard royalties on net sales, see Note 6 below for more information about the Collaboration Agreement and the License Agreement.
As of SeptemberJune 30, 2017,2023, the Company paid royalties to the IIA in the total amount of $110 thousand.
There were no royalties payments for three and six months ended June 30, 2023 and $1 thousand for the three months ended June 30, 2022. For the six months ended June 30, 2022, the royalties expenses were $4 thousand.
As of June 30, 2023, the contingent liability to the IIA amounted to $1.1$1.6 million. The Israeli Research and Development Law provides that know-how developed under an approved research and development program may not be transferred to third parties without the approval of the IIA. Such approval is not required for the sale or export of any products resulting from such research or development. The IIA, under special circumstances, may approve the transfer of IIA-funded know-how outside Israel, in the following cases:

(a) the grant recipient pays to the IIA a portion of the sale price paid in consideration for such IIA-funded know-how or in consideration for the sale of the grant recipient itself, as the case may be, which portion will not exceed six times the amount of the grants received plus interest (or three times the amount of the grant received plus interest, in the event that the recipient of the know-how has committed to retain the R&D activities of the grant recipient in Israel after the transfer); (b) the grant recipient receives know-how from a third party in exchange for its IIA-funded know-how; (c) such transfer of IIA-funded know-how arises in connection with certain types of cooperation in research and development activities; or (d) If such transfer of know-how arises in connection with a liquidation by reason of insolvency or receivership of the grant recipient.

16


REWALK ROBOTICS LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 d.
Liens:

c.Liens:

As discussed in Note 6 to our audited consolidated financial statements included inpart of the Company's annual report on Form 10-K for the fiscal year ended December 31, 2016, filed with the SEC on February 17, 2017, as amended on Form 10-K/A filed with the SEC on April 27, 2017 (the “2016 Form 10-K”), the Company is party to the Loan Agreement with Kreos pursuant to which Kreos extended a $20 million line of credit to the Company. In connection with the Loan Agreement, the Company granted Kreos a first priority security interest over all of its assets, including intellectual property and equity interests in its subsidiaries, subject to certain permitted security interests.
The Company'sCompany’s other long-term assets which were in theand restricted cash, an amount of $850$652 thousand as of September 30, 2017, havehas been pledged as security in respect of a guarantee granted to a third party.party. Such deposit cannot be pledged to others or withdrawn without the consent of such third party.

d.e.
Legal Claims:

Occasionally, the Company is involved in various claims such as product liability claims, lawsuits, regulatory examinations, investigations, and other legal matters arising, for the most part, in the ordinary course of business. The outcome of any pending or threatened litigation and other legal matters is inherently uncertain. In making a determination regarding accruals, using available information, the Company evaluates the likelihood of an unfavorable outcome in legal or regulatory proceedings to which the Company is a partyuncertain, and records a loss contingency when it is probable a liability has been incurred and the amount of the loss can be reasonably estimated. Where the Company determines an unfavorable outcome is not probable or reasonably estimable, the Company does not accrue for any potential litigation loss. These subjective determinations are based on the status of such legal or regulatory proceedings, the merits of our defenses, and consultation with legal counsel. Actual outcomes of these legal and regulatory proceedings may materially differ from the Company’s current estimates. It is possible that resolution of one or more of the legalany such matters currently pending or threatened could result in losses material to the Company’s consolidated results of operations, liquidity, or financial condition.

As set forth below, between September 2016 and January 2017, eight substantially similar putative securities class actions were filed against the Company. Four of these actions have been dismissed on procedural grounds, one was voluntarily dismissed and three are pending, including two actions which have been consolidated and one action brought by the plaintiffs whose actions were dismissed.

Dismissed Actions:
On September 20, November 3, November 9, and November 10, 2016, respectively, four putative class actions on behalf of alleged shareholders that purchased or acquired the Company's ordinary shares pursuant and/or traceable to the registration statement used in connection with the Company's IPO were commenced in the Superior Court of the State of California, County of San Mateo. The actions were filed against the Company, certain of the Company's current and former directors and officers, and the underwriters of the Company's IPO. We refer to these actions as the “California State Court Actions.” The complaints in the California State Court Actions asserted various claims under the Securities Act. Each of the California State Court Actions was dismissed for lack of personal jurisdiction in January 2017.
On January 24, 2017, a substantially similar class action was commenced in the United States District Court for the Northern District of California (Case No. 4:17-cv-362) against the same defendants as in the California State Court Actions plus certain additional defendants. This action is referred to as the “California Federal Court Action.” On March 23, 2017, this case was voluntarily dismissed.
Pending Actions:
On or about October 31, 2016, a class action with claims substantially similar to the California State Court Actions was commenced in the Massachusetts Superior Court, Suffolk County, by a different plaintiff (Civ. Action No. 16-3336), alleging claims under Section 11 of the Securities Act against the Company, certain of the Company's current and former directors and officers, and the underwriters of the Company's IPO, and alleging claims under Section 15 of the Securities Act against the Company and certain of the Company's current and former directors and officers.
REWALK ROBOTICS LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

On or about November 30, 2016, a substantially similar class action was commenced in the Massachusetts Superior Court, Suffolk County, by a different plaintiff (Civ. Action No. 16-3670) alleging claims under Sections 11 and 15 of the Securities Act against the same defendants as in the action commenced on October 31, 2016, and also alleging claims under Section 12(a)(2) of the Securities Act against the Company, certain of the Company's current and former directors and officers, and the underwriters of the Company's IPO. This action was ordered consolidated in the Massachusetts Superior Court, Suffolk County on January 9, 2017 with the action commenced on October 31, 2016, and the two actions are referred to as the “Consolidated Massachusetts State Court Actions”. The plaintiffs in the Consolidated Massachusetts State Court Actions filed a consolidated amended complaint on March 20, 2017. The Company moved to dismiss the Consolidated Massachusetts State Court Actions on June 2, 2017. For more information, see Note 11.
On or about January 31, 2017, a substantially similar class action was commenced in the United States District Court for the District of Massachusetts (Case No. 1:17-cv-10169) by four of the same plaintiffs who commenced the California State Court Actions, and two additional plaintiffs, alleging claims under Sections 11 and 12(a)(2) of the Securities Act against the Company, certain of the Company's current and former directors and officers, and the underwriters of the Company's IPO, and alleging claims under Section 15 of the Securities Act against certain of the Company's current and former directors and officers. This action is referred to as the “Massachusetts Federal Court Action.” On July 6, 2017, the Company moved to stay the Massachusetts Federal Court Action. The plaintiffs in the Massachusetts Federal Court Action filed a consolidated amended complaint on August 9, 2017. For more information, see Note 11.

The complaints in all of the actions listed above allege that the Company's registration statement used in connection with its IPO failed to disclose that the Company was unprepared or unable to comply with certain regulatory special controls and to provide the FDA with a postmarket surveillance study on the Company's ReWalk Personal device, and that, Except as a result of such alleged omission, the plaintiffs suffered damages. The Massachusetts Federal Court Action also alleges that certain statements issued by the Company after its IPO are materially misleading because they omitted certain information. The Company believes that the allegations made in the complaints are without merit and intends to defend itself vigorously against the complaints relating to the three pending actions.

Based on information currently available and the early stage of the litigation,otherwise disclosed herein, the Company is unablenot currently party to reasonably estimate a possible loss or range of possible losses, if any with regard to these lawsuits; therefore, no litigation reserve has been recorded in the Company's consolidated balance sheet as of September 30, 2017. The Company will continue to evaluate information as it becomes known and will record an estimate for losses at the time or times when it is probable that a loss will be incurred and the amount of the loss is reasonably estimable.material litigation.
REWALK ROBOTICS LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)



NOTE 6:-    LOAN AGREEMENT WITH KREOS AND RELATED WARRANT TO PURCHASE ORDINARY SHARES

On December 30, 2015, the Company entered into the loan agreement (the "Loan Agreement") with Kreos Capital V (Expert Fund) Limited ("Kreos"), pursuant to which Kreos extended a line of credit to the Company in the amount of $20 million. For more information, see Note 6 to our audited consolidated financial statements included in our 2016 Form 10-K.

On June 9, 2017, the Company and Kreos entered into the First Amendment of the Loan Agreement (the "Loan Amendment"). As of that date the outstanding principal amount under the Loan Agreement (the "Outstanding Principal Amount") was $17.2 million. Under the Loan Amendment $3 million of the Outstanding Principal Amount was extended by an additional 3 years with the same interest rate and became subject to repayment in accordance with, and subject to the terms of, a secured convertible promissory note (the "Kreos Convertible Note"). The Kreos Convertible Note may be converted into up to 2,523,660 ordinary shares of the Company at a fixed conversion price of $1.268 per share (subject to customary antidilution adjustments in connection with a share split, reverse share split, share dividend, combination, reclassification or otherwise), thus reducing the Outstanding Principal Amount by $3 million to $14.2 million. Kreos may convert the then-outstanding principal under the Kreos Convertible Note in whole or in part, in one or more occasions, at any time until the earlier of (i) the maturity date of June 9, 2020 or (ii) a "Change of Control", as defined in the Loan Agreement. In addition, at any time until the maturity date of June 9, 2020, Kreos has the right to convert the “end of loan payments” under the Loan Agreement, in whole or in part, into ordinary shares at a conversion price of $1.268 per share. Because the aggregate amount the Company drew down under the Loan Agreement equals $20 million and the total “end of loan payments” equal $200 thousand, Kreos has the right to convert up to 157,729 additional ordinary shares (subject to customary anti-dilution adjustments), making the total number of ordinary shares issuable upon conversion of the Kreos Convertible Note 2,523,660 (subject to customary anti-dilution adjustments).
The Outstanding Principal Amount under the Loan Agreement is not convertible and remains subject to repayment in accordance with the terms and conditions of the Loan Agreement, provided that such amount shall be repaid by the Company in accordance with an amended repayment schedule. The Company concluded that the exchange of the $3 million for the convertible promissory note is not a troubled debt restructuring under applicable accounting guidance because the lenders did not grant a concession. The modification was analyzed under ASC 470 Debt to determine if extinguishment accounting was applicable. Under ASC 470-50-40-10 a modification or an exchange that adds or eliminates a substantive conversion option as of the conversion date is always considered substantial and requires extinguishment accounting. Since this modification added a substantive conversion option, extinguishment accounting is applicable. The difference between the fair value of the new debt with the pre-modification carrying amount of the old debt represented a loss on extinguishment in the amount of $313 thousand.

According to the Loan Agreement the repayment period will be extended to 36 months if the Company raises $20 million or more in connection with the issuance of shares of its capital stock (including debt securities convertible into shares of the Company’s capital stock). As of June 30, 2017 the Company had raised more than $20 million and therefore the repayment period was extended by an additional 12 months to 36 months.


NOTE 7:-    RESEARCH COLLABORATION AGREEMENT AND LICENSE AGREEMENT

On May 16, 2016, the Company entered into a Research Collaboration Agreement (“Collaboration(as amended, the “Collaboration Agreement”) and an Exclusive License Agreement (“License(as amended, the “License Agreement”) with Harvard.

Under the Collaboration Agreement, Harvard and the Company have agreed to collaborate on research regarding the development of lightweight “soft suit” exoskeleton system technologies for lower limb disabilities, which are intended to treat stroke, multiple sclerosis, mobility limitations for the elderly and other medical applications. The Company has committed to pay in quarterly installments for the funding of this research, subject to a minimum funding commitment under applicable circumstances. The Collaboration Agreement will expireconcluded on May 16, 2021.March 31, 2022.

Under the License Agreement, Harvard has granted the Company an exclusive, worldwide royalty-bearing license under certain patents of Harvard relating to lightweight “soft suit” exoskeleton system technologies for lower limb disabilities, a royalty-free license under certain related know-how and the option to obtain a license under certain inventions conceived under the joint research collaboration.

REWALK ROBOTICS LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The License Agreement requiresrequired the Company to pay Harvard an upfront fee, reimbursements for expenses that Harvard incurred in connection with the licensed patents, royalties on net sales and several milestone payments contingent upon the achievement of certain product development and commercialization milestones. The Harvard License Agreement will continue in full force and effect until the expiration of the last-to-expire valid claim of the licensed patents. As of SeptemberJune 30, 2017,2023, the Company did not achieve anyachieved three of thesethe milestones and is evaluatingwhich represent all development milestones under the License Agreement. The Company continues to evaluate the likelihood that the other milestones will be achieved on a quarterly basis. Moreover, since such royalties are dependent on future product sales which are neither determinable nor reasonably estimable, these royalty payments are not recorded on the Company's condensed consolidated balance sheet as of September 30, 2017.

The Company's total payment obligation under the Collaboration Agreement and the License Agreement is $6.3 million, some of which is subject to a minimum funding commitment under applicable circumstances as indicated above.

The Company has recorded expenses in the amount of $465$10 thousand and $267$24 thousand during the three months period ended September 30, 2017 and September 30, 2016 respectively. The Company has recorded expenses in the amount of $1.2 million and $1.3 million during the nine months period ended September 30, 2017 and September 30, 2016 respectively. Those expenses are part of the total payment obligation indicated above, as research and development expenses related to the License Agreement and to the Collaboration Agreement.Agreement for the three months ended June 30, 2023, and 2022, respectively. For the six months ended June 30, 2023, and 2022, the expense were $21 thousand and $34 thousand, respectively. No withholding tax was deducted from the Company’s payments to Harvard in respect of the Collaboration Agreement and the License Agreement since this is not taxable income in Israel in accordance with Section 170 of the Israel Income Tax Ordinance 1961-5721.


17


REWALK ROBOTICS LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 8:-    7: SHAREHOLDERS’ EQUITY
a.
a.
Share option plans:

As of SeptemberJune 30, 2017,2023, and December 31, 2016,2022, the Company had reserved 602,158 and 380,1531,617,255 and 2,934,679 ordinary shares, respectively, for issuance to the Company’s and its affiliates’ respective employees, directors, officers, and consultants pursuant to equity awards granted under the Company's 2014 Incentive Compensation Plan (the “2014 Plan”).
Options to purchase ordinary shares generally vest over four years, with certain options to non-employee directors vesting quarterly over one year. Any option that is forfeited or canceled before expiration becomes available for future grants under the 2014 Plan.
The fair value for
There were no options granted during the ninesix months ended SeptemberJune 30, 20172023 and September 30, 2016 was estimated at the date of the grant using a Black-Scholes-Merton option pricing model with the following assumptions:2022.

  Nine Months Ended September 30,
  2017 2016
Expected volatility 56% - 58% 53% - 60%
Risk-free rate 1.78% - 2.07% 1.16%-1.60%
Dividend yield —% —%
Expected term (in years) 5.31-6.11 5.31-6.11
Share price $1.3- $2.1 $6.8- $11.88

The fair value of restricted share units (“RSUs”)RSUs granted is determined based on the price of the Company's ordinary shares on the date of grant.
A summary of employee share options to purchase ordinary shares and RSUsactivity during the ninesix months ended SeptemberJune 30, 20172023 is as follows:
REWALK ROBOTICS LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 Nine Months Ended September 30, 2017
 Number 
Average
exercise
price
 
Average
remaining
contractual
life (in years) (1)
 
Aggregate
intrinsic
value (in
thousands)
Options and RSUs outstanding at the beginning of the period2,251,014
 $6.47
 7.80 $1,740
Options granted413,746
 2.01
    
RSUs granted230,484
 
    
Options exercised (2)(30,192) 1.39
    
RSUs vested (2)(59,450) 
    
RSUs forfeited(44,196) 
    
Options forfeited(169,008) 2.99
    
        
Options and RSUs outstanding at the end of the period2,592,398
 $5.39
 7.45 $578
        
Options exercisable at the end of the period1,272,727
 $6.12
 6.46 $64
  
Number
  
Average
exercise
price
  
Average
remaining
contractual life
(in years)
  
Aggregate
intrinsic
value
(in thousands)
 
Options outstanding as of December 31, 2022
  
43,994
  
$
41.27
   
4.39
  
$
-
 
Granted
  
-
   
-
   
-
   
-
 
Exercised
  
-
   
-
   
-
   
-
 
Forfeited
  
(888
)
  
36.99
   
-
   
-
 
Options outstanding as of June 30, 2023
  
43,106
  
$
41.35
   
3.96
  
$
-
 
                 
Options exercisable as of June 30, 2023
  
43,106
  
$
41.35
   
3.96
  
$
-
 

(1)Calculation of weighted average remaining contractual term does not include RSUs, which have an indefinite contractual term.
(2)During the nine months period ended September 30, 2017, the aggregate number of ordinary shares that were issued pursuant to RSUs that became vested and options that were exercised on a net basis was 87,795 ordinary shares.

The weighted average grant date fair value of options granted during the nine months ended September 30, 2017 and September 30, 2016 was $1.10 and $4.75, respectively. The weighted average grant date fair value of RSUs granted during the nine month period ended September 30, 2017 and September 30, 2016 was $2.01 and $9.28, respectively.

The aggregate intrinsic value in the table above represents the total intrinsic value that would have been received by the option holders had all option holders that hold options with positive intrinsic value exercised their options on the last date of the exercise period. Total intrinsicNo options were exercised during the six months ended June 30, 2023 and 2022.

18


REWALK ROBOTICS LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

A summary of employees and non-employees RSUs activity during the six months ended June 30, 2023 is as follows:
  
Number of shares underlying outstanding RSUs
  
Weighted average grant date fair value
 
Unvested RSUs as of December 31, 2022
  
2,755,057
  
$
1.16
 
Granted
  
1,415,000
   
0.60
 
Vested
  
(345,240
)
  
1.26
 
Forfeited
  
(96,688
)
  
1.19
 
Unvested RSUs as of June 30, 2023
  
3,728,129
  
$
0.92
 
The weighted average grant date fair value of options exercised for each ofRSUs granted during the ninesix months ended SeptemberJune 30, 20172023, and September 30, 20162022 was $29 thousand$0.60 and $844 thousand$1.14, respectively.
As of SeptemberJune 30, 2017,2023, there were $5.1$2.8 million of total unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the Company's 2012 Equity Incentive Plan and its 2014 Plan. This cost is expected to be recognized over a period of approximately 2.13.3 years.

The number of options and RSUs outstanding as of SeptemberJune 30, 20172023 is set forth below, with options separated by range of exercise price. The below does not reflect the results of the Equity Exchange Program (as defined below) completed on October 5, 2017.

REWALK ROBOTICS LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Range of exercise price Options and RSUs outstanding as of September 30, 2017 
Weighted
average
remaining
contractual
life (years) (1)
 Options exercisable as of September 30, 2017 
Weighted
average
remaining
contractual
life (years) (1)
RSUs only 353,437
 
 
 
$0.82 31,803
 3.29
 31,803
 3.29
$1.32 335,095
 4.75
 330,095
 4.67
$1.47 - $2.20 762,937
 8.07
 338,830
 6.35
$6.80- $8.99 663,382
 8.09
 322,536
 7.96
$9.22- $10.98 201,343
 8.42
 75,586
 8.10
$19.62-$20.97 244,401
 7.17
 173,877
 7.15
  2,592,398
 7.45
 1,272,727
 6.46
Range of exercise price
 
Options and RSUs outstanding as of June 30, 2023
  
Weighted
average
remaining
contractual
life (years) (1)
  
Options outstanding and exercisable as of June 30, 2023
  
Weighted
average
remaining
contractual
life (years) (1)
 
RSUs only
  
3,728,129
   
-
   
-
   
-
 
$5.37
  
12,425
   
5.75
   
12,425
   
5.75
 
$20.42 - $33.75
  
13,285
   
4.73
   
13,285
   
4.73
 
$37.14 - $38.75
  
8,090
   
0.48
   
8,090
   
0.48
 
$50 - $52.50
  
6,731
   
3.97
   
6,731
   
3.97
 
$182.5 - $524
  
2,575
   
2.35
   
2,575
   
2.35
 
   
3,771,235
   
3.96
   
43,106
   
3.96
 
 
(1)
Calculation of weighted average remaining contractual term does not include the RSUs that were granted, which have an indefinite contractual term.

On September 6, 2017, the Company commenced a one-time equity award exchange program (the “Equity Exchange Program”), offering to certain eligible employees, executive officers and consultants the opportunity to cancel certain outstanding “underwater” stock options issued under the 2014 Plan, in exchange for the grant under such plan of a lesser number of RSUs. The Company's non-employee directors and retirees were not eligible to participate in the Equity Exchange Program. The Company conducted the Equity Exchange Program as a “value-for-value” exchange, pursuant to which the Company issued new RSUs with a value approximately equal to the value of the options that are surrendered, in accordance with the terms approved by the Company’s shareholders at the annual meeting of shareholders held on June 27, 2017. The primary purpose of the Equity Exchange Program was to restore the intended retention and incentive value of certain employee and consultant equity awards. Participation in the Equity Exchange Program was voluntary. The Company used the 52-week high closing price of its ordinary shares (as measured at the commencement of the Equity Exchange Program) as a threshold for options eligible to be exchanged. For more information on the results of the Equity Exchange Program, see Note 11.


b.
b.
Share-based awards to non-employee consultants:
 
The Company granted 3,454 options to a non-employee consultant on March 12, 2007, which were exercised during the nine months ended September 30, 2017. The Company granted 14,357 fully vested RSUs during the nine months ended September 30, 2017 to non-employee consultants. As of SeptemberJune 30, 2017,2023, there are no outstanding options or RSUs held by non-employee consultants.

19


REWALK ROBOTICS LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

c.
Treasury shares:
On June 2, 2022, the Company’s Board of Directors approved a share repurchase program to repurchase up to $8.0 million of its Ordinary Shares, par value NIS 0.25 per share.On July 21, 2022, the Company received approval from an Israeli court for the share repurchase program. The program was scheduled to expire on the earlier of January 20, 2023, or reaching $8.0 million of repurchases. On December 22, 2022, the Company’s Board of Directors approved an extension of the repurchase program, with such extension to be in the aggregate amount of up to $5.8 million. The extension was approved by an Israeli court on February 9, 2023, and it expired on August 9, 2023.
As of June 30, 2023, pursuant to the Company’s share repurchase program, the Company had repurchased a total of 4,022,607 of its outstanding ordinary shares at a total cost of $3.5 million.

20


REWALK ROBOTICS LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

d.
c.
Warrants to purchase ordinary shares:

The following table summarizes information about warrants outstanding and exercisable that were classified as equity as of SeptemberJune 30, 2017:2023:
REWALK ROBOTICS LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Issuance date
 
Warrants
outstanding
  
Exercise price
per warrant
  
Warrants
outstanding
and
exercisable
 
Contractual
term
  
(number)
     
(number)
  
December 31, 2015 (1)
  
4,771
  
$
7.500
   
4,771
 
See footnote (1)
December 28, 2016 (2)
  
1,908
  
$
7.500
   
1,908
 
See footnote (1)
November 20, 2018 (3)
  
126,839
  
$
7.500
   
126,839
 
November 20, 2023
November 20, 2018 (4)
  
106,680
  
$
9.375
   
106,680
 
November 15, 2023
February 25, 2019 (5)
  
45,600
  
$
7.187
   
45,600
 
February 21, 2024
April 5, 2019 (6)
  
408,457
  
$
5.140
   
408,457
 
October 7, 2024
April 5, 2019 (7)
  
49,015
  
$
6.503
   
49,015
 
April 3, 2024
June 5, 2019, and June 6, 2019 (8)
  
1,464,665
  
$
7.500
   
1,464,665
 
June 5, 2024
June 5, 2019 (9)
  
87,880
  
$
9.375
   
87,880
 
June 5, 2024
June 12, 2019 (10)
  
416,667
  
$
6.000
   
416,667
 
December 12, 2024
June 10, 2019 (11)
  
50,000
  
$
7.500
   
50,000
 
June 10, 2024
February 10, 2020 (12)
  
28,400
  
$
1.250
   
28,400
 
February 10, 2025
February 10, 2020 (13)
  
105,840
  
$
1.563
   
105,840
 
February 10, 2025
July 6, 2020 (14)
  
448,698
  
$
1.760
   
448,698
 
January 2, 2026
July 6, 2020 (15)
  
296,297
  
$
2.278
   
296,297
 
January 2, 2026
December 8, 2020 (16)
  
586,760
  
$
1.340
   
586,760
 
June 8, 2026
December 8, 2020 (17)
  
108,806
  
$
1.792
   
108,806
 
June 8, 2026
February 26, 2021 (18)
  
5,460,751
  
$
3.600
   
5,460,751
 
August 26, 2026
February 26, 2021 (19)
  
655,290
  
$
4.578
   
655,290
 
August 26, 2026
September 29, 2021 (20)
  
8,006,759
  
$
2.000
   
8,006,759
 
March 29, 2027
September 29, 2021 (21)
  
960,811
  
$
2.544
   
960,811
 
September 27, 2026
   
19,420,894
       
19,420,894
  

Issuance dateWarrants outstanding Exercise
price
per warrant
 Warrants
exercisable
 Contractual term
 (number)   (number)  
        
July 14, 2014 (1)403,804
 $10.08
 403,804
 July 13, 2018
December 30, 2015 (2)119,295
 $9.64
 119,295
 See footnote (2)
November 1, 2016 (3)2,437,500
 $4.75
 2,437,500
 November 1, 2021
December 28, 2016 (4)47,717
 $9.64
 47,717
 See footnote (4)
 3,008,316
   3,008,316
  

(1)
(1)
Represents warrants to purchasefor ordinary shares atissuable upon an exercise price of $10.08$7.500 per share, which were granted on July 14, 2014 as part of our series E investment round.
(2)Represents a warrant to purchase ordinary shares at an exercise price of $9.64 per share, which was issued on December 31, 2015 to Kreos Capital V (Expert) Fund Limited (“Kreos”) in connection with a loan made by Kreos to us. The warrant isthe Company and are currently exercisable (in whole or in part) until the earlier of (i) December 30, 2025 or (ii) immediately prior to the consummation of a merger, consolidation, or reorganization of usthe Company with or into, or the sale or license of all or substantially all the assets or shares of usthe Company to, any other entity or person, other than a wholly-ownedwholly owned subsidiary of us,the Company, excluding any transaction in which ourthe Company’s shareholders prior to the transaction will hold more than 50% of the voting and economic rights of the surviving entity after the transaction. None of these warrants had been exercised as of SeptemberJune 30, 2017.2023.

21


REWALK ROBOTICS LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(2)
(3)
Represents common warrants that were issued as part of our follow-on offering in November 2016.
(4)Represents a warrant in the amount of 47,717 ordinary shares issued to Kreos as part of the $8.0 million drawdown under the Loan Agreement which occurred on December 28, 2016. See footnote 2 above1 for exercisability terms.

 d.
(3)
Represents common warrants that were issued as part of the Company’s follow-on public offering in November 2018.
(4)
Represents common warrants that were issued to the underwriters as compensation for their role in the Company’s follow-on public offering in November 2018.
(5)
Represents warrants that were issued to the exclusive placement agent as compensation for its role in the Company’s follow-on public offering in February 2019.
(6)
Represents warrants that were issued to certain institutional purchasers in a private placement in the Company’s registered direct offering of ordinary shares in April 2019.
(7)
Represents warrants that were issued to the placement agent as compensation for its role in the Company’s April 2019 registered direct offering.
(8)
Represents warrants that were issued to certain institutional investors in a warrant exercise agreement on June 5, 2019, and June 6, 2019, respectively.
(9)
Represents warrants that were issued to the placement agent as compensation for its role in the Company’s June 2019 warrant exercise agreement and concurrent private placement of warrants.
(10)
Represents warrants that were issued to certain institutional investors in a warrant exercise agreement in June 2019.
(11)
Represents warrants that were issued to the placement agent as compensation for its role in the Company’s June 2019 registered direct offering and concurrent private placement of warrants.
(12)
Represents warrants that were issued to certain institutional purchasers in a private placement in the Company’s best efforts offering of ordinary shares in February 2020. As of June 30, 2023, 3,740,100 warrants were exercised for total consideration of $4,675,125. During the three months that ended June 30, 2023, no warrants were exercised.
(13)
Represents warrants that were issued to the placement agent as compensation for its role in the Company’s February 2020 best efforts offering. As of June 30, 2023, 230,160 warrants were exercised for total consideration of $359,625. During the three months that ended June 30, 2023, no warrants were exercised.
(14)
Represents warrants that were issued to certain institutional purchasers in a private placement in our registered direct offering of ordinary shares in July 2020. As of June 30, 2023, 2,020,441 warrants were exercised for total consideration of $3,555,976. During the three months that ended June 30, 2023, no warrants were exercised.
(15)
Represents warrants that were issued to the placement agent as compensation for its role in the Company’s July 2020 registered direct offering.

22


REWALK ROBOTICS LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(16)
Represents warrants that were issued to certain institutional purchasers in a private placement in our private placement offering of ordinary shares in December 2020. As of June 30, 2023, 3,598,072 warrants were exercised for total consideration of $4,821,416. During the three months that ended June 30, 2023, no warrants were exercised.
(17)
Represents warrants that were issued to the placement agent as compensation for its role in the Company’s December 2020 private placement. As of June 30, 2023, 225,981 warrants were exercised for total consideration of $405,003. During the three months that ended June 30, 2023, no warrants were exercised.
(18)
Represents warrants that were issued to certain institutional purchasers in a private placement in our private placement offering of ordinary shares in February 2021.
(19)
Represents warrants that were issued to the placement agent as compensation for its role in the Company’s February 2021 private placement.
(20)
Represents warrants that were issued to certain institutional purchasers in a private placement in our registered direct offering of ordinary shares in September 2021.
(21)
Represents warrants that were issued to the placement agent as compensation for its role in the Company’s September 2021 registered direct offering.
e.
Share-based compensation expense for employees and non-employees:
 
The Company recognized non-cash share-based compensation expense for both employees and non-employees in the condensed consolidated statements of operations for the periods shown below as follows (in thousands):
  
Six Months Ended June 30,
 
  
2023
  
2022
 
Cost of revenues
 
$
1
  
$
6
 
Research and development, net
  
66
   
33
 
Sales and marketing
  
164
   
96
 
General and administrative
  
391
   
191
 
Total
 
$
622
  
$
326
 
 Nine Months Ended September 30,
 2017 2016
Cost of revenues$57
 $78
Research and development, net344
 398
Sales and marketing, net585
 606
General and administrative1,611
 1,376
Total$2,597
 $2,458

23


REWALK ROBOTICS LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


e.At-the-market offering program:

On May 10, 2016, the Company entered into an equity distribution agreement (the “Equity Distribution Agreement”) with Piper Jaffray, pursuant to which it may offer and sell, from time to time, ordinary shares having an aggregate offering price of up to $25 million, through Piper Jaffray acting as its agent. Subject to the terms and conditions of the Equity Distribution Agreement, Piper Jaffray will use its commercially reasonable efforts to sell on the Company’s behalf all of the ordinary shares requested to be sold by the Company, consistent with its normal trading and sales practices. Piper Jaffray may also act as principal in the sale of ordinary shares under the Equity Distribution Agreement. Sales may be made under the Company's Form S-3, in what may be deemed “at-the-market” equity offerings as defined in Rule 415 promulgated under the Securities Act of 1933, as amended (the “ATM Offering Program”). Sales may be made directly on or through the NASDAQ Capital Market, the existing trading market for the Company's ordinary shares, to or through a market maker other than on an exchange or otherwise, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices, and/or any other method permitted by law, including in privately negotiated transactions. Piper Jaffray is entitled to compensation at a fixed commission rate of 3.0% of the gross sales price per share sold through it as agent under the Equity Distribution Agreement. Where Piper Jaffray acts as principal in the sale of ordinary shares under the Equity Distribution Agreement, such rate of compensation will not apply, but in no event will the total compensation of Piper Jaffray, when combined with the reimbursement of Piper Jaffray for the out-of-pocket fees and disbursements of its legal counsel, exceed 8.0% of the gross proceeds received from the sale of the ordinary shares. The Company is not required to sell any of its ordinary shares at any time.

The Company may raise up to $25 million under its ATM Offering Program pursuant to the terms of its agreement with the sales agent. However, due to limitations under the rules of Form S-3, which have applied to the Company since it filed its annual report on Form 10-K for the fiscal year ended December 31, 2016 on February 17, 2017, taking into account ordinary shares issued and settled under the Company’s ATM Offering Program since February 17, 2017, as of September 30, 2017, the Company may issue up to $4.3 million in primary offerings under its effective shelf registration statement on Form S-3 (File No. 333- 209833), including its ATM Offering Program, during the 12 months following February 17, 2017, unless and until it is no longer subject to such limitations.

During the nine months ended September 30, 2017, the Company issued and sold 5,379,908 ordinary shares at an average price of $1.76 per share under its ATM Offering Program. The gross proceeds to the Company were $9.4 million, and the net aggregate proceeds after deducting commissions, fees and offering expenses in the amount of $439 thousand were $9.0 million. As a result, from the inception of the ATM Offering Program in May 2016 until September 30, 2017, the Company had sold 6,071,970 ordinary shares under the ATM Offering Program for gross proceeds of $14.0 million and net proceeds to the Company of $13.1 million (after commissions, fees and expenses). Additionally, as of that date, the Company had paid Piper Jaffray compensation of $420 thousand and had incurred total expenses of approximately $907 thousand in connection with the ATM Offering Program.NOTE 8: FINANCIAL (EXPENSES) INCOME, NET
 

NOTE 9:-    FINANCIAL EXPENSES, NET
The components of financial expenses,(expenses) income, net were as follows (in thousands):
 
Three Months Ended September 30, Nine Months Ended September 30, 
Three Months Ended
June 30,
  
Six Months Ended
June 30,
 
2017 2016 2017 2016 
2023
  
2022
  
2023
  
2022
 
Foreign currency transactions and other$(37) $17
 $(113) $60
 
$
9
  
$
(39
)
 
$
22
  
$
(54
)
Financial expenses related to loan agreement with Kreos510
 495
 1,932
 1,462
Interest Income
 
557
  
-
  
630
  
-
 
Bank commissions6
 5
 24
 28
  
(8
)
  
(5
)
  
(16
)
  
(14
)
Income related to hedging transactions
 (9) 
 (36)
$479
 $508
 $1,843
 $1,514
 
$
558
  
$
(44
)
 
$
636
  
$
(68
)

REWALK ROBOTICS LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 10:-    9:GEOGRAPHIC INFORMATION AND MAJOR CUSTOMER AND PRODUCT DATA

Summary information about geographic areas:areas:
ASC 280, “Segment Reporting” establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing the enterprise’s performance. The Company manages its business on the basis of one reportable segment and derives revenues from selling systems and services (see Note 1 for a brief description of the Company’s business).services. The belowfollowing is a summary of revenues within geographic areas (in thousands):
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Revenues based on customer’s location:       
Israel$
 $
 $
 $
United States801
 710
 4,242
 2,976
Europe931
 404
 1,996
 908
Asia-Pacific
 286
 
 394
Total revenues$1,732
 $1,400
 $6,238
 $4,278
 
 September 30, December 31,
 2017 2016
Long-lived assets by geographic region (*):   
Israel$330
 $476
United States361
 565
Germany215
 217
 $906
 $1,258
  
Three Months Ended
June 30,
  
Six Months Ended
June 30,
 
  
2023
  
2022
  
2023
  
2022
 
Revenues based on customer’s location:
            
United States
 
$
924
  
$
578
  
$
1,801
  
$
798
 
Europe
  
411
   
888
   
735
   
1,535
 
Asia-Pacific
  
1
   
103
   
29
   
111
 
Africa
  
1
   
1
   
2
   
2
 
Total revenues
 
$
1,337
  
$
1,570
  
$
2,567
  
$
2,446
 

  
June 30,
  
December 31,
 
  
2023
  
2022
 
Long-lived assets by geographic region (*):
      
Israel
 
$
644
  
$
757
 
United States
  
615
   
231
 
Germany
  
21
   
44
 
  
$
1,280
  
$
1,032
 
 
(*)    Long-lived assets are comprised of property and equipment, net.
Major customer data as a percentage of total revenues (in thousands):
(*)
Long-lived assets are comprised of property and equipment, net, and operating lease right-of-use assets.
 September 30, December 31,
 2017 2016
Customer A42.6% 33.3%

24


REWALK ROBOTICS LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

  
Six Months Ended June 30,
 
  
2023
  
2022
 
Major customer data as a percentage of total revenues:
      
Customer A
  
27
%
  
20
%
Customer B
  
*
)
  
12
%
*) Less than 10%.

NOTE 10: SUBSEQUENT EVENTS


NOTE 11:- SUBSEQUENT EVENTSOn August 8, 2023, RRI entered into an Agreement and Plan of Merger (the “Agreement”) with AlterG, Atlas Merger Sub, Inc., a wholly owned subsidiary of RRI (“Merger Sub”), and Shareholder Representative Services LLC, solely in its capacity as representative, agent and attorney-in-fact of the securityholders of AlterG, pursuant to which, Merger Sub will merge with and into AlterG, with AlterG continuing as the surviving corporation and a wholly owned subsidiary of RRI (the “Acquisition”).
 
a.Legal claims: class action litigation (see Note 5d)

AsRRI intends to consummate the Acquisition for approximately $19.0 million in cash (subject to customary adjustments for net working capital, indebtedness, cash, and transaction expenses). Following the closing of November 1, 2017, there were three pending class action lawsuits against the Company and certain other defendants alleging claims underAcquisition (the “Closing”), the Securities Act in connection with the Company’s registration statement used in its IPO, including the Consolidated Massachusetts State Court Actions and the Massachusetts Federal Court Action. These actions are further described above in Note 5d.

Consolidated Massachusetts State Court Actions: The court heard oral argument on the Company's’ motionAgreement provides for two potential earnout payments to dismiss on October 16, 2017.
Massachusetts Federal Court Action: The court denied the Company's motionbe made to stay and has set the time for the Company's motion to dismiss to November 10, 2017.

b.Share option plans: Equity Exchange Program (see Note 8a)

On the Equity Exchange Program’s expiration dateAlterG’s stockholders (as of October 4, 2017, 46 holders tendered options to purchase an aggregate of 945,416 ordinary shares, representing 96.4% of all options eligible for exchange, and on October 5, 2017, the Company granted to these holders an aggregate of 251,872 new RSUs. 180,167 of these new RSUs were grantedimmediately prior to the Company’s executive officers and “named executive officers” (as defined in Item 402 of Regulation S-KClosing) based on AlterG’s revenue growth during the two consecutive trailing twelve-month periods following the Closing. Each earnout payment, if any, will equal 65% of the SEC). Unlessrevenue growth (measured in accordance with the Company’s compensation committee accelerates their vesting, the new RSUs vest over a three-year period, with one-third vesting on the first anniversary of the date of grant and one-third vesting on each of the next two successive anniversaries. Additionally, the forfeiture terms of the new RSUs are substantiallyAgreement) during each such trailing twelve-month period.
The Agreement contains customary representations, warranties, indemnities and covenants of RRI and AlterG.
Consummation of the sameAcquisition is subject to various customary conditions, including, among others, (i) approval of the Agreement by the requisite vote of AlterG’s stockholders and (ii) the absence of any order or law issued by certain courts of competent jurisdiction or other governmental entity, in each case prohibiting consummation of the Acquisition, and no action or proceeding by a governmental entity before any court or certain other governmental entities of competent jurisdiction seeking to prohibit consummation of the Acquisition.
The foregoing description of the Agreement is qualified in its entirety by the full text of the Agreement, which is filed as those that apply generallyExhibit 10.1 to previously-granted RSUs granted underthis Quarterly Report on Form 10-Q and is incorporated by reference herein.
Closing of the 2014 Plan.Acquisition is currently expected to occur on August 11, 2023. The Equity Exchange Program is further described above in Note 8a.

The stock options exchanged pursuant tofinal purchase price allocation for the Exchange Program were canceled andAcquisition has not been determined as of the ordinary shares underlying such options became available for issuance under the 2014 Plan.

Tablefiling of Contentsthis Quarterly Report on Form 10-Q.

25


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operation should be read in conjunction with the unaudited condensed consolidated financial statements and the related notes included elsewhere in this quarterly report and with our audited consolidated financial statements included in our 2016 Form 10-K for the year ended December 31, 2022 as filed with the SEC.Securities and Exchange Commission (“SEC”) on February 23, 2023 and amended on May 1, 2023 (the “2022 Form 10-K”). In addition to historical condensed financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. For a discussion of factors that could cause or contribute to these differences, see “Special Note Regarding Forward-Looking Statements” below.above.

Special Note Regarding Forward-Looking StatementsOverview

In addition to historical information, this quarterly report on Form 10-Q (this “quarterly report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, that are based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, potential market opportunities and the effects of competition. Forward-looking statements may include projections regarding our future performance and, in some cases, can be identified by words like “anticipate,” “assume,” “believe,” “could,” “seek,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “future,” “should,” “will,” “would” or similar expressions that convey uncertainty of future events or outcomes and the negatives of those terms. These statements may be found in this section of this quarterly report titled “Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this quarterly report. These statements include, but are not limited to, statements regarding:

our expectations regarding future growth, including our ability to increase sales in our existing geographic markets expand to new markets and achieve our planned expense reductions;

our management’s conclusion in the notes to our unaudited condensed consolidated financial statements included in this report and to our audited consolidated financial statements for fiscal 2016, and our independent registered public accounting firm’s statement in its opinion relating to our audited consolidated financial statements for fiscal 2016, that thereWe are a substantial doubts as to our ability to continue as a going concern;

our ability to maintain and grow our reputation and the market acceptance of our products;

our ability to achieve reimbursement from third-party payors for our products;

our expectations as to our clinical research program and clinical results;

our expectations as to the results of and Food and Drug Administration’s (the "FDA") potential
regulatory developments with respect to our mandatory 522 postmarket surveillance study;

the outcome of ongoing shareholder class action litigation relating to our IPO;

our ability to repay our secured indebtedness;

our ability to improve our products and develop new products;

our ability to maintain adequate protection of our intellectual property and to avoid violation of the intellectual property rights of others;

our ability to gain and maintain regulatory approvals;

our ability to secure capital from equity and debt financings in light of limitations under our Form S-3,
the price range of our ordinary shares and conditions in the financial markets, and that risk that such financings may dilute our shareholders or restrict our business;


our ability to use effectively the proceeds of any offerings of our securities;

the impact of the market price of our ordinary shares on the determination of whether we are a passive foreign investment company;

our ability to maintain relationships with existing customers and develop relationships with new customers.

our ability to comply with the continued listing requirements of the NASDAQ Capital Market and the risk that our ordinary shares will be delisted if we cannot do so; and

our compliance with medical device reporting regulations to report adverse events involving our products and the potential impact of such adverse events on our ability to market and sell its products.

The preceding list is not intended to be an exhaustive list of all of our statements. The statements are based on our beliefs, assumptions and expectations of future performance, taking into account the information currently available to us. These statements are only predictions based upon our current expectations and projections about future events. There are important factors that could cause our actual results, levels of activity, performance or achievements to differ materially from the results, levels of activity, performance or achievements expressed or implied by the forward-looking statements. In particular, you should consider the risks provided under “Part 1, Item 1A. Risk Factors” of our 2016 Form 10-K, and in other reports filed by us with the SEC.
You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur.
Any forward looking statement in this quarterly report speaks only as of the date hereof. Except as required by law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future developments or otherwise.

Overview
We are an innovative medical device company that is designing, developing, and commercializing innovative technologies that enable mobility and wellness in rehabilitation and daily life for individuals with neurological conditions. Our initial product offerings were the SCI Products. These devices are robotic exoskeletons that alloware designed for individuals with mobility impairments or other medical conditions the ability to stand and walk once again. We have developed and are continuing to commercialize ReWalk, an exoskeletonparaplegia that usesuse our patented tilt-sensor technology and an onboard computer and motion sensors to drive motorized legs that power movement.
We currently derive revenue from selling the ReWalk Personal and ReWalk Rehabilitation exoskeleton devices that These SCI Products allow individuals with paraplegiaspinal cord injury the ability to stand and walk once again.again during everyday activities at home or in the community. In March 2023, we received 510(k) clearance from the U.S. Food and Drug Administration (“FDA”) for the ReWalk Personal 6.0 to enable the stairs functionality and add uses on stairs and curbs to the indication for use for the device in the U.S. The clearance permits U.S. customers to participate in more walking activities in their daily lives where stairs or curbs may have previously limited them. This feature has been available in Europe since initial CE Clearance, and real-world data from a cohort of 47 European users throughout a period of over seven years and consisting of over 18,000 stair steps was collected to demonstrate the safety and efficacy of this feature and support the FDA submission.
We have sought to expand our product offerings beyond the SCI Products through internal development and distribution agreements. We have developed our ReStore Exo-Suit device, which we began commercializing in June 2019. The ReStore is currently designeda powered, lightweight soft exo-suit intended for everydayuse during the rehabilitation of individuals with lower limb disabilities due to stroke. During the second quarter of 2020, we finalized and moved to implement two separate agreements to distribute additional product lines in the United States. We are the exclusive distributor of the MYOLYN MyoCycle FES Pro cycles to U.S. rehabilitation clinics and for the MyoCycle Home cycles available to US veterans through the U.S. Department of Veterans Affairs (“VA”) hospitals. In the second quarter of 2020, we also became the exclusive distributor of the MediTouch Tutor movement biofeedback systems in the United States; however, due to unsatisfactory sales performance of the MediTouch product lines, we terminated this agreement as of January 31, 2023. We refer to the MediTouch and MyoCycle devices as our “Distributed Products.” We will continue to evaluate other products for distribution or acquisition that can broaden our product offerings further to help individuals with neurological injury and disability.
We are in the research stage of ReBoot, a personal soft exo-suit for home and community use by individuals atpost-stroke, and we are currently evaluating the reimbursement landscape and the potential clinical impact of this device. This product would be a complementary product to ReStore as it provides active assistance to the ankle during plantar flexion and dorsiflexion for gait and mobility improvement in the home environment, and it received Breakthrough Device Designation from the FDA in their communities, and is custom-fitted for each user. ReWalk Rehabilitation is designed forNovember 2021. Further investment in the development path of the ReBoot has been temporarily paused in 2023 pending further determination about the clinical rehabilitation environment where it provides valuable exercise and therapy. It also enables individuals to evaluate their capacity for using ReWalk Personal incommercial opportunity of this device.
Our principal markets are the future.
Since obtaining CE mark clearance at the end of 2012United States and FDA clearance in June 2014Europe. In Europe, we have continued to increase our focus on selling the Personal device through third party payorsa direct sales operation in the U.S. and Germany and through distributorswork with distribution partners in certain other parts of the world. Additionally, wemajor countries. We have received regulatory approval to sell the ReWalk deiceoffices in other countries. In the future, we intend to seek approvalMarlborough, Massachusetts, Berlin, Germany and Yokneam, Israel, from the applicable regulatory agencies in other jurisdictions where we seek to market ReWalk.operate our business.
We have in the past generated and expect to generate in the future expect to generate revenuesrevenue from a combination of third-party payors self-payors, including(including private and government employers,payors) and institutions.self-pay individuals. While a broad uniform policy of coverage and reimbursement by third-party commercial payors currently does not exist in the United States for electronic exoskeleton technologies such as the ReWalk Personal Exoskeleton, we are pursuing various paths of reimbursement and support fundraising efforts by institutions and clinics. Inclinics, such as the VA policy that was issued in December 2015 the Veterans' Administration (the “VA”) issued a national policy for the evaluation, training, and procurement of ReWalk Personal exoskeleton systems for all qualifying veterans suffering from SCI across the United States. The VA policy
26

We have also been pursuing updates with the Centers for Medicare and Medicaid Services (“CMS”), to clarify the Medicare coverage category (i.e., benefit category) applicable for personal exoskeletons. In 2021, the National Spinal Cord Injury Statistical Center (“NSCISC”) reported the Medicare and Medicaid are the primary payors for approximately 56% of the spinal cord injury population which are at least five years post their injury date. In July 2020, following a successful submission and hearing process, a code was issued for ReWalk Personal Exoskeleton (effective October 1, 2020), which may be used for purposes of claim submission to Medicare, Medicaid, and other payors. We are currently seeking a nationwide Medicare benefit category determination from CMS to designate the relevant Medicare benefit category. CMS has stated that, until a nationwide benefit category determination is issued, coverage and payment can be adjudicated on a case-by-case basis by the first national coverage policyMedicare Administrative contractors (“MACs”).
CMS proposed to include personal exoskeletons in the United StatesMedicare benefit category for qualifying individuals who have suffered spinal cord injury. As of September 30, 2017, we had placed 16 unitsbraces. CMS issued the proposal as part of the VA policy. We also regularly assist in litigation efforts by individuals bringing claims against nationalCalendar Year 2024 Home Health Prospective Payment System Proposed Rule, CMS-1780 (Proposed Rule), released on June 30, 2023. The Proposed Rule would establish a new regulatory definition of “brace” and regional insurers for reimbursement ofinclude exoskeletons like the ReWalk device,Personal Exoskeleton (i.e., exoskeletons described by Healthcare Common Procedure Coding System code K1007) in this definition. Once finalized, the Medicare benefit category for personal exoskeletons would be clear – i.e., the Medicare benefit category for “leg, arm, back, and have receivedneck braces” – and expectpayment would be on a lump sum basis.
In Germany, we continue to receive revenuesmake progress toward achieving coverage from settlements or judgments paidthe various government, private and worker’s compensation payors for our SCI products. In September 2017, each of German insurer BARMER GEK (“BARMER”) and national social accident insurance provider Deutsche Gesetzliche Unfallversicherung (“DGUV”), indicated that they will provide coverage to users who meet certain inclusion and exclusion criteria. In February 2018, the head office of German Statutory Health Insurance (“SHI”) Spitzenverband (“GKV”) confirmed their decision to list the ReWalk Personal Exoskeleton system in the German Medical Device Directory. This decision means that ReWalk is listed among all medical devices for compensation, which SHI providers can procure for any approved beneficiary on a case-by-case basis. During the year 2020 and 2021, we announced several new agreements with German SHIs, including TK and DAK Gesundheit, as well as the first German Private Health Insurer (“PHI”), which outline the process of obtaining our devices for eligible insured users.patients. We are also currently working with several additional SHIs on securing a formal operating contract that will establish the process of obtaining a ReWalk Personal Exoskeleton for their beneficiaries within their system. Additionally, to date, several private insurers in the United States and Europe have providedare providing reimbursement for ReWalk in certain cases,cases.
27

Second Quarter 2023 and in September 2017, each of German insurer BARMER GEK ("Barmer") and national social accident insurance provider Deutsche Gesetzliche Unfallversicherung (“DGUV”), signed a confirmation and letter of agreement, respectively, regarding the provision of ReWalk systems for all qualifying beneficiaries.Subsequent Period Business Highlights

Table of Contents
Total revenue for the second quarter of 2023 was $1.3 million, compared to $1.6 million in the second quarter of 2022;
Total revenue for the six months ended June 30, 2023 was $2.6 million, compared to $2.4 million in the six months ended June 30, 2022;
Gross margin was 43.1% in Q2’23, compared to 47.5% in Q2’22, a 4.4 percentage point decrease;
Operating expenses were $5.7 million in the second quarter of 2023, compared to $5.1 million in the second quarter of 2022, and $10.7 million for the six months ended June 30, 2023, compared to $9.7 million for the six months ended June 30, 2022.

28
We continue to engage with U.S. and European national and regional insurance providers, including European workers’ compensation groups, to secure potential coverage policies based on supportive data and appeal rulings that have deemed exoskeleton devices a “medically necessary” standard of care for individuals with SCI. As part of this ongoing initiative, a large national insurance provider has requested additional information from us in order to continue to evaluate a change from its current non-coverage policy. We are also submitting data to two additional U.S. commercial groups for policy reviews. 
In the future, we intend to pursue reimbursement coverage through the Centers for Medicare and Medicaid Services (“CMS”). While we believe that a positive response from CMS may broaden coverage by private insurers, we cannot currently predict how long it would take for us to receive a decision from CMS. For more information, see “Part I. Item 1A. Risk Factors-Risks Related to Our Business and Our Industry-We may fail to secure or maintain adequate insurance coverage or reimbursement for ReWalk by third-party payors, including the VA, which risk may be heightened if insurers find ReWalk to be investigational or experimental or if new government regulations change existing reimbursement policies. Additionally, such coverage or reimbursement, even if maintained, may not produce revenues that are high enough to allow us to sell our products profitably” in our 2016 Form 10-K.
In early January 2017, we announced our plans to reduce our operating expenses in 2017 by up to 30% as compared to 2016. We have been working toward such reductions through a combination of targeted savings, including by establishing quality improvement initiatives and lowering overall product cost, realigning our staffing priorities and reducing the size of our staff, including our reimbursement personnel, reducing spending on external appeals and lowering other corporate spending. In the near future, we intend to continue focusing on our reimbursement efforts with our streamlined staffing by pursuing insurance claims on a case-by-case basis, managing claims through the review process and external appeals, and investing in efforts to expand coverage.
In June 2017, we unveiled our lightweight “soft suit” exoskeleton prototype, in anticipation of later clinical studies and commercialization of an initial indication designed for strokes, and in October 2017, we announced the start of pre-clinical testing on the Restore “soft suit” system for stroke patients. A prospective clinical trial with the Restore system is targeted to begin in early 2018, and we aim to commercialize the system for use by stroke patients in Europe in late 2018, followed by the United States in late 2018 or early 2019, subject to the timing and receipt of CE mark and FDA clearance, respectively. We have not yet applied for these clearances and intend to apply in mid-2018. Obtaining clearance could involve an extensive and time-consuming process and delay commercialization beyond our planned timetable, and we cannot make any assurances regarding the ultimate timing of FDA or CE mark clearance or commercialization of the products. For more information on the clearance processes, see “Part I, Item 1. Business-Government Regulation” in our 2016 Form 10-K. For more information on the Restore system, see our Current Report on Form 8-K filed with the SEC on October 23, 2017.
We intend to focus our research and development efforts in the near term primarily on the Restore system for stroke patients and in the longer term on “soft suit” exoskeletons for additional indications affecting the ability to walk, including multiple sclerosis, cerebral palsy, Parkinson’s disease and elderly assistance, and the next generation of our current ReWalk device. We anticipate that the next generation of the ReWalk will be a structural exoskeleton similar to our existing ReWalk devices, but with a slimmer profile, lighter body and improved drive mechanism.
We have incurred net losses and negative cash flows from operations since inception. We anticipate that this will continue in the near term as we plan to focus our resources mainly on reimbursement efforts, and efforts to expand coverage for the ReWalk system, clinical studies, including our FDA postmarket study, the development and commercialization efforts for the lightweight “soft suit” exoskeleton to treat stroke patients and development efforts for similar “soft suit” exoskeleton technology for other indications affecting the ability to walk. We are committed to maintaining optionality to ensure that we can operate our business without interruptions, enhance our product portfolio and pursue new markets. As such, from time to time, we have engaged and may in the future engage in strategic transactions designed to enhance shareholder value including, but not limited to, alliances, such as our strategic alliance with Yaskawa Electric Corporation, divestitures, private placements, sales of our assets or business and joint ventures.

Third Quarter 2017 Business Highlights

Revenues grew 24% to $1.7 million and 46% to $6.2 million for the three and nine months ended September 30, 2017, respectively, compared to revenues of $1.4 million and $4.3 million for the three and nine months ended September 30, 2016, respectively.

We placed 16 ReWalk devices during the quarter ended September 30, 2017, of which 10 were placed in the Unites States, 3 were in our direct markets in Europe, and 3 were in other markets.

We secured 7 favorable case by case insurance reimbursement decisions.

We increased pending insurance claims to 218 in the U.S. and Germany, as of September 30, 2017, compared to 149 as of the end of the prior year period.

Barmer confirmed it will provide ReWalk systems to all qualifying beneficiaries. Barmer provides insurance coverage for nearly ten million people in Germany, as a member of the German Statutory Health Insurance network and one of the most significant national insurers in the country. Exoskeletons will be provided to users that meet certain inclusion criteria and assessment by the German Health Insurance Medical Service (Medizinischer Dienst der Krankenversicherungen) before and after training. Barmer has already begun processing claims with users entering training for in-home use of an exoskeleton.

Germany’s national social accident insurance provider, DGUV, signed a confirmation letter with ReWalk, stipulating that the DGUV's member payers, including the health insurance association Berufsgenossenschaft (also known as BG) and state insurers, will approve the supply of exoskeleton systems for qualifying beneficiaries on a case-by-case basis. DGUV is comprised of 35 different insurers, which provide coverage for more than 70 million individuals in Germany. Per the agreement, eligible individuals will go to BG clinics for evaluation as a part of the procurement.

Completed critical design review processes and began the pre-clinical testing of the Restore lightweight soft-exosuit base design in preparation for the clinical study and commercialization of an initial indication designed for stroke patients.

Total operating expenses in the third quarter of 2017 were $6.1 million, compared with $7.7 million in the prior year period. The reduction in operating expenses reflected our initiatives to reduce spending, as announced earlier in 2017.

During the quarter ended September 30, 2017, we sold 1,678,288 shares generating total net proceeds to the Company of $2.9 million (after commissions, fees and expenses) under our ATM Offering Program. For more information, see Note 8e to our unaudited condensed consolidated financial statements set forth in “Part I, Item 1. Financial Statements” above and “Liquidity and Capital Resources” below.


Results of Operations for the Three and NineSix Months Ended SeptemberJune 30, 20172023 and SeptemberJune 30, 20162022
Our operating results for the three and ninesix months ended SeptemberJune 30, 2017,2023, as compared to the same periodsperiod in 2016,2022, are presented below. TheThe results set forth below are not necessarily indicative of the results to be expected in future periods.
  
Three Months Ended
June 30,
  
Six Months Ended
June 30,
 
  
2023
  
2022
  2023  2022 
Revenues
 $
1,337
  $
1,570
  
$
2,567
  
$
2,446
 
Cost of revenues
  
761
   
824
   
1,420
   
1,435
 
                 
Gross profit
  
576
   
746
   
1,147
   
1,011
 
                 
Operating expenses:
                
Research and development, net
  
816
   
956
   
1,568
   
1,863
 
Sales and marketing
  
2,504
   
2,347
   
4,988
   
4,531
 
General and administrative
  
2,414
   
1,819
   
4,124
   
3,281
 
                 
Total operating expenses
  
5,734
   
5,122
   
10,680
   
9,675
 
                 
Operating loss
  
(5,158
)
  
(4,376
)
  
(9,533
)
  
(8,664
)
Financial (expenses) income, net
  
558
   
(44
)
  
636
   
(68
)
                 
Loss before income taxes
  
(4,600
)
  
(4,420
)
  
(8,897
)
  
(8,732
)
Taxes on income
  
42
   
26
   
66
   
64
 
                 
Net loss
 $
(4,642
)
 $
(4,446
)
 
$
(8,963
)
 
$
(8,796
)
                 
Net loss per ordinary share, basic and diluted
 $
(0.08
)
 $
(0.07
)
 
$
(0.15
)
 
$
(0.14
)
                 
Weighted average number of shares used in computing net loss per ordinary share, basic and diluted
  
59,515,410
   
62,544,467
   
59,515,289
   
62,519,063
 
29

 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Revenues$1,732
 $1,400
 $6,238
 $4,278
Cost of revenues1,024
 1,110
 3,740
 3,410
        
Gross profit708
 290
 2,498
 868
        
Operating expenses: 
  
  
  
Research and development, net1,618
 1,968
 4,433
 6,737
Sales and marketing2,637
 3,774
 8,643
 10,577
General and administrative1,805
 1,951
 5,796
 5,960
        
Total operating expenses6,060
 7,693
 18,872
 23,274
        
Operating loss(5,352) (7,403) (16,374) (22,406)
        
Loss on extinguishment of debt
 
 313
 
Financial expenses, net479
 508
 1,843
 1,514
        
Loss before income taxes(5,831) (7,911) (18,530) (23,920)
Income taxes15
 9
 25
 39
Net loss$(5,846) $(7,920) $(18,555) $(23,959)
        
Net loss per ordinary share, basic and diluted$(0.27) $(0.62) $(1.00) $(1.92)
        
Weighted average number of shares used in computing net loss per ordinary share, basic and diluted21,660,757
 12,759,887
 18,463,444
 12,495,433



Three and NineSix Months Ended SeptemberJune 30, 20172023 Compared to Three and NineSix Months Ended SeptemberJune 30, 20162022
Revenues
Revenues
Our revenues for the three and ninesix months ended SeptemberJune 30, 20172023 and 20162022 were as follows:
  
Three Months Ended
June 30,
  
Six Months Ended
June 30,
 
  
2023
  
2022
  
2023
  
2022
 
  
(in thousands, except unit amounts)
  
(in thousands, except unit amounts)
 
Personal unit revenues
 
$
1,007
  
$
1,245
  
$
2,113
  
$
2,015
 
Rehabilitation unit revenues
  
330
   
325
   
454
   
431
 
Revenues
 
$
1,337
  
$
1,570
  
$
2,567
  
$
2,446
 
Personal unit revenues consist of ReWalk Personal 6.0 and Distributed Products sale, rental, service and warranty revenue for home use.
Rehabilitation unit revenues consist of ReStore, Distributed Products and SCI Products sale, rental, service and warranty revenue to clinics, hospitals for treating patients with relevant medical conditions or medical academic centers.
 
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
 (in thousands, except unit amounts) (in thousands, except unit amounts)
Personal units placed15
 20
 81
 75
Rehabilitation units placed1
 3
 3
 5
Total units placed16
 23
 84
 80
Personal unit revenues$1,707
 $1,250
 $6,033
 $3,929
Rehabilitation unit revenues$25
 $150
 $205
 $349
Revenues$1,732
 $1,400
 $6,238
 $4,278
Revenues increaseddecreased by $332$233 thousand, or 24%15%, for the three months ended SeptemberJune 30, 20172023 compared to the three months ended SeptemberJune 30, 2016. 2022, due to a lower number of ReWalk Personal 6.0 units sold in the United States and Europe.
Revenues increased by $2.0 million,$121 thousand, or 46%,5% for the ninesix months ended SeptemberJune 30, 2017 compared to the nine months ended September 30, 2016. The increase in revenue was primarily2023 mainly due to sales mix, including higher sales to the VA for use in an ongoing clinical study, reaching, asvolume of September 30, 2017, 60 units placed as part of the study since its inceptionReWalk Personal 6.0 and MyoCycle devices in the fourth quarter of 2015, and an increase in the conversion of rental units into purchases.United States.
In the future, we expect our growth to be driven by sales of our ReWalk Personal device tothrough expansion of coverage and reimbursement by commercial and government third-party payors, as we continuewell as sales of Distributed Products and the ReStore device to focus our resources on broader commercial coverage policies with third-party payors.rehabilitation clinics and personal users.
Gross Profit
Our gross profit for the three and ninesix months ended SeptemberJune 30, 20172023 and 2016 were2022 was as follows (in thousands):
  
Three Months Ended June 30,
  
Six Months Ended June 30,
 
  
2023
  
2022
  
2023
  
2022
 
Gross profit
 
$
576
  
$
746
  
$
1,147
  
$
1,011
 
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Gross profit$708
 $290
 $2,498
 $868
Gross profit was 41%43% of revenue for the three months ended SeptemberJune 30, 2017,2023 compared to 21% of revenue48% for the three months ended SeptemberJune 30, 2016.2023. Gross profit was 40%45% of revenue for the ninesix months ended SeptemberJune 30, 2017,2023, compared to 20% of revenue41% for the ninesix months ended SeptemberJune 30, 2016.2022. The decrease in gross profit for the three months ended June 30, 2023 was primarily driven by the lower volume of units sold and a decrease in our average selling price due to a change in sales mix. The increase in gross profit for the six months ended June 30, 2023, was mainly driven by a higher volume of units sold and an increase in average selling price due to a change in sales mix primarily during the first quarter of 2023 compared to the first quarter of 2022.
We expect gross profit and gross margin will increase in the conversion of rental units into purchases and lower product costs.
We expect our gross profit to gradually improvefuture as we increase our revenue volumes and lower our unit manufacturing costs through implementation of certain cost reduction projects and economies ofrealize operating efficiencies associated with greater scale which will reduce the cost of revenue as a percentage of revenue. Improvements may be partially offset by potential price increase.the lower margins we currently expect from ReStore and our Distributed Products as well as due to an increase in material costs.
30

Research and Development Expenses, net
Our research and development expenses, net, for the three and ninesix months ended SeptemberJune 30, 20172023 and 20162022 were as follows (in thousands):
  
Three Months Ended
June 30,
  
Six Months Ended
June 30,
 
  
2023
  
2022
  
2023
  
2022
 
Research and development expenses, net
 
$
816
  
$
956
  
$
1,568
  
$
1,863
 
 
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Research and development expenses, net$1,618
 $1,968
 $4,433
 $6,737

Research and development expenses, net, decreased by $350$140 thousand, or 18%15%, for the three months ended SeptemberJune 30, 20172023 compared to the three months ended SeptemberJune 30, 2016. The decrease in expenses is primarily attributable to a grant received from the IIA, which were credited to research and development expenses,2022 and a decrease in personnel costs and personnel-related costs, partially offset by an increase in costs related to development of the Restore device. Additionally, Research and development expenses, net, decreased $2.3 million, or 34%,$295 thousand for the ninesix months ended SeptemberJune 30, 20172023 compared to the ninesix months ended SeptemberJune 30, 2016.2022. The decrease in expenses is primarily attributable to a one-time charge of $1.1 million recorded in 2016 related to the Collaboration Agreementdecreased consulting, subcontractors and License Agreement with Harvard,  grantsother expenses from lower product development activity since we received clearance from the IIA which were credited to researchFDA for the stairs and development expenses, net duringcurbs in the nine months ended September 30, 2016 and a decrease in personnel costs and personnel-related costs.United States.
We intend to focus our research and development expenses mainly on our current products maintenance and improvement as well as in support of the near term primarily onFDA submission for clearance of the Restore system for stroke patients and in the longer term on a “soft suit” exoskeleton for additional indications affecting the ability to walk, including multiple sclerosis, cerebral palsy, Parkinson’s disease and elderly assistance and theReWalk 7 next generation of our current ReWalk device.model.
Sales and Marketing Expenses
Our sales and marketing expenses for the three and ninesix months ended SeptemberJune 30, 20172023 and 20162022 were as follows (in thousands):
  
Three Months Ended
June 30,
  
Six Months Ended
June 30,
 
  
2023
  
2022
  
2023
  
2022
 
Sales and marketing expenses
 
$
2,504
  
$
2,347
  
$
4,988
  
$
4,531
 
 
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Sales and marketing expenses$2,637
 $3,774
 $8,643
 $10,577
Sales and marketing expenses decreased $1.1 million,increased by $157 thousand, or 30%7%, for the three months ended SeptemberJune 30, 20172023 compared to the three months ended SeptemberJune 30, 2016. Sales2022 and marketing expenses decreased $1.9 million,$457 thousand, or 18%,10% for the ninesix months ended SeptemberJune 30, 20172023 compared to the ninesix months ended SeptemberJune 30, 2016.2022. The decrease isincrease was primarily driven by lower personnel and personnel-related costs andhigher consulting expenses as resultrelated to the CMS reimbursement process and other marketing expenses, partially offset by the Employee Retention Credit (ERC) payroll tax refund of our recent cost reduction efforts.$186 thousand we received in the United States.

In the near term our sales and marketing expenses are expected to be driven by our commercialization andefforts to expand the reimbursement efforts for thecoverage of our ReWalk Personal device as we continueand to pursue insurance claims on a case by case basis, manage claims through the review process and external appeals and invest in efforts to expand coverage.support our current commercial product activities.
General and Administrative Expenses
Our general and administrative expenses for the three and ninesix months ended SeptemberJune 30, 20172023 and 20162022 were as follows (in thousands):
  
Three Months Ended
June 30,
  
Six Months Ended
June 30,
 
  
2023
  
2022
  
2023
  
2022
 
General and administrative expenses
 
$
2,414
  
$
1,819
  
$
4,124
  
$
3,281
 
 
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
General and administrative$1,805
 $1,951
 $5,796
 $5,960
General and administrative expenses decreased $146increased by $595 thousand, or 7%33%, for the three months ended SeptemberJune 30, 20172023 compared to the three months ended SeptemberJune 30, 2016. General2022 and administrative expenses decreased $164$843 thousand, or 26% for the ninesix months ended SeptemberJune 30, 20172023 compared to the ninesix months ended September 30, 2016.June, 2022. The decrease inincrease was primarily driven by increased payroll and related expenses is primarily attributableas well as professional services related to lower professional expenses and personnel-related costs.acquisition activity.
Loss on Extinguishment of Debt

Loss on extinguishment of debt of $313 thousand for the nine months ended September 30, 2017 is due to amending of our debt under the Loan Agreement with Kreos, such that $3.0 million in principal is now subject to the Kreos Convertible Note. The entry into the Kreos Convertible Note, which decreased the outstanding principal amount under the Loan Agreement from $17.2 million to $14.2 million, resulted in extinguishment of debt accounting treatment.


Financial Expenses (Income), Net
Our financial expenses (income), net, for the three and ninesix months ended SeptemberJune 30, 20172023 and 20162022 were as follows (in thousands):
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Financial expenses, net$479
 $508
 $1,843
 $1,514
  
Three Months Ended
June 30,
  
Six Months Ended
June 30,
 
  
2023
  
2022
  
2023
  
2022
 
Financial (expenses) income, net
 
$
558
  
$
(44
)
 
$
636
  
$
(68
)

Financial expenses,income, net, decreased $29increased by $602 thousand or 6% for the three months ended SeptemberJune 30, 20172023 compared to the three months ended SeptemberJune 30, 2016. Financial expenses, net, increased $3292022 and $704 thousand or 22% for the ninesix months ended SeptemberJune 30, 20172023 compared to the ninesix months ended SeptemberJune 30, 2016.2022. This increase with respect to the nine-month period is attributable mainlywas primarily due to interest expenses relatedincome received from a change in cash management to our Loan Agreement with Kreos.cash accounts that pay a higher interest rate and exchange rate fluctuations.
Income TaxTaxes
Our income tax for the three and ninesix months ended SeptemberJune 30, 20172023 and 20162022 was as follows (in thousands):
  
Three Months Ended
June 30,
  
Six Months Ended
June 30,
 
  
2023
  
2022
  
2023
  
2022
 
Taxes on income
 
$
42
  
$
26
  
$
66
  
$
64
 
 
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Income tax$15
 $9
 $25
 $39

Income taxes increased $6by $16 thousand, or 62%, for the three months ended SeptemberJune 30, 20172023 compared to the three months ended SeptemberJune 30, 2016. Income taxes decreased $142022 and increased by $2 thousand for the ninesix months ended Septemberin June 30, 20172023 , or 3% compared to the ninesix months ended September 30, 2016.June 2022, was mainly due to deferred taxes and timing differences in our subsidiaries
Critical Accounting Policies and Estimates
Our condensed consolidated financial statements are prepared in accordance with United StatesU.S. GAAP. The preparation of our condensed financial statements requires us to make estimates, judgments and assumptions that can affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates, judgments and assumptions on historical experience and other factors that we believe to be reasonable under the circumstances. Materially different results can occur as circumstances change and additional information becomes known. Besides the estimates identified above that are considered critical, we make many other accounting estimates in preparing our condensed financial statements and related disclosures. See Note 2 to our audited consolidated financial statements included in our 20162022 Form 10-K for a description of the significant accounting policies that we used to prepare our consolidated financial statements.
There have been no material changes to our critical accounting policies or our critical judgments from the information provided in “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies” of our 20162022 Form 10-K,except for the updates provided in Note 3b3 of our unaudited condensed consolidated financial statements set forth in “Part I, Item 1. Financial Statements” of this quarterly report.
Recent Accounting Pronouncements
See Note 3b3 to our unaudited condensed consolidated financial statements set forth in “Part I, Item 1. Financial Statements” of this quarterly report for information regarding new accounting pronouncements.
Table of Contents32


Liquidity and Capital Resources
 
Sources of Liquidity and Outlook

Since inception, we have funded our operations primarily through the sale of certain of our equity securities and convertible notes to investors in private placements, the sale of our ordinary shares in public offerings and the incurrence of bank debt.

As
During the six months ended June 30, 2023, we incurred a consolidated net loss of September 30, 2017, the Company had cash$9.0 million and cash equivalents of $12.9 million. The Company hadhave an accumulated deficit in the total amount of $125 million$222.7 million. Our cash and cash equivalent as of SeptemberJune 30, 20172023, totaled $58.2 million and furtherour negative operating cash flow for the six months ended June 30, 2023, was $8.7 million. We have sufficient funds to support our operations for more than 12 months following the issuance date of our condensed consolidated unaudited financial statements for the six months ended June 30, 2023.
We expect to incur future net losses are anticipated in the development of its business. Those factors raise substantial doubt about the Company’s abilityand our transition to continue as a going concern. The ability to continue as a going concernprofitability is dependent upon, among other things, the Company obtainingsuccessful development and commercialization of our products and product candidates, the necessary financingestablishment of contracts for the distribution of new product lines, or the acquisition of additional product lines, any of which, or in combination, would contribute to meet its obligations and repay its liabilities arisingthe achievement of a level of revenues adequate to support our cost structure. Until we achieve profitability or generate positive cash flows, we will continue to need to raise additional cash from normal businesstime to time.
We intend to fund future operations when they become due.

The Company intends to finance operating costs over the next twelve months with existingthrough cash on hand, reductions in operating spend, issuances under the Company's ATM Offering Program additional private and/or other future issuancespublic offerings of debt or equity and debt securities, cash exercises of outstanding warrants or through a combination of the foregoing. However, the Company will need toIn addition, we may seek additional capital through arrangements with strategic partners or from other sources of financing ifand we require more funds than anticipated during the next 12 months or in later periods. For more information, see “Part II, Item 1A. Risk Factors-We may not have sufficient fundswill continue to meet certain future capital requirements or growaddress our business, and may need to take advantage of various forms of capital-raising transactions. Future equity or debt financings or strategic transactions may dilute our shareholders, disrupt our business or place us under restrictive covenants, while limitations under our registration statement on Form S-3 may make it more difficult for uscost structure. Notwithstanding, there can be no assurance that we will be able to raise money in the public markets.”additional funds or achieve or sustain profitability or positive cash flows from operations.

The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and liabilities and commitments in the normal course of business. The condensed consolidated financial statements for the three and nine months ended September 30, 2017 do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from uncertainty related to the Company’s ability to continue as a going concern.

Our anticipated primary uses of cash are (i) sales, marketing and reimbursement expenses related to market development activities of our ReStore and Personal 6.0 devices, broadening third-party payor and CMS coverage for our ReWalk Personal device and commercializing our new product lines added through distribution agreements; (ii) researchdevelopment of future generation designs for our spinal cord injury device and development costs related to developingof our lightweight “soft suit” exoskeletonexo-suit technology for various lower limb disabilities,potential home personal health utilization for multiple indications; (iii) routine product updates; (iv) potential acquisitions of business, such as our pending Acquisition of AlterG, for a purchase price of approximately $19.0 million in cash at Closing (subject to customary adjustments for net working capital, indebtedness, cash, and transaction expenses), in addition to two potential earnout payments based on AlterG’s revenue growth during the two consecutive trailing twelve-month periods following Closing (see Note 10 to our unaudited condensed consolidated financial statements set forth in “Part I, Item 1. Financial Statements”); and (v) general corporate purposes, including stroke and other indications affecting the ability to walk.working capital needs. Our future cash requirements will depend on many factors, including our rate of revenue growth, the expansion of our sales and marketing activities, the timing and extent of our spending on research and development efforts, our sales and marketing activitiesthe attractiveness of potential acquisition candidates, and international expansion. In order to meetIf our current estimates of revenue, expenses or capital or liquidity requirements change or are inaccurate, we may seek to sell additional equity or debt securities, arrange for additional bank debt financing, or refinance our indebtedness, sell or license our assets, or pursue strategic transactions, such as the sale of our business or all or substantially all of our assets.indebtedness. There can be no assurance that we will be able to raise such funds at all or on acceptable terms. For more information, see “Part I, Item 1A. Risk Factors-We have concluded that there are substantial doubts as to our ability to continue as a going concern.” in our 2016 Form 10-K and “We may not have sufficient funds to meet certain future capital requirements or grow our business, and may need to take advantage
Equity Raises
Use of various forms of capital-raising transactions. Future equity or debt financings may dilute our shareholders, disrupt our business or place us under restrictive covenants, while limitations under our Form S-3 may make it more difficult for us to raise money in the public markets” in “Part II, Item 1. Risk Factors” of this quarterly report.

Loan Agreement with Kreos and Related Warrant to Purchase Ordinary Shares

On December 30, 2015, we entered into the Loan Agreement with Kreos pursuant to which Kreos extended a line of credit to us in the amount of $20.0 million. On January 4, 2016, we drew down $12.0 million under the Loan Agreement. Under the terms of the Loan Agreement we were entitled to draw down up to an additional $8.0 million until December 31, 2016, if we raised $10.0 million or more in the issuance of shares of our capital stock (including debt convertible into shares of our capital stock) by December 31, 2016. On December 28, 2016, we drew down the remaining $8.0 million available under the Loan Agreement. Interest is payable monthly in arrears on any amounts drawn down at a rate of 10.75% per year from the applicable drawdown date through the date on which all principal is repaid. As of June 30, 2017, the Company raised more than $20 million in connectionBeginning with the issuancefiling of its share capital and therefore, in accordance with the terms of the Loan Agreement, the repayment period was extended from 24 months to 36 months. The principal was also reduced in connection with the issuance of the Kreos Convertible Note on June 9, 2017. Pursuant to the Loan Agreement, we paid Kreos a transaction fee equal to 1.0% of the total available amount of the line of credit upon the execution of the agreement and we will be required to pay Kreos an end of loan payment equal to 1.0% of the amount of each tranche drawn down upon the expiration of each such tranche. During the nine months ended September 30, 2017 the Company paid $23 thousand of fees in connection with the Loan Agreement, compared to $501 thousand during the fiscal year ended December 31, 2016. Pursuant to the Loan Agreement, we granted Kreos a first priority security interest over all of our assets, including intellectual property and equity interests in its subsidiaries, subject to certain permitted security interests.

In connection with the $12.0 million drawdown under the Loan Agreement, we issued to Kreos the warrant to purchase up to 119,295 of our ordinary shares at an exercise price of $9.64 per share, which represented the average of the closing prices of our ordinary shares for the 30-day calendar period prior to the date of the issuance of the warrant, subject to adjustment as set forth in the warrant. In connection with the $8.0 million drawdown under the Loan Agreement on December 28, 2016, we increased the amount of the warrant from $1.15 million to $1.61 million, or by $460 thousand, such that the warrant represents the right to purchase up to 167,012 of our ordinary shares. The increase was based on the terms of the warrant, which provide that the amount of the warrant will be increased by 5.75% of any additional drawdowns. Subject to the terms of the warrant, the warrant is exercisable, in whole or in part, at any time prior to the earlier of (i) December 30, 2025, or (ii) immediately prior to the consummation of a merger, consolidation, or reorganization of us with or into, or the sale or license of all or substantially all our assets or shares to, any other entity or person, other than a wholly- owned subsidiary of us, excluding any transaction in which our shareholders prior to the transaction will hold more than 50% of the voting and economic rights of the surviving entity after the transaction.

On June 9, 2017, the Company and Kreos entered into the First Amendment. As of that date the outstanding principal amount under the Loan Agreement was $17.2 million, Under the First Amendment, $3.0 million of the outstanding principal under the Loan Agreement is subject to repayment pursuant to the senior secured Kreos Convertible Note issued on June 9, 2017, thus reducing the outstanding principal amount under the Loan Agreement to $14.2 million as of June 9, 2017. This amended outstanding principal amount remains subject to repayment in accordance with the terms and conditions of the Loan Agreement and an amended repayment schedule. Interest on the Kreos Convertible Note is payable monthly in arrears at a rate of 10.75% per year.

Kreos may convert the then-outstanding principal and “end of loan payments” under the Kreos Convertible Note, in whole or in part, on one or more occasions, into up to 2,523,660 ordinary shares, at a conversion price per share equal to $1.268 per share (subject to customary anti-dilution adjustments) at any time until the earlier of (i) the maturity date of June 9, 2020 or (ii) a “Change of Control,” as defined in the Loan Agreement. For more information, see Note 6 to our condensed consolidated financial statements included in “Part I, Item 1” of this quarterly report.

Equity Raises

Our initial public offering in September 2014 generated $36.3 million in net proceeds. Additionally, on May 9, 2016, the SEC declared effective our Form S-3, pursuant to which we registered up to $100 million of ordinary shares, warrants and/or debt securities and up to 4,388,143 ordinary shares offered by selling shareholders named therein. On May 10, 2016, we entered into our Equity Distribution Agreement with Piper Jaffray, pursuant to which we may offer and sell, from time to time, ordinary shares having an aggregate offering price of up to $25.0 million through Piper Jaffray acting as our agent. The ordinary shares issued under the Equity Distribution Agreement may be registered under the Securities Act using our Form S-3. Additionally, on November 1, 2016, we closed our follow-on public offering of 3,250,000 units, each consisting of one ordinary share and 0.75 of a warrant to purchase one ordinary share. The ordinary shares and the warrants underlying the units and the ordinary shares issuable upon exercise of the warrants are registered under the Securities Act on our Form S-3.

Since we filed our 2016 Form 10-K on February 17, 2017, we have beenwere subject to limitations under the applicable rules of Form S-3, which constrainconstrained our ability to secure capital pursuantwith respect to our ATM Offering Program or other public offerings pursuant to our effective Form S-3. These rules limit the size of primary securities offerings conducted by issuers with an aggregate market value of common stock held by nonaffiliated persons and entities (known as our “public float”)a public float of less than $75 million to no more than one-third of their public float in any 12-month period. AsAt the time of filing our 2022 Form 10-K, on February 17, 2017,23, 2023, we were subject to these limitations, because our public float was approximately $41.2did not reach at least $75 million restrictingin the size60 days preceding the filing of primary offerings under our 2022 Form S-3 to approximately $13.7 million for the following 12 months, unless and until we are no longer subject to these limitations.10-K. We will ceasecontinue to be subject to these limitations oncefor the remainder of the 2023 fiscal year and until the earlier of such time as our public float exceedsreaches at least $75 million in which case we would reassess the application of these rules in 2018,or when we file our next annual report for the year ended December 31, 2023, at which time we will be required to re-test our status under these rules. If our public float is below $75 million as of the filing of our next annual report on Form 10-K, foror at the fiscal year ending December 31, 2017. Additionally,time we file a new Form S-3, we will continue to be subject to these limitations, until the date that our public float again reaches $75 million. These limitations do not apply to secondary offerings for the resale of our ordinary shares or other securities by selling shareholders or to the issuance of ordinary shares upon conversion by holders of convertible securities, such as warrants. Taking into accountWe have registered up to $100 million of ordinary shares issuedwarrants and/or debt securities and settled undercertain other outstanding securities with registration rights on our ATM since February 17, 2017, as of September 30, 2017, our remaining capacity for primary offerings under our Form S-3 during the 12 months after February 17, 2017 was $4.3 million, assuming we remain subject to such limitations throughout that 12-month period.

To raise additional capital in securities offerings above that limitation, we may be required to seek other methods of completing primary offerings, including, for example, under a registration statement on Form S-1 (which has no such size limitations),S-3, which was declared effective by the preparation of which would be more time-consuming and costly, including dueSEC in May 2022.
33

Share Repurchase Program
In June 2022, we announced that our Board had approved a program to potential SEC review. We may also conduct such offerings in the form of private placements, potentially with registration rights or priced at a discountrepurchase up to the market value$8.0 million of our ordinary shares, which could require shareholderpar value NIS 0.25 per share, subject to receipt of Israeli court approval. In July 2022, we announced that we had received approval underfrom an Israeli court for the rulesshare repurchase program, valid through January 20, 2023.
On December 19, 2022, our board of directors approved the NASDAQ. Anyextension of our on-going share repurchase program, with such transactions could resultextension to be in substantial dilutionthe aggregate amount of shareholders’ interests.up to $5.8 million. The extension was approved by an Israeli court on February 9, 2023 for a six-month period expiring on August 9, 2023.

ATM Offering Program

On May 10, 2016, we entered into our Equity Distribution Agreement with Piper Jaffray, pursuant to which we may offer and sell,Under the program, share repurchases were made from time to time ordinary shares having an aggregate offeringusing a variety of methods, in accordance with all applicable securities laws and regulations, including restrictions relating to volume, price of up to $25.0 million through Piper Jaffray acting as our agent. Subject to the terms and conditions of the Equity Distribution Agreement, Piper Jaffray will use its commercially reasonable efforts to sell on our behalf all of the ordinary shares requested to be sold by us, consistent with its normal trading and sales practices. Piper Jaffray may also act as principal in the sale of ordinary sharestiming under applicable law, including Rule 10b-18 under the Equity Distribution Agreement. Such sales may be made under our Form S-3 in what may be deemed “at-the-market” equity offeringsUnited States Securities Exchange Act of 1934, as defined in Rule 415 promulgated under the Securities Act, directly on or through the NASDAQ Capital Market, to or through a market maker other than on an exchange or otherwise, in negotiated transactions at market prices prevailing at the timeamended (the “Exchange Act”).
As of sale or at prices related to such prevailing market prices, and/or any other method permitted by law, including in privately negotiated transactions. Taking into account ordinary shares issued and settled under our ATM since February 17, 2017, as of SeptemberJune 30, 2017, our remaining capacity for primary offerings under our Form S-3 during the 12 months after February 17, 2017 was $4.32023, we had repurchased approximately 4.0 million assuming we remain subject to such limitations throughout that 12-month period.

Piper Jaffray is entitled to compensation at a fixed commission rate of 3.0% of the gross sales price per share sold through it as agent under the Equity Distribution Agreement. Where Piper Jaffray acts as principal in the sale of ordinary shares under the Equity Distribution Agreement, such rate of compensation will not apply, but in no event will the total compensation of Piper Jaffray, when combined with the reimbursement of Piper Jaffray for the out-of-pocket fees and disbursements of its legal counsel, exceed 8.0% of the gross proceeds received from the sale of the ordinary shares.

We may instruct Piper Jaffray not to sell ordinary shares if the sales cannot be effected at or above the price designated by us in any instruction. We or Piper Jaffray may suspend an offering of ordinary shares under the ATM Offering Program upon proper notice and subject to other conditions, as further described in the Equity Distribution Agreement. Additionally, the ATM Offering Program will terminate on the earlier of (i) the sale of all ordinary shares subject to the Equity Distribution Agreement or (ii) the termination of the Equity Distribution Agreement. The Equity Distribution Agreement may be terminated by Piper Jaffray or us at any time on the close of business on the date of receipt of written notice, and by Piper Jaffray at any time in certain circumstances, including any suspension or limitation on the trading of our ordinary shares on the NASDAQ Capital Market, as further described in the Equity Distribution Agreement. During the nine months ended September 30, 2017, the Company issued and sold 5,379,908 ordinary shares atfor an averageaggregate purchase price of $1.76 per share under its ATM Offering Program (as defined in Note 8e below). The gross proceeds to the Company were $9,448 thousand, and the net aggregate proceeds after deducting commissions, fees and offering expenses in the amount of $439 thousand were $9.0 million. As a result, from the inception of the ATM Offering Program in May 2016 until September 30, 2017, we had sold 6,071,970 ordinary sharesapproximately $3.5 million under the ATM Offering Program for net proceeds to us of $13.1 million (after commissions, fees and expenses). Additionally,repurchase program. The repurchase program, as of that date, we had paid Piper Jaffray compensation of $420 thousand and had incurred total expenses of approximately $907 thousand in connection with the ATM Offering Program. We intend to continue using this program opportunistically to raise additional funds.

Follow-on Offering of Units

On November 1, 2016, we closed our follow-on public offering of 3,250,000 units, each consisting of one ordinary share and 0.75 of a warrant to purchase one ordinary share. The units were not issued or certificated, and the ordinary shares and warrants underlying the units were immediately separable and issued separately. The warrants are not listedextended, expired on the NASDAQ Capital Market, any other national securities exchange or any other nationally recognized trading system. The ordinary shares and the warrants underlying the units and the ordinary shares issuable upon exercise of the warrants are registered under the Securities Act on our Form S-3. Our estimated net aggregate proceeds, after deducting underwriting discounts and commissions and estimated expenses, were $11.1 million. We also granted Oppenheimer, as underwriter under the underwriting agreement, an option to purchase up to 487,500 additional units at the public offering price, less the underwriting discount, for 30 days after October 27, 2016, which Oppenheimer did not exercise.

The warrants became exercisable during the period commencing from the date of original issuance and ending on November 1, 2021, the expiration date of the warrants, at an initial exercise price of $4.75 per ordinary share. The exercise price and the numberAugust 9, 2023. No repurchases of ordinary shares into which the warrants may be exercised are subjectwere made by us subsequent to adjustment upon certain corporate events, including stock splits, reverse stock splits, combinations, stock dividends, recapitalizations, reorganizations and certain other events. Our board of directors may also determine to make such adjustments to the exercise price and number of ordinary shares to be issued upon exercise based on similar events, including the granting of stock appreciation rights, phantom stock rights or other rights with equity features. At any time, the board of directors may reduce the exercise price of the warrants to any amount and for any period of time it deems appropriate. As of SeptemberJune 30, 2017, none of the warrants issued in the follow-on offering had been exercised.2023.

Cash Flows for the NineSix Months Ended SeptemberJune 30, 20172023 and SeptemberJune 30, 20162022 (in thousands):
  
Six Months Ended
June 30,
 
  
2023
  
2022
 
Net cash used in operating activities
 
$
(8,739
)
 
$
(9,377
)
Net cash used in investing activities
  
   
(18
)
Net cash provided by financing activities
  
(986
)
  
 
Effect of Exchange rate changes on Cash, Cash Equivalents and Restricted Cash
  
5
   
(164
)
Net cash flow
 
$
(9,720
)
 
$
(9,559
)
 Nine Months Ended September 30,
 2017 2016
Net cash used in operating activities$(17,072) $(20,200)
Net cash used in investing activities(19) (408)
Net cash provided by financing activities6,341
 15,138
Net cash flow$(10,750) $(5,470)
Net Cash Used in Operating Activities
Net cash used in operating activities decreased by $496 million or 5% primarily due to $17.1 million for the nine months ended September 30, 2017 compared to $20.2 million for the nine months ended September 30, 2016 primarily as a result of increased revenue, lower operatingdecreased insurance prepaid expenses as result of recent cost reduction efforts, and a decrease in expenses related to Collaboration Agreement and the License Agreement, as discussed above.decreased inventory purchases partially offset by acquisition costs.
Net Cash Used in Investing Activities
Net cash used in investing activities decreased to $19 thousand for the nine months ended September 30, 2017 compared to $408 thousand for the nine months ended September 30, 2016 primarily as a result of decreased use of cash for the purchase of property and equipment.
Net Cash Provided by Financing Activities
Net cash provided byused in financing activities was $6.3 million$986 for the ninesix months ended SeptemberJune 30, 2017,2023 compared to $15.1 million in$0 for the ninethree months ended SeptemberJune 30, 2016.2022. The decreaseincrease is related primarilydue to the receiptrepurchase of proceedsour ordinary shares under our Loan Agreement in the nine months period ended September 30, 2016,repurchase program, which were higher than the proceeds we received from issuance of ordinary shares in the ATM Offering Program in the nine months period ended September 30, 2017.expired on August 9, 2023.
Table of Contents34


Obligations and CommercialContractual Commitments
Set forth below is a summary of our contractual obligations as of SeptemberJune 30, 2017.2023.
  
Payments due by period (in dollars, in thousands)
 
Contractual obligations
 
Total
  
Less than
1 year
  
1-3 years
 
          
Purchase obligations (1)
 
$
1,748
  
$
1,748
  
$
 
Collaboration Agreement and License Agreement obligations (2)
  
60
   
60
   
 
Operating lease obligations (3)
  
1,286
   
654
   
632
 
Total
 
$
3,094
  
$
2,462
  
$
632
 
(1)
We depend on one contract manufacturer, Sanmina Corporation, for both the ReStore products and the SCI Products. We place our manufacturing orders with Sanmina pursuant to purchase orders or by providing forecasts for future requirements.
(2)
Under the Collaboration Agreement, we were required to pay in quarterly installments the funding of our joint research collaboration with Harvard, subject to a minimum funding commitment under applicable circumstances. Our License Agreement with Harvard consists of patent reimbursement expenses payments and a license upfront fee payment. There are also several milestone payments contingent upon the achievement of certain product development and commercialization milestones and royalty payments on net sales from certain patents licensed to Harvard. All product development milestones contemplated by the License Agreement have been met as of June 30, 2023; however, there are still outstanding commercialization milestones under the License Agreement that depend on us reaching certain sales amounts, some or all of which may not occur. Our Collaboration Agreement with Harvard was concluded on March 31, 2022.
(3)
Our operating leases consist of leases for our facilities in the United States and Israel and motor vehicles.
 Payments due by period (in dollars, in thousands)
Contractual obligationsTotal Less than 1 year1-3 years3-5 yearsMore than 5 years
Purchase obligations (1)$806
 $806
 $
 $
 $
Collaboration Agreement and License Agreement obligations (2)4,238
 1,350
 2,100
 788
 
Operating lease obligations (3)4,251
 636
 1,173
 1,190
 1,252
Long-term debt obligations (4)19,288
 5,663
 13,625
 
 
Total$28,583
 $8,455
 $16,898
 $1,978
 $1,252

(1)    The Company depends on one contract manufacturer, Sanmina. We place our manufacturing orders with Sanmina pursuant to purchase orders or by providing forecasts for future requirements.
(2)    Our Research Collaboration Agreement is for a period of five years and requires us to pay in quarterly installments for the funding of our joint research collaboration with Harvard, subject to a minimum funding commitment under applicable circumstances. Our License Agreement consists of patent reimbursement expenses payments and of license upfront fee payment. There are also several milestone payments contingent upon the achievement of certain product development and commercialization milestones and royalty payments on net sales from certain patents licensed to Harvard. These product development and commercialization milestones depend on favorable clinical developments, sales and regulatory actions, some or all of which may not occur. Since the achievement and timing of these milestones is neither determinable nor reasonably estimable, these milestone payments are not included in this “Contractual Obligations” table or recorded on our consolidated condensed balance sheet as of September 30, 2017. Moreover, since such royalties are dependent on future product sales which are neither determinable nor reasonably estimable, these royalty payments are not included in this “Contractual Obligations” table or recorded on our condensed consolidated balance sheet as of September 30, 2017. For more information, see Note 7 to our condensed consolidated financial statements included in “Part I, Item 1” of this quarterly report.
(3)    Our operating leases consist of leases for our facilities and motor vehicles. For more information, see “-Liquidity and Capital Resources -Loan Agreement with Kreos and Related Warrant to Purchase Ordinary Shares” above.
(4)    Our long-term debt obligations consist of payments of principal and interest under our Loan Agreement with Kreos.
We calculated the payments due under our operating lease obligation for our Israeli office that are to be paid in NIS at a rate of exchange of NIS 3.526:$1.00,3.7: $1.00, and the payments due under our operating lease obligation for our German subsidiary that are to be paid in euros at a rate of exchange of 1.1819 euro:$1:00,€1.00: $1.09, both of which were the applicable exchange rates as of SeptemberJune 30, 2017. We calculated the payments due under our Loan Agreement with Kreos according to the current schedule of repayment of principal and interest.2023.
Off-Balance Sheet Arrangements
We had no off-balance sheet arrangements or guarantees of third-party obligations as of SeptemberJune 30, 2017. 2023.
 
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes to our market risk during the thirdsecond quarter of 2017.2023. For a discussion of our exposure to market risk, please see “PartPart II, Item 7A, Quantitative“Quantitative and Qualitative Disclosures About Market Risk” of our 20162022 Form 10-K.

ITEM 4.CONTROLS AND PROCEDURES
 
Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and ChiefPrincipal Financial Officer, as appropriate, to allow timely decisions regarding required financial disclosure.


35

As of the end of the period covered by this quarterly report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and ChiefPrincipal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon, and as of the date of, this evaluation, the Chief Executive Officer and the ChiefPrincipal Financial Officer concluded that our disclosure controls and procedures were effective such that the information required to be disclosed by us in our SEC reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to our management, including our Chief Executive Officer and ChiefPrincipal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

During the thirdquarter of 2017ended June 30, 2023 there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

Table of Contents

PART II - OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS
 
There have been no material changes to our legal proceedings as described in “Part I, Item 3. Legal Proceedings” of our 20162022 Form 10-K, except as described in Note 5 and 11 in our condensed consolidated financial statements included in “Part I, Item 1” of this quarterly report.

ITEM 1A.RISK FACTORS

There
Except as set forth below, and as disclosed in our Quarterly Report on Form 10-Q for the three months ended March 31, 2023, there have been no material changes to our risk factors from those disclosed in “Part I, Item 1A. Risk Factors” of our 20162022 Form 10-K except as noted below:10-K:

We may not have sufficient fundsRisks Related to meet certain future capital requirements or grow our business,Our Business and may need to take advantage of various forms of capital-raising transactions. Future equity or debt financings or strategic transactions may dilute our shareholders, disrupt our business or place us under restrictive covenants, while limitations under our registration statement on Form S-3 may make it more difficult for us to raise money in the public markets.Our Industry
As of September 30, 2017, we had an accumulated deficit in the total amount of $125 million,
The announcement and further losses are anticipated in the developmentpendency of our business. Those factors raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern depends upon our obtaining the necessary financing to meet our obligations and timely repay our liabilities arising from normal business operations.
We intend to finance operating costs over the next 12 months with existing cash on hand, issuancesacquisition of equity and/or debt securities, including issuances under our ATM Offering Program, or through a combination of the foregoing. However, we will need to seek additional sources of financing to the extent that we require more funds than anticipated during the next 12 months or in later periods, including if we cannot make our loan repayments under our Loan Agreement with Kreos or if we cannot raise sufficient funds from equity issuances, such as the ATM Offering Program. Due to limitations under the rules of Form S-3, whichAlterG may have applied to us since we filed our 2016 Form 10-K, and taking into account ordinary shares issued and settled under our ATM Offering Program, as of September 30, 2017, we could only issue up to $4.3 million in primary offerings under our effective Form S-3, including our ATM Offering Program, during the 12 months following February 17, 2017, until and unless we cease to be subject to these limitations. For more information on these limitations, see “Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources-Equity Raises.” This limitation makes it more difficult for us to raise money in the public markets.
To raise additional capital in the public markets, including taking into account the limitation above, we may be required to seek other more costly or time-consuming methods, such as registration statements on Form S-1. We may also conduct fundraising transactions in the form of private placements, potentially with registration rights or priced at a discount to the market value of our ordinary shares, which could require shareholder approval under the rules of The NASDAQ Stock Market LLC (“NASDAQ”), or other equity raise transactions. In addition to increased capital costs, any such transactions could result in substantial dilution of our shareholders’ interests, transfer control to a new investor and diminish the value of an investment in our ordinary shares. We may also need to pursue strategic transactions, such as joint ventures, in-licensing transactions or the sale of our business or all or substantially all of our assets. These private financings and strategic transactions could require significant management attention, disrupt our business, adversely affect our financial results, be unsuccessful or fail to achieve the desired results. We are in discussions routinely with such possible sources of additional funding, including during the pendency of sales under our ATM Offering Program. We have not entered into any agreement or understanding regarding any such transaction.
As another alternative, we may in the future choose to refinance up to a substantial portion of our remaining indebtedness under the Loan Agreement, including by tying our repayment obligations and amortization schedule to the achievement of certain business milestones, which we have considered with Kreos from time to time. Agreements governing any borrowing arrangement may contain covenants that could restrict our operations. In sum, if we are unable to obtain additional funds on reasonable terms, it could impair our efforts to develop and commercialize existing and new products and to repay our liabilities as they become due, materially harming our results of operations and financial condition.

If we are unable to leverage and expand our sales, marketing, training and reimbursement infrastructure, including in light of our announced plan to reduce corporate spending, we may fail to increase our revenues.
A key element of our long-term business strategy is the continued enhancement of our sales, marketing, training and reimbursement infrastructure, through the training, retaining and motivating of skilled sales and marketing representatives and reimbursement personnel with industry experience and knowledge. Our ability to derive revenue from sales of our products depends largely on our ability to market the products and obtain reimbursements for them. In order to continue growing our business efficiently, we must therefore coordinate the development of our sales, marketing, training and reimbursement infrastructure with the timing of regulatory approvals, decisions regarding reimbursements and other factors in various geographies. Managing and maintaining this infrastructure is expensive and time-consuming, and an inability to leverage such an organization effectively, or in coordination with regulatory or other developments, could inhibit potential sales and the penetration and adoption of ReWalk into both existing and new markets. In addition, as previously announced, we have set a goal to reduce total operating expenses in 2017 by up to 30% as compared to 2016, in part through a realignment of and reduction in staffing to match our 2017 business goals. As we move forward with these plans, we intend to continue funding field sales, service and training efforts for our ReWalk products. However, certain decisions we make regarding staffing in these areas in our efforts to decrease expenses could have unintended negative effects on our revenues, such as by weakening our sales infrastructure, impairing our reimbursement efforts and/or harming the quality of our customer service. For instance, the number of our staff focused on reimbursement has decreased, and we recently consolidated the functions of two employees that previously focused on reimbursement into the roles of certain executive officers and employees in other departments. Additionally, our Chief Commercial Officer recently passed away.
We also expect to face significant challenges as we manage and continue to improve our sales and marketing infrastructure and work to retain the individuals who make up those networks. Newly hired sales representatives require training and take time to achieve full productivity. If we fail to train new hires adequately, or if we experience high turnover in our sales force in the future, we cannot be certain that new hires will become as productive as may be necessary to maintain or increase our sales. In addition, if we are not able to retain, subject to our plans to cut operating expenses, and continue to recruit our network of internal trainers, we may not be able to successfully train customers on the use of ReWalk, which could inhibit new sales and harm our reputation. If we are unable to expand our sales, marketing and training capabilities, we may not be able to effectively commercialize ReWalk, or enhance the strength of our brand, which could have a material adverse effect on our business, financial condition, operating results.results and cash flows.
We are
On August 8, 2023, we entered into a definitive agreement to acquire AlterG. The Acquisition is expected to close on August 11, 2023, subject to securities class action lawsuits against uscustomary closing conditions. We have devoted, and will continue to devote, significant management and other internal resources towards the completion of the Acquisition and planning for integration. Completion of the Acquisition is subject to conditions beyond our control that may result in an adverse outcome.
Between September 2016 and January 2017, eight putative class actions on behalf of alleged shareholders that purchased or acquired our ordinary shares pursuant and/or traceable to our registration statement on Form F-1 (File No. 333-197344) used in connection with our IPO, were commenced in the following courts: (i) the Superior Court of the State of California, County of San Mateo; (ii) the Superior Court of the Commonwealth of Massachusetts, Suffolk County; (iii) the United States District Court for the Northern District of California; and (iv) the United States District Court for the District of Massachusetts. The actions involve claims under various sections of the Securities Act against us, certain of our current and former directors and officers, the underwriters of our IPO and certain other defendants. The four actions commenced in the Superior Court of the State of California, County of San Mateo have been dismissed for lack of personal jurisdiction, and the action commenced in the United States District Court for the Northern District of California has been voluntarily dismissed. As of November 1, 2017, three actions remain pending, including (i) the two actions commenced in the Superior Court of the Commonwealth of Massachusetts, which have been consolidated, and (ii) the action commenced in the United States District Court for the District of Massachusetts, or Massachusetts Federal Court, which was brought in part by certain of the plaintiffs whose actions were dismissed in the Superior Court of the State of California, County of San Mateo (referred to in this quarterly report as the “Massachusetts Federal Court Action”). The parties in the consolidated Massachusetts State Court Actions have completed briefing on the Company’s motion to dismiss. The plaintiffs in the Massachusetts Federal Court Action filed a consolidated amended complaint in August 2017 adding claims that certain statements we made after our IPO were materially misleading. The court denied the Company’s motion to stay the Massachusetts Federal Court Action, and the Company intends to move to dismiss the action. For more information, see Notes 5d and 11 to our unaudited condensed consolidated financial statements included in “Part I, Item 1” of this quarterly report.
We are generally required, to the extent permitted by Israeli law, to indemnify our current and former directors and officers who are named as defendants in these types of lawsuits. We also have certain contractual indemnification obligations to the underwriters of our IPO regarding the securities class action lawsuits. While a certain amount of insurance coverage is available for expenses or losses associated with these lawsuits, this coverage may not be sufficient. Based on information currently available, we are unable to reasonably estimate a possible loss or range of possible losses, if any, with regard to these lawsuits; therefore, no litigation reserve has been recorded in our consolidated balance sheets. Although we plan to defend against these lawsuits vigorously, there can be no assurance that a favorable final outcome will be obtained. These lawsuits or future litigation may require significant attention from management and could result in significant legal expenses, settlement costs or damage awards that could have a materially adverse impact on our financial position, results of operations and cash flows.

We have initiated a mandatory postmarket surveillance study on our ReWalk Personal 6.0 with a revised FDA-approved protocol, addressing certain violations and deficiencies cited by the FDA that had previously led the FDA to warn us of potential regulatory action. Going forward, if we cannot meet certain FDA requirements for the studyprevent, delay or otherwise satisfy FDA requests promptly, or if our study produces unfavorable results, we could receive additional FDA warnings, which could materially and adversely affect our labeling or marketing efforts.

We are currently conducting an ongoing mandatory FDA postmarket surveillance study on our ReWalk Personal 6.0, which beganits completion in June 2016. Before we began the current study, the FDA sent us a letter on September 30, 2015 (the "September 2015 Letter"), warning of potential regulatory action against us for violations of Section 522 of the Federal Food, Drug, and Cosmetic Act, based on ourmaterial way. The failure to initiate a postmarket surveillance study bycomplete the September 28, 2015 deadline and our allegedly deficient protocol for that study. Between June 2014 and our receipt of the September 2015 Letter, we had responded late to certain of the FDA’s requests related to our study protocol. In February 2016, the FDA sent us an additional information request ("the February 2016 Letter"), requesting additional changes to our study protocol and asking that we comply within 30 days. This letter also discussed the FDA’s request, as modified in our later discussions with the FDA, for a new premarket notification for our ReWalk device(the "special 510(k)"), linked to what the FDA viewed as changes to a computer included with the device. In late March 2016, following multiple discussions with the FDA, including an in-person meeting, the FDA confirmed that the agency would apply enforcement discretion to continued marketing of the ReWalk device conditioned upon our timely submitting a special 510(k) and initiating our postmarket surveillance study by June 1, 2016. The special 510(k) was timely submitted on April 8, 2016, and the FDA’s substantial equivalence determination was received by us on July 22, 2016, granting us permission to continue marketing the ReWalk device. Additionally, we submitted a protocol to the FDA for the postmarket surveillance study that was approved by the FDA on May 5, 2016.

We began the study on June 13, 2016, with Stanford University as the lead investigational site. In August 2016, the FDA sent us a letter stating that, based on its evaluation of our corrective and preventive actions in response to the September 2015 Letter, we had adequately addressed the violations cited in the September 2015 Letter. As part of our study, we have provided the FDA with the required periodic reports on the study’s progress,Acquisition in a few cases with delay. We intend to continue providing the FDA with such reports on a timely basis going forward.

We expect we will be able to respond promptly to the FDA’s further requests associated with the postmarket surveillance study with the assistance of our outside clinical and regulatory services provider. However, we may ultimately be unable to timely satisfy the FDA's requests with respect to the study. Additionally, as of November 1, 2017, we had three active centers enrolling patients in the study, with a total of seven enrolled patients and four active patients, and two others were completing the process to enroll patients by the second half of 2017. This is substantially below the estimated number of patients included in our study protocol, currently leading the FDA to label our progress as “inadequate.” We may seek to modify our study protocol to expand the pool of patients and/or decrease the total number of patients, which change will require approval from the FDA. However, there can be no assurance that the FDA will agree to modify our study or that we will manage to attract the required number of patients under the current requirements or with the revised requirements. If we cannot meet FDA requirements or timely address requests from the FDA related to the study, or if the results of the study are not as favorable as we expect, the FDA may issue additional warning letters to us, impose limitations on the labeling of our device or require us to stop marketing the ReWalk Personal device in the United States. We derived approximately 64% and 68% of our revenues in the fiscal year ended December 31, 2016 and the nine months ended September 30, 2017, respectively, from sales of the ReWalk device in the United States and, if we are unable to market the ReWalk device in the United States, we expect that these sales would be adversely impacted, which could materially adversely affect our business and overall results of operations.

If our product may have caused or contributed to a death or a serious injury, or if our product malfunctioned and the malfunction’s recurrence would be likely to cause or contribute to a death or serious injury, we must comply with medical device reporting regulations, which could result in voluntary corrective actions or agency enforcement actions against us.
Under the medical device reporting (MDR) regulations of the FDA, we are required to report to the FDA any incident in which our product may have caused or contributed to a death or serious injury or in which our product malfunctioned and, if the malfunction were to recur, our product or a similar device marketed by us would be likely to cause or contribute to death or serious injury. In addition, all manufacturers placing medical devices in European Union markets are legally bound to report any serious or potentially serious incidents involving devices they produce or sell to the relevant authority in whose jurisdiction the incident occurred. We recently submitted MDRs to report incidents in which ReWalk Personal users sustained falls or fractures. The FDA has sent us letters requesting additional information relating to these MDRs. Additional events may occur in the future that may require us to report to the FDA pursuant to the MDR regulations. Any adverse event involving our products could result in future voluntary corrective actions, such as recalls or customer letters, agency action, such as inspection, mandatory recall, notification to healthcare professionals and users, or other enforcement action. Any corrective action, whether voluntary or involuntary, as well as defending ourselves in a lawsuit, will require financial resources and distract management, and may harm our reputation and financial results. In addition, failure to report such adverse events to appropriate government authorities on a timely basis,manner or at all could result in enforcement action against us.

A decline in the value of our ordinary shares could result in our being characterized as a passive foreign investment company, which would cause adverse tax consequences for U.S. investors.
Generally, if for any taxable year 75% or more of our gross income is passive income, or at least 50% of the average quarterly value of our assets (which may be determined in part by the market value of our ordinary shares, which is subject to change) are held for the production of, or produce, passive income, we would be characterized as a passive foreign investment company (“PFIC”), for U.S. federal income tax purposes. Passive income for this purpose generally includes, among other things, certain dividends, interest, royalties, rents and gains from commodities and securities transactions and from the sale or exchange of property that gives rise to passive income. Passive income also includes amounts derived by reason of the temporary investment of funds, including those raised in a public offering.  In determining whether a non-U.S. corporation is a PFIC, a proportionate share of the income and assets of each corporation in which it owns, directly or indirectly, at least a 25% interest (by value) is taken into account.  Based on our gross income and assets,negatively impact the market price of our ordinary shares andas it currently reflects an assumption that the nature oftransaction will be completed. Furthermore, if the Acquisition is significantly delayed or not completed, we may suffer other consequences that could adversely affect our business, we do not believe that we were a PFIC forresults of operations and stock price, including the taxable year ended December 31, 2016.  However, therefollowing:
we would have incurred significant costs in connection with the Acquisition that we may be unable to recover;
we may be subject to negative publicity or be negatively perceived by the investment or business communities;
we may be subject to legal proceedings related to the Acquisition;
any disruptions to our business resulting from the announcement and pendency of the Acquisition, including any adverse changes in our relationships with our customers, suppliers, other business partners and employees, may continue or intensify in the event the Acquisition is not consummated; and
we may not be able to take advantage of alternative business opportunities or effectively respond to competitive pressures.
There can be no assurance that weour business, financial condition, operating results and cash flows will not be considered a PFIC for 2017 or any taxable year.  PFIC status is determinedadversely affected, as compared to prior to the announcement of the endAcquisition, if the Acquisition is not consummated.
We may fail to realize the benefits expected from our acquisition of AlterG, which could adversely affect the taxable year and depends on a number of factors, including the value of a corporation’s assets and the amount and type of its gross income.  Further, because the valueprice of our gross assets is likelyordinary shares.
The anticipated benefits from our Acquisition of AlterG are based on projections and assumptions about the combined businesses of ReWalk and AlterG, which may not materialize as expected or which may prove to be determined in large part by reference to our market capitalization, there is a significant risk that a decline in theinaccurate. The value of our ordinary shares could result in our becoming a PFIC.
If we are characterized as a PFIC, U.S. Holders (as defined below) may suffer adverse tax consequences, including the following: (i) having gains realized on the sale of our securities treated as ordinary income, rather than as capital gains; (ii) losing the preferential rate applicable to dividends received on our ordinary shares by individuals who are U.S. Holders, and (iii) having additional taxes equal to the interest charges generally applicable to underpayments of tax apply to distributions by us and the proceeds of sales of our ordinary shares in public offerings. A “U.S. Holder” is defined as follows: a citizen or resident of the United States; a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States or any state thereof, including the District of Columbia; an estate the income of which is subject to U.S. federal income taxation regardless of its source; or a trust if such trust has validly elected to be treated as a United States person for U.S. federal income tax purposes or if (1) a court within the United States is able to exercise primary supervision over its administration and (2) one or more United States persons have the authority to control all of the substantial decisions of such trust. Certain elections exist that may alleviate some of the adverse consequences of PFIC status and would result in an alternative treatment (such as mark-to-market treatment). However, we do not intend to provide the information necessary for U.S. Holders to make qualified electing fund electionsadversely affected if we are classified asunable to realize the anticipated benefits from the Acquisition on a PFIC.timely basis or at all. Achieving the benefits of the Acquisition will depend, in part, on our ability to integrate the business, operations and products of AlterG successfully and efficiently with ReWalk’s business. The process of integrating the operations of ReWalk and AlterG could encounter unexpected costs and delays, which include: the loss of key personnel; the loss of key customers; the loss of key suppliers; and unanticipated issues in integrating sales, marketing and administrative functions.

Future grantsIn addition, our failure to identify or accurately assess the magnitude of ordinary shares under our equity incentive plans to our employees, non-employee directors and consultants, or sales by these individualscertain liabilities we assumed in the public market,Acquisition could result in substantial dilution, thus decreasing the valueunexpected litigation or regulatory exposure, unfavorable accounting charges, unexpected increases in taxes due, a loss of your investment in our ordinary shares, and certain grants may also require shareholder approval.

We have historically used, and continue to use, our ordinary shares as a means of both rewarding our employees, non-employee directors and consultants and aligning their interests with those of our shareholders. As of September 30, 2017, 3,194,556 ordinary shares remained available for issuance to our and our affiliates’ respective employees, non-employee directors and consultants under our equity incentive plans, including 2,592,398 ordinary shares subject to outstanding awards (consisting of outstanding options to purchase 2,238,961 ordinary shares and 353,437 ordinary shares underlying unvested RSUs). These numbers do not reflect the ultimate results of our one-time Equity Exchange Program for the exchange of “underwater” stock options for new RSUs, which expired on October 4, 2017. For more information, see Note 8a to our unaudited condensed consolidated financial statements set forth in “Part I, Item 1. Financial Statements” above. Additionally, the number of ordinary shares available for issuance under our 2014 Plan may increase each year due to the operation of an “evergreen” provision previously approved by our shareholders. Pursuant to this provision, the 2014 Plan’s reserve increases on January 1 of each calendar year during the plan’s term by the lesser of (i) 972,000, (ii) 4% of the total number of shares outstanding on December 31 of the immediately preceding calendar year and (iii) an amount determined by our board of directors.

We previously signed an agreement with a non-employee consultant, who agreed to assist us in commercially promoting and expanding insurance coverage of our ReWalk devices. Although this agreement terminated in May 2017 and was not extended, if we may choose to compensate this consultant for services in an amount equal to those provided for in the expired agreement, the consultant may receive up to ten percent of the increase in our market capitalization following the dates when coverage becomes active under national insurance policies that the consultant secures for us, subject to certain monetary limits. For more information, see Note 8e to our audited consolidated financial statements in our 2016 Form 10-K. If we opt to pay the consultant in ordinary shares, we may need to seek shareholder approval pursuant to the rules of NASDAQ, potentially due to the size of an issuanceanticipated tax benefits or an insufficient number of ordinary shares available for issuance under our 2014 Plan. Any such issuance, or the perception that we will make issuances when we solicit shareholder approval, could substantially dilute existing shareholders and materially decrease the value of an investment in our ordinary shares. Additionally, to the extent registered on a Form S-8, ordinary shares granted or issued under our equity incentive plans will, subject to vesting provisions, lock-up restrictions and Rule 144 volume limitations applicable to our “affiliates,” be available for sale in the open market immediately upon registration. Sales of a substantial number of the above-mentioned ordinary shares in the public market could result in a significant decrease in the market price of our ordinary shares and have a materialother adverse effect on an investment in our ordinary shares.

Sales of a substantial number of ordinary shares by us, our large shareholders and holders of our warrants and other derivative securities, several of whom have registration rights, or volatility or a reduction in the market price of our ordinary shares could have an adverse effecteffects on our ordinary shares.business, operating results or financial condition.
Sales by us or our shareholders of a substantial number of ordinary shares in the public market, or the perception that these sales might occur, could cause the value of our ordinary shares to decline or could impair our ability to raise capital through a future sale of, or pay for acquisitions using, our equity securities.
As of September 30, 2017, 403,804 ordinary shares were issuable pursuant to the exercise of outstanding warrants granted as part of our Series E Preferred investment round in July 2014 at an exercise price of $10.08 and 2,437,500 ordinary shares were issuable pursuant to the exercise of warrants issued in our follow-on offering of ordinary shares and warrants in November 2016, with an exercise price of $4.75. There were also 167,012 ordinary shares issuable pursuant to the exercise of warrants granted to Kreos in connection with the Loan Agreement in January and December 2016, with an exercise price of $9.64, and 2,523,660 ordinary shares issuable pursuant to the conversion of the Kreos Convertible Note at a conversion price of $1.268 per share (subject to customary anti-dilution adjustments).
36
Additionally, pursuant to our Amended and Restated Shareholders’ Rights Agreement, dated July 14, 2014, with certain of our shareholders, as of September 30, 2017, the beneficial owners of approximately 4,116,143 of our ordinary shares were entitled to require that we register their shares under the Securities Act for resale into the public markets. In our Kreos Convertible Note, we separately undertook to prepare and file with the SEC a registration statement to enable the resale by Kreos of up to 2,523,660 ordinary shares to be issued upon conversion of the note, unless they could otherwise be freely sold using Rule 144 under the Securities Act.

All shares sold pursuant to an offering covered by a registration statement would be freely transferable. With respect to the outstanding warrants and the Kreos Convertible Note, there may be certain restrictions on the holders to sell the underlying ordinary shares to the extent they are restricted securities, held by “affiliates” or would exceed certain ownership thresholds. Certain of our largest shareholders, namely, Yaskawa Electric Corporation (“Yaskawa”), and certain entities and individuals affiliated with SCP Vitalife Partners II L.P (“Vitalife”), may also have limitations under Rule 144 under the Securities Act on the resale of certain ordinary shares they hold. Despite these limitations, if we, our existing shareholders or their affiliates sell a substantial number of the above-mentioned ordinary shares in the public market, the market price of our ordinary shares could decrease significantly. Any such decrease could impair the value of your investment in us.
The market price of our ordinary shares has also been highly volatile and may fluctuate substantially due to several factors. Effective May 2017, we transferred our ordinary shares from the NASDAQ Global Market to the NASDAQ Capital Market due to our failure to meet the market value of listed securities requirements and the alternative total assets and total revenue standard requirements of the NASDAQ Global Market. Additionally, since the first quarter of 2017, our ordinary shares have traded periodically between $1.00 and $2.00, reaching an all-time low of $1.10 in the second quarter of 2017. To maintain our current listing on the NASDAQ Capital Market, we must meet certain requirements, including, among others, a minimum closing bid price per share. If the closing bid price of our ordinary shares for 30 consecutive business days is less than $1.00 per share, or if we cannot meet other continued listing requirements, NASDAQ will send us a notification of deficiency and provide us a cure period of 180 days, subject to a potential subsequent cure period of an additional 180 days. After the applicable period, if we cannot show compliance with certain NASDAQ Capital Market listing requirements, we will become subject to delisting proceedings. The perception among investors that we are at heightened risk of delisting could negatively affect the market price and trading volume of our ordinary shares. Additionally, if we become subject to delisting proceedings and fail to appeal a delisting determination, our ordinary shares will be delisted from NASDAQ entirely, which could reduce the number of investors willing to hold or acquire our ordinary shares, increase the volatility of the price of such shares and significantly lower the shares’ trading price and volume. Any of these events could also reduce our liquidity and impair our ability to raise capital.
A small number of our shareholders have a significant influence over matters requiring shareholder approval, which could delay or prevent a change of control.

As of September 30, 2017, the largest beneficial owners of our shares were Yaskawa, certain entities and individuals affiliated with Vitalife, and Kreos, which is deemed a beneficial owner of our ordinary shares pursuant to its right to acquire ordinary shares upon the exercise of the warrants and the conversion of the Kreos Convertible Note, which may be converted at any time, subject to its terms. These holders beneficially owned in the aggregate 23.5% of our ordinary shares as of September 30, 2017 (taking into account Kreos’s beneficial ownership in the total number of ordinary shares outstanding). As a result, Yaskawa and Vitalife, and, if it were to convert all ordinary shares underlying its convertible note, Kreos, could exert significant influence over our operations and business strategy and would together have sufficient voting power to influence significantly the outcome of matters requiring shareholder approval. These matters may include:

determining the composition of our board of directors, which has the authority to direct our business and to appoint and remove our officers;

approving or rejecting a merger, consolidation or other business combination;

raising future capital; and

amending our Second Amended and Restated Articles of Association, as amended by the First Amendment thereto, which govern the rights attached to our ordinary shares.

This concentration of ownership of our ordinary shares could delay or prevent proxy contests, mergers, tender offers, open-market purchase programs or other purchases of our ordinary shares that might otherwise give you the opportunity to realize a premium over the then-prevailing market price of our ordinary shares. This concentration of ownership may also adversely affect our share price.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

There are no transactions that have not been previously included in a Quarterly Report on Form 10-Q or in a Current Report on Form 8-K.
 

Items 2(a) and 2(b) are not applicable.
(c) Stock Repurchases.
Issuer Purchases of Equity Securities
The following table sets forth information regarding the ordinary shares repurchased under our share repurchase program during the three months ended June 30, 2023:
Period
 
Total
Number of
Shares
Purchased
  
Average
Price
Paid Per
Share
  
Total
Number of
Shares
Purchased as
Part of a
Publicly
Announced
Plan
  
(In Thousands)
Maximum
Value
of Shares
That
May Yet Be
Purchased
Under the
Plan
 
April 1 - April 30, 2023
            
Share repurchase program (1)
  
  
$
   
  
$
4,730
 
                 
May 1 - May 31, 2023
                
Share repurchase program (1)
  
67,551
  
$
0.59
   
67,551
  
$
4,688
 
                 
June 1 - June 30, 2023
                
Share repurchase program (1)
  
291,498
  
$
0.59
   
291,498
  
$
4,509
 
Quarter Total
                
                 
Share repurchase program (1)
  
359,049
  
$
0.59
   
359,049
  
$
4,509(2
)
(1) Ordinary Shares were repurchased by us through our publicly announced share repurchase program approved by our Board of Directors on June 2, 2022, and approved by an Israeli court on July 20, 2022. The program was scheduled to expire on the earlier of January 20, 2023, or reaching $8.0 million of repurchases. On December 22, 2022, our Board of Directors approved an extension of the repurchase program, with such extension to be in the aggregate amount of up to $5.8 million. The extension was approved by an Israeli court on February 9, 2023 for a six month period ending on August 9, 2023.
(2) The share repurchase program, as extended, expired on August 9, 2023. No Ordinary Shares were repurchased by us subsequent to June 30, 2023.
37

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5.OTHER INFORMATION
 

Not applicable.

Table of Contents38


ITEM 6. EXHIBIT INDEX

Exhibit
Number
Description
31.1 
Description
2.1
 
10.1
 
 
 
101.INS
 
XBRL Instance Document
101.SCH
 
XBRL Taxonomy Extension Schema Document
101.PRE
 
XBRL Taxonomy Extension Presentation Linkbase Document
101.CAL
 
XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB
 
XBRL Taxonomy Extension Label Linkbase Document
101.DEF
 
XBRL Taxonomy Extension Definition Linkbase Document
__________________________
__________________________
*
Furnished herewith.
**Furnished herewith.
Filed herewith
^
Schedules have been omitted from this exhibit pursuant to Item 601(b)(2) of Regulation S-K.

SIGNATURES
39

 
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 
ReWalk Robotics Ltd.
  
Date: November 2, 2017August 11, 2023
By:
/s/ Larry Jasinski
  Name:
Larry Jasinski
  Title:
Chief Executive Officer
(Principal Executive Officer)
   
Date: November 2, 2017August 11, 2023
By:
/s/ Kevin HershbergerMichael Lawless
  Name: Kevin Hershberger
Michael Lawless
  Title:
Chief Financial Officer
  
(Principal Financial Officer and Principal Accounting Officer)

40
45