Lifeward Ltd. - 1607962

Lifeward Ltd. - 1607962 - 2026

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026

☐ 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

Lifeward 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.)

2 Cabot Rd., Hudson, MA		01749
(Address of principal executive offices)		(Zip Code)

+508.251.1154

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, no par value	LFWD	Nasdaq Capital Market

Indicate by a check mark whether the registrant (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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).

Yes ☒ No ☐

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. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☐

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of May 18, 2026, the registrant had outstanding 2,814,409 ordinary shares.

LIFEWARD LTD.

FORM 10-Q

FOR THE QUARTER ENDED MARCH 31, 2026

TABLE OF CONTENTS

		Page No.
GENERAL AND WHERE YOU CAN FIND MORE INFORMATION		ii
PART I	FINANCIAL INFORMATION	F - 1
ITEM 1.	FINANCIAL STATEMENTS	F - 1
	CONDENSED CONSOLIDATED BALANCE SHEETS - MARCH 31, 2026 (unaudited) AND DECEMBER 31, 2025	F - 1
	CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS – THREE MONTHS ENDED MARCH 31, 2026 AND 2025 (unaudited)	F - 3
	CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY – MARCH 31, 2026 AND 2025 (unaudited)	F - 4
	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS – THREE MONTHS ENDED MARCH 31, 2026 AND 2025 (unaudited)	F - 5
	NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)	F - 6
ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	1
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	9
ITEM 4.	CONTROLS AND PROCEDURES	9
PART II	OTHER INFORMATION	10
ITEM 1.	LEGAL PROCEEDINGS	10
ITEM 1A.	RISK FACTORS	10
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	10
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	10
ITEM 4.	MINE SAFETY DISCLOSURES	10
ITEM 5.	OTHER INFORMATION	10
ITEM 6.	EXHIBITS	11
SIGNATURES		12

Introduction and Where You Can Find Other Information

As used in this quarterly report on Form 10-Q (this “quarterly report”), the terms “Lifeward,” the “Company,” “LL,” “we,” “us” and “our” refer to Lifeward Ltd. and its subsidiaries, unless the context clearly indicates otherwise. Our website is www.golifeward.com. Information contained in, or that can be accessed through, our website does not constitute a part of this quarterly report 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.

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 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 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 continue as a going concern for the next twelve months;

•

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 Private, Governments, and Medicare & Medicaid Services (“CMS”) coverage for our products, including our ability to successfully submit and gain approval of cases for Medicare coverage through Medicare Administrative Contractors (“MACs”);

•

our ability to successfully integrate Oratech Pharmaceuticals Ltd . into our organization, and realize the anticipated benefits therefrom;

•

the expected timing and results of the ORMD-0801 clinical trial;

•

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 ability to achieve expected operating efficiencies and sustain or improve operating expense reductions, and our ability to handle any business disruptions that may occur in connection with streamlining operations;

•

our reliance on third-party contract manufacturers for the production of our AlterG Anti-Gravity Systems and our ability to maintain product quality, ensure timely production and delivery, and manage potential supply chain disruptions;

•

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;

•

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 incident relating to our information technology systems significantly disrupting our business operations;

•

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 maintain compliance 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;

•

our ability to effectively use the proceeds from our recent offerings of securities;

•

our ability to repay amounts due, and perform our obligations under and comply with the terms and conditions of, our Secured Promissory Notes;

•

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 inflationary pressures, interest rate and currency rate fluctuations, and changes in trade policies (including tariffs and trade protection measures that have been or may in the future be imposed by the U.S. or other countries), or global instability may disrupt our business operations or our financial condition or the financial condition of our customers and suppliers, including the ongoing Russia-Ukraine conflict, ongoing conflict in the Middle East (including any escalation or expansion) and the increasing tensions between China and Taiwan; and

•

other factors discussed in the “Risk Factors” section of our 2025 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 forward-looking statements contained in this quarterly report. 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 2025 annual report on Form 10-K, and in other reports subsequently filed by us with, or furnished to, 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.

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

LIFEWARD LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	March 31,		December 31,
	2026		2025
		(unaudited)
ASSETS

CURRENT ASSETS

Cash and cash equivalents		11,422		2,169
Restricted Cash		10		240
Clinical trial services asset (1)		366		-
Trade receivables, net of credit losses of $234 and $192, respectively		5,664		6,138
Prepaid expenses and other current assets		1,844		1,528
Inventories		6,251		5,732
Total current assets		25,557		15,807

LONG-TERM ASSETS

Restricted cash and other long-term assets		436		209
Clinical trial services asset (1)		609		-
Operating lease right-of-use assets		1,491		1,544
Property and equipment, net		571		585
Goodwill		4,755		4,755
Total long-term assets		7,862		7,093
Total assets		33,419		22,900

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

(1) Balance relates entirely to a related party arrangement with Oramed Pharmaceuticals Inc.

F - 1

LIFEWARD LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	March 31,			December 31,
	2026			2025
	(unaudited)
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Trade payables		6,376			5,590
Employees and payroll accruals		1,285			1,442
Deferred revenues		966			920
Convertible promissory note (2)		-			2,803
Current maturities of operating leases liability		425			425
Other current liabilities		1,583			859
Total current liabilities		10,635			12,039

LONG-TERM LIABILITIES
Convertible promissory notes, net (3)		7,276			-
Warrant liabilities (4)		6,842			-
Deferred revenues		1,208			1,233
Non-current operating leases liability		1,113			1,159
Other long-term liabilities		54			61
Total long-term liabilities		16,493			2,453

Total liabilities		27,128			14,492

COMMITMENTS AND CONTINGENT LIABILITIES
Shareholders’ equity:

Share capital
Ordinary share Authorized: 100,000,000 shares at March 31, 2026 and 75,000,000 December 31, 2025; Issued: 2,826,473 and 1,572,319 shares at March 31, 2026 and December 31, 2025, respectively; Outstanding: 2,778,585 and 1,524,431 shares as of March 31, 2026 and December 31, 2025 respectively (5)		9,418			9,418
Additional paid-in capital		295,608			286,932
Treasury Shares at cost, 47,888 ordinary shares at March 31, 2026 and December 31, 2025		(3,203	)		(3,203	)
Accumulated deficit		(295,532	)		(284,739	)
Total shareholders’ equity		6,291			8,408
Total liabilities and shareholders’ equity		33,419			22,900

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

(2) Represents amounts due to Oramed Pharmaceuticals Inc. as of December 31, 2025. Oramed became a related party upon completion of the March 2026 transaction.

(3) Includes balances attributable to Oramed Pharmaceuticals Inc., a related party, of $6,542 as of March 31, 2026.

(4) Includes balances attributable to Oramed Pharmaceuticals Inc., a related party, of $6,557 as of March 31, 2026.

(5) Reflects the one-for-twelve reverse share split that became effective on February 24, 2026. See Note 8a to the condensed consolidated financial statements.

F - 2

LIFEWARD LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except share and per share data)

	Three Months Ended March 31,
	2026			2025
Revenues		3,923			$5,034
Cost of revenues		2,581			2,912

Gross profit		1,342			2,122

Operating expenses:
Research and development, net		5,845			918
Sales and marketing		3,271			3,837
General and administrative		2,565			2,220

Total operating expenses		11,681			6,975

Operating loss		(10,339	)		(4,853	)
Financial expense (income), net (6)		448			(30	)

Loss before income taxes		(10,787	)		(4,823	)
Taxes on income		6			11

Net loss	$	(10,793	)	$	(4,834	)

Net loss per ordinary share, basic and diluted	$	(6.70	)	$	(5.53	)

Weighted average number of shares used in computing net loss per ordinary share, basic and diluted (5)		1,610,969			873,845

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

(5) Reflects the one-for-twelve reverse share split that became effective on February 24, 2026. See Note 8a to the condensed consolidated financial statements.

(6) Includes net financing expense comprised of interest expense and changes in fair value of warrant and derivative liabilities related to Oramed Pharmaceuticals Inc., a related party, of $416 for the three months ended March 31, 2026.

F - 3

LIFEWARD 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 (5)		Amount		capital			Shares			deficit			equity

Balance as of December 31, 2024		733,966	$	4,590	$	282,287		$	(3,203	)	$	(264,825	)	$	18,849
Share-based compensation to employees and non-employees		-		-		220			-			-			220
Issuance of ordinary shares upon vesting of RSUs by employees and non-employees		329		2		(2	)		-			-			-
Issuance of ordinary shares, net of issuance expenses in the amount of $779 (7)		151,515		869		3,352			-			-			4,221
Net loss		-		-		-			-			(4,834	)		(4,834	)
Balance as of March 31, 2025		885,810	$	5,461	$	285,857		$	(3,203	)	$	(269,659	)	$	18,456

Balance as of December 31, 2025		1,524,431	$	9,418	$	286,932		$	(3,203	)	$	(284,739	)	$	8,408
Share-based compensation to employees and non-employees		-		-		177			-			-			177
Issuance of ordinary shares upon vesting of RSUs by employees and non-employees		3,791		-		-			-			-			-
Issuance of ordinary shares in connection with the Oratech transaction (8)		1,250,363		-		8,499			-			-			8,499
Net loss		-		-		-			-			(10,793	)		(10,793	)
Balance as of March 31, 2026		2,778,585	$	9,418	$	295,608		$	(3,203	)	$	(295,532	)	$	6,291

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

(5) Reflects the one-for-twelve reverse share split that became effective on February 24, 2026. See Note 8a to the condensed consolidated financial statements.

(7) See Note 8f to the condensed consolidated financial statements.

(8) See Note 6 to the condensed consolidated financial statements.

F - 4

LIFEWARD LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	Three Months Ended March 31,
	2026			2025
Cash flows used in operating activities:
Net loss	$	(10,793	)	$	(4,834	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		59			90
Share-based compensation		177			220
Amortization of acquired in-process R&D asset		4,947			-
Warrant and derivative liabilities issuance cost		113			-
Amortization of discount and issuance costs of convertible note		940			-
Change in fair value of warrant and derivative liabilities		(525	)		-
Exchange rate fluctuations		(3	)		(7	)
Changes in assets and liabilities:
Trade receivables, net		474			839
Prepaid expenses and other assets		(256	)		(271	)
Operating lease right-of-use assets		53			91
Inventories		(624	)		(86	)
Trade payables		1,228			(806	)
Employees and payroll accruals		(157	)		(158	)
Deferred revenues		21			(72	)
Operating lease liabilities		(46	)		(261	)
Other liabilities		717			(238	)
Net cash used in operating activities		(3,675	)		(5,493	)

Cash flows used in investing activities:
Purchase of property and equipment		-			(5	)
Cash acquired in connection with the acquisition of Oratech (9)		6,500			-
Net cash provided by (used in) investing activities		6,500			(5	)

Cash flows from financing activities:
Issuance of ordinary shares in a “registered direct” offering, net of issuance expenses in the amount of $529 (7)		-			4,471
Net proceeds from issuance of Additional Notes (10) (11)		1,025			-
Net proceeds from issuance of New Notes (10) (12)		1,955			-
Net proceeds from issuance of derivative liabilities (10) (12)		1,820			-
Net proceeds from issuance of warrant liabilities (10) (12)		1,622			-
Net cash provided by financing activities		6,422			4,471

Effect of Exchange rate changes on Cash, Cash Equivalents and Restricted Cash		3			7
Increase (Decrease) in cash, cash equivalents, and restricted cash		9,250			(1,020	)
Cash, cash equivalents, and restricted cash at beginning of period		2,579			7,108
Cash, cash equivalents, and restricted cash at end of period	$	11,829		$	6,088
Supplemental disclosures of non-cash flow information
Classification of inventory to property and equipment, net	$	45		$	5
Recognition of warrant liability upon issuance of New Notes	$	1,175		$	-
Recognition of derivative liability associated with New Notes	$	1,317		$	-
Expenses related to offerings not yet paid (7)	$	-		$	250
Supplemental cash flow information:
Cash and cash equivalents	$	11,422		$	5,728
Restricted cash		407			360
Total Cash, cash equivalents, and restricted cash	$	11,829		$	6,088

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

(7) See Note 8f to the condensed consolidated financial statements.

(9) Represents cash acquired in connection with the acquisition of Oratech from Oramed Pharmaceuticals Inc., a related party, of $6,500.

(10) See Note 9 to the condensed consolidated financial statements.

(11) Represents proceeds from issuance of Additional Notes to Oramed Pharmaceuticals Inc., a related party, of $1,025 for the three months ended March 31, 2026.

(12) Includes proceeds from issuance of New Notes, derivative liabilities and warrant liabilities to Oramed Pharmaceuticals Inc., a related party, of $4,397 for the three months.

F - 5

LIFEWARD LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1:

GENERAL

Lifeward Ltd. (“LL,” and together with its subsidiaries, the “Company”) was originally incorporated under the laws of the State of Israel on June 20, 2001, and commenced operations on the same date under the name Argo Medical Technologies Ltd. This name was later changed to ReWalk Robotics Ltd. on June 18, 2014. On January 29, 2024, the Company announced that it had rebranded as Lifeward, with each subsidiary of LL renamed to reflect the new corporate identity. The Company officially changed its name to Lifeward Ltd. on September 10, 2024.

LL has three wholly owned (directly and indirectly) subsidiaries: (i) Lifeward, Inc. (“LI”) originally incorporated under the laws of Delaware on February 15, 2012 under the name of ReWalk Robotics, Inc., (ii) Lifeward GMBH (“LG”) originally incorporated under the laws of Germany on January 14, 2013 under the name of ReWalk Robotics GMBH, and (iii) Lifeward CA, Inc. ( “LCAI”) originally incorporated in Delaware on October 21, 2004 under the name of Gravus, Inc., which was later changed to AlterG, Inc. on June 30, 2005, and (iv) Oratech Pharmaceuticals Ltd. (“Oratech”), incorporated under the laws of the State of Israel on March 18, 2026.

The Company is a medical device company that designs, develops, and commercializes life-changing solutions that span the continuum of care in physical rehabilitation and recovery, delivering proven functional and health benefits in clinical settings as well as in the home and community, now complemented by a biomedical pipeline. The Company’s initial product offerings were the ReWalk Personal and ReWalk Rehabilitation Exoskeleton devices for individuals with spinal cord injury (collectively, the “SCI Products”). These devices are robotic exoskeletons that are designed for individuals with paraplegia that use the Company’s 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. In the past, the Company developed the ReStore Exo-Suit device (“ReStore”), a powered, lightweight soft exo-suit intended for use during the rehabilitation of individuals with lower limb disabilities due to stroke. The Company is no longer actively commercializing the ReStore product. The Company distributes the MYOLYN MyoCycle FES Pro cycles to U.S. rehabilitation clinics and the MyoCycle Home cycles available to U.S. veterans through VA hospitals on a non-exclusive basis.

In August 2023, the Company acquired AlterG, Inc., a provider of anti-gravity systems. AlterG’s systems utilize patented, NASA-derived Differential Air Pressure (“DAP”) technology designed to reduce the effects of gravity and enable patients to rehabilitate with calibrated support and reduced pain. Following the Company’s rebranding, AlterG, Inc. was renamed LCAI and operates as a wholly owned subsidiary of the Company.

In March 2026, the Company expanded its strategic initiatives into biomedical technologies through the acquisition of Oratech, a wholly owned subsidiary focused on the development and commercialization of innovative pharmaceutical technologies and clinical-stage assets. As part of the transaction, the Company acquired intellectual property and related rights associated with ORMD-0801, an oral insulin candidate based on proprietary oral delivery technology, together with certain rights related to the management of future clinical development activities.

F - 6

LIFEWARD LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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 the United States, through a combination (depending on the product line) of direct sales and distributors in Germany, Canada, and Australia, and primarily through distributors in other markets. In its direct markets, the Company has established relationships with clinics and rehabilitation centers, professional and college sports teams, and individuals and organizations in the spinal cord injury community, and in its indirect markets, the Company’s distributors maintain these relationships.

Beginning in the second quarter of 2025, the Company transitioned the manufacturing of its ReWalk exoskeleton products to its facility in Yokneam, Israel, where the Company currently manufactures these systems. The Company depends on one contract manufacturer to manufacture the AlterG products in its portfolio, Cirtronics Corporation. Reliance on this vendor makes the Company vulnerable to possible capacity constraints and reduces control over component availability, delivery schedules, manufacturing yields and costs.

As of March 31, 2026, the Company incurred a consolidated net loss of $10.8 million and, as of March 31, 2026, had an accumulated deficit in the total amount of $295.5 million. The Company’s cash and cash equivalents as of March 31, 2026 totaled $11.4 million and the Company’s negative operating cash flow for the three months ended March 31, 2026 was $3.7 million.

The Company expects to continue to generate operating losses and negative operating cash flows in the foreseeable future and will require additional funding to support its planned operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The Company intends to raise additional capital through one or more financing in order to meet its anticipated cash requirements. On March 25, 2026, the Company completed the previously announced strategic transaction and related financing arrangements, as further described in Notes 6 and 9. The transaction provided the Company with additional liquidity to support its operations. However, despite the additional financing received, management determined that the Company’s existing cash resources are not sufficient to fund planned operations for at least 12 months from the date of issuance of these consolidated financial statements.

If the Company is unable to obtain additional capital, management may implement measures intended to manage cash expenditures and preserve liquidity. These measures may include prioritizing research and development activities, delaying certain product development initiatives, and reducing discretionary operating expenses such as marketing, travel and other non-essential costs.

Accordingly, the Company has concluded that substantial doubt exists about its ability to continue as a going concern for at least 12 months from the date of issuance of these consolidated financial statements.

The accompanying unaudited 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. These financial statements 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.

NOTE 2:

BASIS OF PRESENTATION AND SUMMARY OF ESTIMATES

Basis of Presentation and Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting 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 management’s opinion, the accompanying financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. The Company’s interim period results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year.

These unaudited condensed consolidated financial statements and accompanying notes should be read in conjunction with the 2025 consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 2025 (the “2025 Form 10-K”). There have been no changes in the significant accounting policies from those that were disclosed in the consolidated financial statements for the fiscal year ended December 31, 2025, included in the 2025 Form 10-K, unless otherwise stated.

Use of Estimates

The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments, and assumptions. The Company’s management believes that the estimates, judgments, and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, the Company’s management evaluates estimates, including those related to inventories, fair values of share-based awards, derivatives, contingent liabilities, goodwill impairment, provision for warranty, allowance for credit losses, revenue recognition, and deferred taxes. Such estimates are based on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates.

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LIFEWARD LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3:

SIGNIFICANT ACCOUNTING POLICIES

Fair Value Measurements

Cash and cash equivalents, restricted cash, prepaid expenses and other assets, trade payables and accrued expenses and other liabilities, are stated at their carrying value which approximates their fair value due to the short time to the expected receipt or payment.

The following tables present information about the Company’s financial assets and liabilities that are measured in fair value on a recurring basis as of March 31, 2026 and December 31, 2025 (in thousands):

		Fair value measurements as of
Description	Fair Value Hierarchy	March 31, 2026		December 31, 2025

Financial Liabilities:
Pre-Funded Warrant Liability	Level 3		2,154		-
Derivative liability	Level 3		3,197		1,366
Warrant Liability	Level 3		4,688		-
Total liabilities measured at fair value		$	10,039	$	1,366

The estimated fair value of the derivative liability and warrant liability is using the Black-Scholes option-pricing model, which is a Level 3 fair value measurement. The model requires the use of several key assumptions, including the stock price, exercise price, expected term, expected volatility, risk-free interest rate, expected dividend yield and assumptions related to the Company’s non-performance risk and other company-specific risk adjustments, which represent significant unobservable inputs.

The estimated fair value of the pre-funded warrant liability was based on the quoted fair value of the underlying instrument, adjusted for company-specific risk considerations and other valuation assumptions. As the valuation incorporated significant unobservable inputs, the pre-funded warrant liability was classified as a Level 3 fair value measurement under ASC 820.

The following table provides the inputs used for Level 3 fair value measurements of derivative liability:

	March 31, 2026			December 31, 2025
Stock price	$	6.63		$	6.96
Term (in years)	2.99			0.37
Volatility		80.01	%		87.91%-93.12%
Risk-free rate		3.88	%		3.65%-3.65%
Dividend yield		0	%		0	%

The following table provides the inputs used for Level 3 fair value measurements of warrant liability:

	March 31, 2026			December 31, 2025
Stock price	$	6.63		$	-
Term (in years)	4.99			-
Volatility		72.37	%		-
Risk-free rate		4.01	%		-
Dividend yield		-			-

Derivative liability at fair value

The following table summarizes the derivative liability activity as of March 31, 2026 (in thousands):

	Derivative liability
Balance December 31, 2025	$	1,366
Issuance of derivative liability	2,478
Change in fair value		(647	)
Balance March 31, 2026	$	3,197

Pre-Funded Warrant and Warrant Liabilities at Fair Value

The following table summarizes the warrant liability activity as of March 31, 2026 (in thousands):

	Warrant liability
Balance December 31, 2025	$	-
Issuance of warrant liability	6,720
Change in fair value		122
Balance March 31, 2026	$	6,842

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LIFEWARD LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Convertible Promissory Notes

The Company applies ASC 470-20, “Debt with Conversion and Other Options” (“ASC 470-20”). In accordance with ASC 470-20 the Company first allocates the proceeds to freestanding liability instrument that are measured at fair value at each reporting date, based on their fair value. The remaining proceeds are allocated between the convertible debt and any bifurcated embedded derivatives.

In accordance with ASC 815 “Derivatives and Hedging” (“ASC 815”), the Company bifurcates embedded derivatives for the conversion option that require bifurcation and accounts for it separately from the convertible debt.

The Company applies ASC 815, “Derivatives and Hedging” to all features related to convertible debt. When features meet the definition of a derivative that do not qualify for any scope exceptions within ASC 815, they are required to be accounted for separately from the debt instrument and recorded as derivative instrument liabilities. The fair value assigned to the embedded derivative instruments is marked to market in each reporting period. The Company has recorded embedded derivative liabilities related to the convertible promissory note. Liability classified bifurcated embedded derivatives are presented in the same line item with the related debt host liability

For further information regarding the convertible promissory notes, see Note 9.

Revenue Recognition

The Company generates revenues from sales of products. The Company sells its products directly to end customers and through distributors. The Company sells its products to clinics and rehabilitation centers, professional and college sports teams, private individuals (who finance the purchases by themselves, through fundraising or reimbursement coverage from insurance companies), and distributors.

Disaggregation of Revenues (in thousands):

	Three Months Ended March 31,
	2026		2025
Sale of products	$	2,967	$	3,726
Lease of products		409		460
Service and warranties		547		848
Total Revenue	$	3,923	$	5,034

Product revenue

The Company offered to its customers five products: (1) ReWalk Personal, (2) ReWalk Rehabilitation, (3) AlterG Anti-Gravity system, (4) MyoCycle, and (5) ReStore.

Revenue from Products sold to rehabilitation facilities and end users is recognized at a point in time once the customer has obtained control of the products usually upon delivery.

The Company generally does not grant a right of return for its products.

With the recent establishment of a Medicare reimbursement pathway for the ReWalk product, the Company includes variable consideration in the form of implicit price concessions if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. The Company reassesses variable consideration at each reporting period and, if necessary, these estimates are adjusted to reflect the anticipated amounts to be collected when those facts and circumstances become known.

For contracts with Medicare, the Company determines the amount of variable consideration that should be included at the transaction price, using contractual agreements and historical reimbursement experience with Medicare. The Company applies constraint to the transaction price, such that revenue is recorded only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in the future. If actual amounts of consideration ultimately received differ from the Company’s estimates, the Company adjusts these estimates, which would affect revenue in the period such adjustments become known. During the three-month period ended March 31, 2026, as a result of a change in estimate, the Company increased revenue by approximately $0.1 million , due to the consideration ultimately received compared with the amounts previously estimated.

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LIFEWARD LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Lease revenue

A portion of the Company's sales of products to customers are made through lease arrangements which typically include AlterG Anti-Gravity systems. Revenue for the lease of AlterG Anti-Gravity systems is accounted for under ASC Topic 842, Leases. AlterG Anti-Gravity systems being utilized under service agreements, accounted for in accordance with ASC 842 as an operating lease. Revenues are recognized ratably over the lease term.

Service and warranties

The Company provides product assurance warranties for periods of 1- 10 years (usually 2 years) that cover the compliance of the products with agreed-upon specifications. A provision is recorded for estimated warranty costs based on the Company's experience.

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 time. An assurance type warranty is not accounted for as a separate performance obligation under the revenue model.

In certain contracts, the company also provides a service-type warranty. Service-type warranty is accounted for as a separate performance obligation, and revenue is recognized ratably over the service period as the customer consumes the benefit over the service term.

Contract balances (in thousands):

	March 31,		December 31,
	2026		2025
Trade receivable, net of credit losses	$	5,664	$	6,138
Deferred revenues (1)	$	2,174	$	2,153

During the three months ended March 31, 2026, $443 thousand of the December 31, 2025 deferred revenues balance was recognized as revenues.

Deferred revenue is composed primarily of unearned revenue related to service type warranty obligations, multi-year services contracts, as well as other advances and payments which the Company received from customers prior to satisfying the performance obligation, for which revenue has not yet been recognized.

The Company’s unearned performance obligations as of March 31, 2026 and the estimated revenue expected to be recognized in the future amounts to $2.4 million, which will be fulfilled over one to five years.

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LIFEWARD LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Concentrations of Credit Risks:

The below table reflects the concentration of credit risk for the Company’s current customers as of March 31, 2026, to which substantial sales were made:

	March 31,			December 31,
	2026			2025
Customer A		62	%		56	%

The allowance for credit losses is based on the Company’s assessment of the collectability of accounts. The Company regularly assessed collectability based on a combination of factors, including an assessment of the current customer’s aging balance, the nature and size of the customer, the financial condition of the customer, and future expected economic conditions. The Company does not have any off-balance sheet credit exposure related to its customers. As of March 31, 2026 and December 31, 2025 trade receivables are presented net of allowance for credit losses in the amount of $234 thousand and $192 thousand respectively.

Warranty provision

For assurance-type warranty, the 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, 2025	$	343
Provision	133
Usage		(136	)
Balance at March 31, 2026	$	340

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.

As of March 31, 2026 and 2025, outstanding warrants, pre-funded warrants, share options and convertible notes convertible or exercisable into 6,973,007 and 357,779 ordinary shares, respectively, were excluded from the calculation of diluted loss per ordinary share because their effect would have been anti-dilutive.

Goodwill and acquired intangible assets

Goodwill has been recorded in the Company's financial statements resulting from various business combinations. Goodwill represents the excess of the purchase price in a business combination over the fair value of identifiable tangible and intangible assets acquired and liabilities assumed. Goodwill is subject to an annual impairment test.

The Company currently has one reporting unit.

ASC 350, Intangibles - Goodwill and other (“ASC 350”) requires goodwill to be tested for impairment at least annually and, in certain circumstances, between annual tests. The accounting guidance gives the option to perform a qualitative assessment to determine whether further impairment testing is necessary. The qualitative assessment considers events and circumstances that might indicate that a reporting unit's fair value is less than its carrying amount. If it is determined, as a result of the qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative test is performed. The Company elects to perform an annual impairment test of goodwill as of December 31 of each year, or more frequently if impairment indicators are present.

The Company concluded that no impairment of goodwill was identified for the three months ended March 31, 2026 and 2025. Refer to Note 5 for further details.

Acquired In-Process Research and Development

In an asset acquisition, the initial costs of rights to in-process research and development projects acquired are expensed as R&D in the consolidated statements of operations unless the in-process research and development has an alternative future use. In a business combination, the fair value of in-process research and development is capitalized as an indefinite-lived intangible asset, regardless of whether the in-process research and development asset has an alternative future use.

During the three months ended March 31, 2026, the Company recognized approximately $4.9 million of acquired in-process research and development expense related to the Oratech asset acquisition, as the acquired in-process research and development assets were determined to have no alternative future use.

Restricted cash and Other long-term assets:

Other long-term assets include long-term prepaid expenses and restricted cash deposits for offices and cars leasing based upon the term of the remaining restrictions.

F - 11

LIFEWARD LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

New Accounting Pronouncements

Recently Implemented Accounting Pronouncements

In July 2025, the Financial Accounting Standard Board (“FASB”) issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606, Revenue from Contracts with Customers. The practical expedient assumes that current conditions as of the balance sheet date do not change for the remaining life of the assets. The Company adopted this guidance on January 1, 2026. on a prospective basis, and elected the practical expedient provided by ASU 2025-05. Under this expedient, the Company assumes that economic conditions as of the balance sheet date remain unchanged for the remaining life of all current accounts receivable and current contract assets arising from transactions under ASC 606. The Company continues to estimate expected credit losses for non-current receivables and contract assets in accordance with ASC 326. The adoption did not have a material impact on its consolidated financial statements.

Recent Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.

ii.

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. The update provides recognition, measurement, presentation, and disclosure requirements for government grants, including guidance for grants related to an asset and grants related to income. The amendments introduce two permitted approaches for asset-related grants: a deferred income approach or a cost accumulation approach. The guidance is effective for the Company beginning December 15, 2028, with early adoption permitted. The Company is currently evaluating the impact on its consolidated financial statement.

iii.

In December 2025, the FASB issued ASU 2025-11 to amend the guidance in Interim Reporting (Topic 270). The update provides clarifications intended to improve the consistency and usability of interim disclosure requirements, including a comprehensive listing of required interim disclosures and a new disclosure principle for reporting material events occurring after the most recent annual period. The amendments do not change the underlying objectives of interim reporting but are designed to enhance clarity in application. The guidance is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years. The Company is currently evaluating the impact on its consolidated financial statement disclosures.

NOTE 4:

INVENTORIES

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

	March 31,		December 31,
	2026		2025
Finished products	$	3,438	$	3,689
Work in process		151		38
Raw materials		2,662		2,005
	$	6,251	$	5,732

F - 12

LIFEWARD LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 5:

GOODWILL AND OTHER INTANGIBLE ASSETS, NET

The Company periodically evaluates whether events or changes in circumstances indicate that the carrying amount of goodwill may not be recoverable. During the second quarter of 2025, the Company experienced a decline in its stock price, resulting in its market capitalization falling below the carrying value of its single reporting unit. Accordingly, the Company performed a quantitative goodwill impairment assessment.

The fair value of the reporting unit was determined using a market approach, which incorporates the Company’s market capitalization adjusted by an appropriate control premium. Market capitalization is calculated by multiplying the number of shares of common stock outstanding by the market price of the Company’s common stock. The control premium represents the amount a market participant would pay to obtain a controlling interest and was estimated based on publicly available data for comparable transactions.

As a result of this assessment, the Company recorded a goodwill impairment charge of $2.8 million during the year ended December 31, 2025.

NOTE 6:

ASSET ACQUISITION

On March 25, 2026, the Company completed the acquisition of Oratech in accordance with the terms of the Share Purchase Agreement (“SPA”) entered into by the parties on January 12, 2026.

As consideration for the transaction, the Company issued an aggregate of 1,250,363 Ordinary Shares and Pre-Funded Warrants to purchase 1,006,113 Ordinary Shares. In addition, the Company issued 1,296,296 freestanding warrants to purchase Ordinary Shares at an exercise price of $5.4 per share and agreed to pay Oramed Pharmaceuticals, Inc. (“Oramed”) certain quarterly revenue sharing payments based on future sales.

The Company concluded that the Oratech acquisition should be accounted for as an asset acquisition. As such, the consideration paid in the asset acquisition was allocated to the purchased assets. The asset acquisition total consideration was $12.4 million and was comprised of the fair values of the Ordinary Shares, Pre-Funded Warrants and Warrants. The revenue sharing arrangement was excluded from consideration as it did not meet the definition of a derivative under ASC 815.

The acquired assets primarily consist of patented technology and cash in the amount of $6.5 million In connection with the agreement, the Company also entered into a clinical trial management agreement with Oramed in which Oramed will provide clinical trial management services for the Company in connection with the acquired intellectual property. The Company concluded that the costs of the clinical trial services under the agreement are below market value, and as such, the Company recognized approximately $1.0 million as a prepaid asset for future services. The total consideration allocated to the intellectual property was $5.9 million.

The total consideration transferred was allocated to the acquired assets as follows (in thousands):

Asset	Allocated Cost
Cash acquired	$	6,500
Prepaid clinical trial services asset	$	975
In-process research and development (“IPR&D”)	$	4,947
Total	$	12,422

As the acquired IPR&D asset was determined to have no alternative future use, the allocated value was immediately recognized as research and development expense.

The pre-funded warrants and the freestanding warrants that were allocated to the asset acquisition were classified as liabilities, measured at fair value through earnings, as these instruments are not indexed to the Company's own stock.

NOTE 7:

COMMITMENTS AND CONTINGENT LIABILITIES

Purchase commitments:

The Company has contractual obligations to purchase goods from its contract manufacturer as well as raw materials from different vendors. Purchase obligations do not include contracts that may be canceled without penalty. As of March 31, 2026, non-cancelable outstanding obligations amounted to approximately $10.4 million.

Operating lease commitment:

(i)

The Company operates from leased facilities in Israel, the United States and Germany. These leases expire in 2030. 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.

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LIFEWARD LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(ii)

LL and LG lease cars for their employees under cancelable operating lease agreements expiring at various dates between 2026 and 2029. A subset of the Company’s car leases is considered variable. The variable lease payments for such car leases are based on actual mileage incurred at the stated contractual rate. LL and LG have an option to be released from these agreements, which may result in penalties in a maximum amount of approximately $33 thousand as of March 31, 2026.

Government grants

The Company’s research and development efforts are financed, in part, through funding from the Israel Innovation Authority (“IIA”). Since the Company’s inception through March 31, 2026, the Company received funding from the IIA in the total amount of $2.8 million. Out of the $2.8 million in funding from the IIA, a total amount of $1.6 million were royalty-bearing grants, $400 thousand was received in consideration of 209 convertible preferred A shares, which converted after the Company’s initial public offering in September 2014 into ordinary shares in a conversion ratio of 1 to 1, while $833 thousand was received without future obligation. The Company is obligated to pay royalties to the IIA, amounting to 3% 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 SOFRPR 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.

As of March 31, 2026, the Company paid royalties to the IIA in the total amount of $117 thousand.

There were no royalty expenses for the three months ended March 31, 2026 and 2025 respectively.

As of March 31, 2026, the contingent liability to the IIA amounted to $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.

Liens:

As part of the Company’s other long-term assets and restricted cash, an amount of $407 thousand has been pledged as security in respect of a guarantee granted to a third party. Such deposit cannot be pledged to others or withdrawn without the consent of such third party.

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. While the outcome of any pending or threatened litigation and other legal matters is inherently uncertain, the Company does not believe the outcome of any of the matters will have a material adverse effect on the Company’s consolidated results of operation, liquidity or financial condition.

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LIFEWARD LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 8:

SHAREHOLDERS’ EQUITY

Reverse share split:

At the Company’s extraordinary general meeting of shareholders held on January 6, 2026, the Company’s shareholders approved amendments to the Company’s Articles of Association to effect (i) a reverse share split of the Company’s ordinary shares within a range of 1-for-2 to 1-for-12, to be effective at the ratio and on a date to be determined by the Board of Directors, and (ii) an increase in the Company’s authorized share capital to up to 100,000,000 ordinary shares following implementation of the reverse share split. On January 30, 2026, the Finance Committee of the Board approved a one-for-twelve reverse share split of the Company’s ordinary shares, and on February 16, 2026 approved amendments to the Company’s Articles of Association to reflect the implementation of the reverse share split and the increase in authorized share capital.

On February 24, 2026, the Company effected the one-for-twelve reverse share split of its ordinary shares. As a result of the reverse share split, every twelve issued and outstanding ordinary shares were automatically combined and converted into one ordinary share. The number of the Company’s issued and outstanding ordinary shares was reduced from 18,339,098 pre-split shares to 1,528,207 post-split shares. Concurrently, the total authorized number of ordinary shares under the Company’s Articles of Association increased from 75,000,000 ordinary shares to 100,000,000 ordinary shares.

Appropriate adjustments were also made to all outstanding derivative securities of the Company, including warrants, pre-funded warrants and stock options, such that the number of ordinary shares underlying such securities and the applicable exercise prices were proportionately adjusted in accordance with their terms and the Company’s equity incentive plans.

No fractional shares were issued in connection with the reverse share split and fractional shares were rounded down to the nearest whole share.

Share option plans:

As of March 31, 2025, and December 31, 2025, the Company had reserved 224,439 and 39,851 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 2025 Incentive Compensation Plan (the “2025 Plan”). The Company’s shareholders approved the 2025 Plan on August 1, 2025, and it became effective on the same date. Certain awards granted under the Company’s prior 2014 Incentive Compensation Plan (the “2014 Plan”) remain outstanding and continue to be governed by its terms.

RSUs have been granted to non-employee directors and employees under the 2025 Plan. An RSU award represents a right to receive the Company’s ordinary shares upon vesting.

Options to purchase ordinary shares have been granted to employees and non-employee directors under the Company’s equity incentive plans.

Any options or RSUs that are forfeited or canceled before expiration become available for future grants under the 2025 Plan, as applicable.

Equity awards granted under the Company’s equity incentive plans generally vest over four years, with certain awards granted to non-employee directors vesting quarterly over one year.

The fair value for options granted during the three months ended March 31, 2026, was estimated at the date of the grant using a Black-Scholes-Merton option pricing model with the following assumptions:

	Three Months Ended March 31,
	2026			2025
Expected volatility	95.1		%	-
Risk-free rate		4.1	%		-
Dividend yield		-			-
Expected term (in years)		6.08			-
Share price	$	6.53			-

There were no options granted during the three months that ended March 31, 2025.

F - 15

LIFEWARD LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

A summary of employee and non-employee share options activity during the three months ended March 31, 2026, is as follows:

	Number			Weighted average exercise price		Weighted average remaining contractual life (years)		Aggregate intrinsic value (in thousands)
Options outstanding as of December 31, 2025	52,450			$	13.86	9.43		$	-
Granted	212,692			6.53		-		-
Exercised		-			-		-		-
Forfeited		(3	)		2,142		-		-
Options outstanding as of March 31, 2026		265,139		$	10.41		9.83	$	21

Options exercisable as of March 31, 2026		364		$	1,979.98		0.21	$	-

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. No options were exercised during the three months ended March 31, 2026 and 2025.

A summary of employee and non-employee RSUs activity during the three months ended March 31, 2026 is as follows:

	Number of shares underlying outstanding RSUs			Weighted- average grant date fair value
Unvested RSUs as of December 31, 2025	$	73,433		$	15.30
Granted	45,941			6.53
Vested		(3,791	)		9.52
Forfeited		(7,802	)		13.80
Unvested RSUs as of March 31, 2026	$	107,781		$	11.88

The fair value of RSUs granted is determined based on the price of the Company's ordinary shares on the date of grant. The weighted average grant date fair value of RSUs granted during the three months ended March 31, 2026 was $6.53. No RSUs were granted during the three months ended March 31, 2025.

As of March 31, 2026, there were $2.5 million of total unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the Company's 2014 and 2025 Plan. This cost is expected to be recognized over a period of approximately 3.4 years.

The number of options and RSUs outstanding as of March 31, 2026 is set forth below, with options separated by range of exercise price.

Range of exercise price	Options and RSUs outstanding as of March 31, 2026	Weighted average remaining contractual life (years) (1)	Options outstanding and exercisable as of March 31, 2026	Weighted average remaining contractual life (years) (1)
RSUs only	107,781	-	-	-
$6.53	212,692	9.99	-	-
$8.6	18,750	9.38	-	-
$14.70	33,333	9.18

SEC Form 10-Q filed by Lifeward Ltd.