ReWalk Robotics Ltd. - 1607962

ReWalk Robotics Ltd. - 1607962 - 2023

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, 2023

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

For the transition period from _____ to ______

Commission File Number: 001-36612

ReWalk Robotics Ltd.

(Exact name of registrant as specified in charter)

Israel		Not applicable
(State or other jurisdiction of incorporation or organization)		(I.R.S. 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

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 11, 2023, the registrant had outstanding 59,570,788 ordinary shares, par value NIS 0.25 per share.

REWALK ROBOTICS LTD.

FORM 10-Q

FOR THE QUARTER ENDED MARCH 31, 2023

TABLE OF CONTENTS

		Page No.
GENERAL AND WHERE YOU CAN FIND MORE INFORMATION		ii
PART I	FINANCIAL INFORMATION	1
ITEM 1.	FINANCIAL STATEMENTS (unaudited)	1
	CONDENSED CONSOLIDATED BALANCE SHEETS - MARCH 31, 2023 AND DECEMBER 31, 2022	1
	CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 2023 AND 2022	3
	CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - MARCH 31, 2023 AND 2022	4
	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - THREE MONTHS ENDED MARCH 31, 2023 AND 2022	5
	NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	6
ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	23
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	33
ITEM 4.	CONTROLS AND PROCEDURES	33
PART II	OTHER INFORMATION	34
ITEM 1.	LEGAL PROCEEDINGS	34
ITEM 1A.	RISK FACTORS	34
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	35
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	35
ITEM 4.	MINE SAFETY DISCLOSURES	35
ITEM 5.	OTHER INFORMATION	35
ITEM 6.	EXHIBITS	36
SIGNATURES		37

Introduction 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 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 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;
•	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
•	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 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.

iii

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

REWALK ROBOTICS LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	March 31,		December 31,
	2023		2022
	(unaudited)
ASSETS

CURRENT ASSETS

Cash and cash equivalents	$	61,883	$	67,896
Trade receivable, net		532		1,036
Prepaid expenses and other current assets		1,434		649
Inventories		3,027		2,929
Total current assets		66,876		72,510

LONG-TERM ASSETS

Restricted cash and other long-term assets		692		694
Operating lease right-of-use assets		1,250		836
Property and equipment, net		160		196
Total long-term assets		2,102		1,726
Total assets	$	68,978	$	74,236

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

REWALK ROBOTICS LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	March 31,			December 31,
	2023			2022
	(unaudited)
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Current maturities of operating leases liability	$	624		$	564
Trade payables		1,781			1,950
Employees and payroll accruals		513			1,282
Deferred revenues		357			301
Other current liabilities		608			685
Total current liabilities		3,883			4,782

LONG-TERM LIABILITIES
Deferred revenues		895			890
Non-current operating leases liability		657			333
Other long-term liabilities		24			66
Total long-term liabilities		1,576			1,289

Total liabilities		5,459			6,071

COMMITMENTS AND CONTINGENT LIABILITIES
Shareholders’ equity:

Share capital
Ordinary share of NIS 0.25 par value-Authorized: 120,000,000 shares at March 31, 2023 and December 31, 2022; Issued: 63,145,562 and 63,023,506 shares at March 31, 2023 and December 31, 2022, respectively; Outstanding: 59,482,004 and 60,090,298 shares as of March 31, 2023 and December 31, 2022 respectively		4,445			4,489
Additional paid-in capital		280,152			279,857
Treasury Shares at cost, 3,663,558 and 2,933,208 ordinary shares at March 31, 2023 and December 31, 2022 respectively		(3,007	)		(2,431	)
Accumulated deficit		(218,071	)		(213,750	)
Total shareholders’ equity		63,519			68,165
Total liabilities and shareholders’ equity	$	68,978		$	74,236

The accompanying notes are an integral part of these condensed 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 March 31,
	2023			2022
Revenues	$	1,230		$	876
Cost of revenues		659			611

Gross profit		571			265

Operating expenses:
Research and development, net		752			907
Sales and marketing		2,484			2,184
General and administrative		1,710			1,462

Total operating expenses		4,946			4,553

Operating loss		(4,375	)		(4,288	)
Financial expenses (income), net		(78	)		24

Loss before income taxes		(4,297	)		(4,312	)
Taxes on income		24			38

Net loss	$	(4,321	)	$	(4,350	)

Net loss per ordinary share, basic and diluted	$	(0.07	)	$	(0.07	)

Weighted average number of shares used in computing net loss per ordinary share, basic and diluted		59,515,524			62,493,496

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)

(In thousands, except share data)

	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		-		-		153			-			-			153
Issuance of ordinary shares upon vesting of employees and non-employees RSUs		28,354		2		(2	)		-			-			-
Net loss		-		-		-			-			(4,350	)		(4,350	)
Balance as of March 31, 2022		62,508,517		4,663		279,054			-			(198,531	)		85,186

Balance as of December 31, 2022		60,090,298		4,489		279,857			(2,431	)		(213,750	)		68,165
Share-based compensation to employees and non-employees		-		-

SEC Form 10-Q filed by ReWalk Robotics Ltd.