Lifeward Ltd
For the period ended Sep 30, 2024. Filed Nov 12, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 12, 2024
LFWD$5.81+1.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001178913-24-002623
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-12.
0001178913-24-003606
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 77 previous paragraphs and 81 current paragraphs.
42 unchanged; 27 reworded; 10 added; 7 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 15 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
Third Quarter 2024 Business Highlights
Current report
Our revenue for the three and nine months ended September 30, 2024 and 2023 was as follows (in thousands):
Current report
Our gross profit for the three and nine months ended September 30, 2024 and 2023 was as follows (in thousands):
Current report
Our sales and marketing expenses for the three and nine months ended September 30, 2024 and 2023 were as follows (in thousands):
Current report
Sales and marketing expenses were $4.2 million for the three months ended September 30, 2024, an increase of $0.1 million, or 2%, compared to the three months ended September 30, 2023. These expenses included amortization of intangible assets from the AlterG acquisition, amounting to $0.4 million in the third quarter of 2024 and $0.2 million in the third quarter of 2023. The remaining decrease of $0.1 million is due to a reduction in consulting expenses related to the CMS reimbursement process, partially offset by a limited consolidation of AlterG following the acquisition in August 2023.
Current report
Sales and marketing expenses totaled $13.6 million for the nine months ended September 30, 2024, reflecting an increase of $4.5 million, or 49.5%, compared to the same period in 2023. These expenses included amortization of intangible assets related to the AlterG acquisition, amounting to $1.2 million for the nine months ended September 30, 2024, compared to $0.2 million in the same period in 2023. The remaining $3.6 million increase is mainly due to higher personnel-related expenses from increased headcount following the AlterG acquisition and additional spending on promotional activities.
Current report
Our general and administrative expenses for the three and nine months ended September 30, 2024 and 2023 were as follows (in thousands):
Current report
Income taxes increased by $29 thousand, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023, mainly due to deferred taxes and timing differences in our subsidiaries.
Current report
In November 2024, we began streamlining our U.S. operations, including closing two U.S. facilities to complete the integration following the acquisition of AlterG. As a result of the organizational changes, we reduced our total headcount by greater than 35% since the closing of the AlterG acquisition. Key functions located at the affected facilities will be integrated into the operations of the Marlborough, Massachusetts facility, and manufacturing of the AlterG Anti-Gravity Systems will be assumed by Cirtronics Corporation, a nationally recognized contract manufacturer specializing in the manufacture of precision medical devices and instrumentation. We estimate that such consolidation will save the Company approximately $3 million in operating expenses and improve gross margins when the full impact is achieved, which we expect to contribute to our goal of reducing costs and achieving profitability.
Current report
Net cash used in investing activities decreased by $18.1 million, primarily due to the acquisition of AlterG that took place in 2023.
Removed paragraphs (7)
Previous report
Second Quarter 2024 Business Highlights
Previous report
Our revenue for the three and six months ended June 30, 2024 and 2023 was as follows (in thousands):
Previous report
Our gross profit for the three and six months ended June 30, 2024 and 2023 was as follows (in thousands):
Previous report
Our sales and marketing expenses for the three and six months ended June 30, 2024 and 2023 were as follows (in thousands):
Previous report
Sales and marketing expenses were $4.4 million for the three months ended June 30, 2024, an increase of $1.9 million, or 76%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. Sales and marketing expenses for the three months ended June 30, 2024 included $0.4 million of amortization of intangible assets from the acquisition of AlterG. Additional drivers of the increase include higher personnel-related expenses stemming from the increase in headcount from the AlterG acquisition and higher promotional spending.
Previous report
Sales and marketing expenses were $9.4 million for the six months ended June 30, 2024, an increase of $4.4 million, or 89%, for the six months ended June 30, 2024, compared to the six months ended June 30, 2023. Sales and marketing expenses for the six months ended June 30, 2024 included $0.8 million of amortization of intangible assets from the acquisition of AlterG. Additional drivers of the increase include higher personnel-related expenses stemming from the increase in headcount from the AlterG acquisition and higher promotional spending.
Previous report
Our general and administrative expenses for the three and six months ended June 30, 2024 and 2023 were as follows (in thousands):
Reworded paragraphs (27)
Previous wording
. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Current wording
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Previous wording
On August 11, 2023, we made our first acquisition to supplement our internal growth when we acquired AlterG, a leading provider of anti-gravity system for use in physical and neurological rehabilitation. We paid a cash purchase price of approximately $19 million at closing and additional cash earnouts (in an anticipated amount of approximately $4 million in the aggregate) may be paid based upon a percentage of AlterG’s year-over-year revenue growth over the two years following the closing. The AlterG anti-gravity systems use patented, National Aeronautics and Space Administration-derived Differential Air Pressure (“DAP”) technology to reduce the effects of gravity and allow people to rehabilitate with finely calibrated support and reduced pain. AlterG anti-gravity systems are utilized in over 4,000 facilities globally in more than 40 countries. 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.
Current wording
On August 11, 2023, we made our first acquisition to supplement our internal growth when we acquired AlterG, a leading provider of anti-gravity system for use in physical and neurological rehabilitation. We paid a cash purchase price of approximately $19 million at closing and additional cash earnouts (initially estimated to be approximately $4 million in the aggregate) may be paid based upon a percentage of AlterG’s year-over-year revenue growth over the two years following the closing. The AlterG anti-gravity systems use patented, National Aeronautics and Space Administration-derived Differential Air Pressure (“DAP”) technology to reduce the effects of gravity and allow people to rehabilitate with finely calibrated support and reduced pain. AlterG anti-gravity systems are utilized in over 4,000 facilities globally in more than 40 countries. 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.
Previous wording
Results of Operations for the Three and Six Months Ended June 30, 2024 and June 30, 2023
Current wording
Results of Operations for the Three and Nine Months Ended September 30, 2024 and September 30, 2023
Previous wording
Our operating results for the three and six months ended June 30, 2024, as compared to the same period in 2023, are presented below. The results set forth below are not necessarily indicative of the results to be expected in future periods.
Current wording
Our operating results for the three and nine months ended September 30, 2024, as compared to the same period in 2023, are presented below. The results set forth below are not necessarily indicative of the results to be expected in future periods.
Previous wording
Three and Six Months Ended June 30, 2024 Compared to Three and Six Months Ended June 30, 2023
Current wording
Three and Nine Months Ended September 30, 2024 Compared to Three and Nine Months Ended September 30, 2023
Previous wording
Revenues increased by $9.4 million for the six months ended June 30, 2024, compared to the six months ended June 30, 2023, due to the revenue contribution of AlterG following the acquisition, which was $6.4 million, combined with a higher sales volume of ReWalk Personal exoskeletons primarily from the expansion of access through Medicare coverage.
Current wording
Revenues increased by $1.7 million, or 39%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023, primarily driven by an increase in ReWalk system sold from the expansion of access through Medicare coverage, stronger sales performance in Germany and an increase in AlterG sales compared to the three months ended September 30, 2023, which had a partial quarter contribution following the closing of the acquisition in August 2023.
Previous wording
Revenues increased by $5.4 million for the three months ended June 30, 2024, compared to the three months ended June 30, 2023, due to the revenue contribution of AlterG following the acquisition which was $3.6 million, combined with a higher sales volume of ReWalk Personal exoskeletons primarily from the expansion of access through Medicare coverage.
Current wording
Revenues increased by $11.1 million for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily driven by an increase in ReWalk system sold from the expansion of access through Medicare coverage, stronger sales performance in Germany and due to the revenue contribution of AlterG following the closing of the acquisition in August 2023.
Previous wording
Gross profit was 41.1% of revenue for the three months ended June 30, 2024, compared to 43.1% for the three months ended June 30, 2023. Gross profit for the three months ended June 30, 2024 included $0.4 million for amortization of intangible assets. Excluding the impact of the amortization of intangible assets, gross profit as a percentage of revenue was 46.9% for the three months ended June 30, 2024, up 3.7 percentage points from the three months ended June 30, 2023. This increase was a result of a higher volume of ReWalk product sales, which resulted in favorable absorption of production and overhead costs.
Current wording
Gross profit was 36.2% of revenue for the three months ended September 30, 2024, compared to 19.6% for the three months ended September 30, 2023. Gross profit included amortization of intangible assets and the step-up value of inventory related to the acquisition of AlterG of $0.4 million and $1.1 million for the three months ended September 30, 2024 and 2023, respectively. Excluding the impact of the acquisition related charges, gross profit as a percentage of revenue was 42.5% for the three months ended September 30, 2024, down 2.6 percentage points from the three months ended September 30, 2023. This decrease was a result of an unfavorable absorption of production and overhead costs from lower production volume.
Previous wording
Gross profit was 34.6% of revenue for the six months ended June 30, 2024, compared to 44.7% for the six months ended June 30, 2023. Gross profit for the six months ended June 30, 2024 included $0.8 million for amortization of intangible assets. Excluding the impact of the amortization of intangible assets, gross profit as a percentage of revenue was 41.0% for the six months ended June 30, 2024, down 3.7 percentage points from the six months ended June 30, 2023. This decline was a result of a low volume of AlterG product sales in the first quarter, which resulted in adverse absorption of production and overhead costs, partially offset by volume leverage from a higher volume of ReWalk product sales.
Current wording
Gross profit was 35.2% of revenue for the nine months ended September 30, 2024, compared to 28.8% for the nine months ended September 30, 2023. Gross profit included amortization of intangible assets and the step-up value of inventory related to the acquisition of AlterG of $1.2 million and $1.1 million for the nine months ended September 30, 2024 and 2023, respectively. Excluding the impact of the acquisition related charges, gross profit as a percentage of revenue was 41.7% for the nine months ended September 30, 2024, down 3.2 percentage points from the nine months ended September 30, 2023. This decline was a result of a low volume of AlterG product sales in the first quarter, which resulted in adverse absorption of production and overhead costs, partially offset by volume leverage from a higher volume of ReWalk product sales.
Previous wording
We expect gross profit and gross profit as a percentage of revenue will increase in the future as we increase our revenue volumes and realize operating efficiencies associated with greater scale which will reduce the cost of revenue as a percentage of revenue. Improvements may be partially offset by increased material costs and costs of service.
Current wording
We expect gross profit and gross profit as a percentage of revenue will increase in the future as we increase our revenue volumes and realize operating efficiencies associated with greater scale which will reduce the cost of revenue as a percentage of revenue. Additionally, we expect gross profit as a percentage of revenue to increase as a result of the closure of our Fremont manufacturing facility at the end of 2024 and the move of production to a contract manufacturer. Improvements may be partially offset by increased material costs, shipping costs, and costs of service.
Previous wording
Our research and development expenses, net, for the three and six months ended June 30, 2024 and 2023 were as follows (in thousands):
Current wording
Our research and development expenses, net, for the three and nine months ended September 30, 2024 and 2023 were as follows (in thousands):
Previous wording
Research and development expenses were $1.2 million for the three months ended June 30, 2024, an increase of $0.4 million, or 48%, compared to the three months ended June 30, 2023. The increase is primarily attributable to the acquisition of AlterG which added investments in new product development projects.
Current wording
Research and development expenses were $0.9 million for the three months ended September 30, 2024, a decrease of $0.3 million, or 20.1%, compared to the three months ended September 30, 2023. The decrease is primarily attributable to the completion of the development program for the ReWalk 7.
Previous wording
Research and development expenses were $2.5 million for the six months ended June 30, 2024, an increase of $0.9 million or 59%, compared to the six months ended June 30, 2023. The increase is primarily attributable to the acquisition of AlterG which added investments in new product development projects.
Current wording
Research and development expenses were $3.5 million for the nine months ended September 30, 2024, an increase of $0.7 million or 23.5%, compared to the nine months ended September 30, 2023. This increase is primarily due to the acquisition of AlterG, which contributed partially following the acquisition's close in August 2023, and included investments in new product development projects. This was partially offset by lower subcontracting and consulting expenses following the completion of the ReWalk 7 development program.
Previous wording
Our sales and marketing efforts are expected to focus on driving growth in our commercial product portfolio, expanding the reimbursement coverage by commercial payors of our ReWalk Personal Exoskeleton device, and integrating and unifying the combined sales and marketing resources of the ReWalk and AlterG organizations.
Current wording
Our sales and marketing efforts are expected to focus on driving growth in our commercial product portfolio, expanding the reimbursement coverage by commercial payors of our ReWalk Personal Exoskeleton device, and expanding the commercial and clinical capabilities of the Lifeward organization.
Previous wording
General and administrative expenses were $1.6 million for the three months ended June 30, 2024, down $0.8 million, or 34%, compared to the three months ended June 30, 2023. General and administrative expenses for the three months ended June 30, 2024 included $0.1 million of amortization of intangible assets from the acquisition of AlterG and $0.5 million of income from an adjustment for the remeasurement of the earnout liability from the acquisition of AlterG. The three months ended June 30, 2024 benefited from lower professional services fees, partially offset by higher personnel-related expenses stemming from the increase in headcount from the AlterG acquisition.
Current wording
General and administrative expenses were $0.3 million for the three months ended September 30, 2024, a decrease of $3.2 million, or 93%, compared to the same period in 2023. These expenses for the three months ended September 30, 2024, included $0.1 million in amortization of intangible assets related to the AlterG acquisition and $2.0 million in income from an adjustment to remeasure the earnout liability from the AlterG acquisition. The remaining $1.2 million decrease was primarily due to a reduction of $1.3 million in M&A-related expenses, partially offset by higher personnel-related costs.
Previous wording
General and administrative expenses were $3.2 million for the six months ended June 30, 2024, down $0.9 million, or 23%, compared to the results for the six months ended June 30, 2023. General and administrative expenses for the six months ended June 30, 2024 included $0.1 million of amortization of intangible assets from the acquisition of AlterG. Additionally, the results include $0.5 million in other income from the remeasurement of the earnout liability related to the AlterG acquisition, and a further $0.5 million in other income from the post-closing statement associated with the acquisition. The six months ended June 30, 2024 reflects a decrease in professional services fees, although it was partially offset by an increase in personnel-related expenses due to the expansion in headcount following the acquisition of AlterG.
Current wording
General and administrative expenses were $3.4 million for the nine months ended September 30, 2024, a decrease of $4.2 million, or 54.8%, compared to the same period in 2023. These expenses for the nine months ended September 30, 2024, included $0.2 million in amortization of intangible assets from the AlterG acquisition, $2.5 million in other income from the remeasurement of the earnout liability related to the AlterG acquisition, and an additional $0.5 million in other income from post-closing statement adjustments associated with the acquisition. The remaining $1.4 million decrease is primarily due to a reduction of $2.3 million in M&A-related expenses, partially offset by the full nine-month contribution of AlterG expenses and higher professional services costs.
Previous wording
Our financial income, net, for the three and six months ended June 30, 2024 and 2023 were as follows (in thousands):
Current wording
Our financial income, net, for the three and nine months ended September 30, 2024 and 2023 were as follows (in thousands):
Previous wording
Financial income, net, declined by $0.4 million, or 74%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. This decrease was primarily due to yield on a lower cash balance resulting from the acquisition of AlterG.
Current wording
Financial income, net, decreased by $0.3 million, or 71%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. This decrease was primarily due to yield on a lower cash balance resulting from the funding of the growth of Lifeward over the past year.
Previous wording
Financial income, net, declined by $0.3 million, or 41%, for the six months ended June 30, 2024, compared to the six months ended June 30, 2023. This decrease was primarily due to yield on a lower cash balance resulting from the acquisition of AlterG.
Current wording
Financial income, net, decreased by $0.6 million, or 52.7%, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. This decrease was primarily due to yield on a lower cash balance resulting from the acquisition of AlterG and funding of the growth of Lifeward over the past year.
Previous wording
Our income tax for the three and six months ended June 30, 2024 and 2023 was as follows (in thousands):
Current wording
Our income tax for the three and nine months ended September 30, 2024 and 2023 was as follows (in thousands):
Previous wording
Income taxes decreased by $37 thousand, or 88%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023, mainly due to the utilization of net operation losses forward arising from the acquisition of AlterG.
Current wording
Income taxes decreased by $26 thousand, or 39.4%, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, mainly due to the utilization of net operation losses forward arising from the acquisition of AlterG.
Previous wording
During the six months ended June 30, 2024, we incurred a consolidated net loss of $10.6 million and have an accumulated deficit in the total amount of $246.5 million. Our cash and cash equivalents as of June 30, 2024, totaled $15.1 million and our negative operating cash flow for the six months ended June 30, 2024, was $13.3 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, 2024.
Current wording
During the nine months ended September 30, 2024, we incurred a consolidated net loss of $13.7 million and have an accumulated deficit in the total amount of $249.5 million. Our cash and cash equivalents as of September 30, 2024, totaled $10.7 million and our negative operating cash flow for the nine months ended September 30, 2024, was $17.7 million. We believe that 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 nine months ended September 30, 2024.
Previous wording
We expect to incur future net losses and our transition to profitability is dependent upon, among other things, the successful development and commercialization of our 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 our cost structure. If the Company will not achieve a level of revenues adequate to support its cost structure, the Company will apply reductions in its costs. Until we achieve profitability or generate positive cash flows, we will continue to need to raise additional cash from time to time.
Current wording
We expect to incur future net losses and our transition to profitability is dependent upon, among other things, the successful development and commercialization of our 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 our cost structure. If the Company does not achieve a level of revenues adequate to support its cost structure, it will implement cost reduction measures. These plans may include restructuring efforts and additional cost reductions if needed. Until we achieve profitability or generate positive cash flows, we will continue to need to raise additional cash from time to time.
Previous wording
Cash Flows for the Six Months Ended June 30, 2024 and 2023 (in thousands):
Current wording
Cash Flows for the nine Months Ended September 30, 2024 and 2023 (in thousands):
Previous wording
Net cash used in operating activities increased by $4.6 million, or 52%, for the six months ended June 30, 2024 primarily due to increase in trade receivables from the timing of Medicare payments for initial claims to be paid and increased inventory purchases for the establishment of safety stock of ReWalk systems as a result of the continuing conflict in Israel and in preparation for the future new product introduction of the ReWalk 7.
Current wording
Net cash used in operating activities increased by $1.6 million, or 9.7%, for the nine months ended September 30, 2024 primarily due to increase in trade receivables from the timing of Medicare payments for initial claims to be paid and increased inventory purchases for the establishment of safety stock of ReWalk systems as a result of the continuing conflict in Israel and in preparation for the future new product introduction of the ReWalk 7.
Previous wording
Net cash used in financing activities decreased by $1 million, or 100%, for the six months ended June 30, 2024. The decrease is due to the repurchase of our ordinary shares under our repurchase program, which expired on August 9, 2023.
Current wording
Net cash used in financing activities decreased by $1 million, or 100%, for the nine months ended September 30, 2024. The decrease is due to the repurchase of our ordinary shares under our repurchase program, which expired on August 9, 2023.
Previous wording
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 3.76: $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 €1.00: $1.07, both of which were the applicable exchange rates as of June 30, 2024.
Current wording
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 3.71: $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 €1.00: $1.12, both of which were the applicable exchange rates as of September 30, 2024.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Net Cash used in Operating Activities
Current report — wording carried from elsewhere
Net Cash used in Operating Activities
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Income taxes decreased by $55 thousand, or 83%, for the six months ended June 30, 2024, compared to the six months ended June 30, 2023, mainly due to the utilization of net operation losses forward arising from the acquisition of AlterG.