Lifeward Ltd.
For the period ended Dec 31, 2025. Filed Mar 18, 2026.
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FY2025 · Filed Mar 18, 2026
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Report of Independent Registered Public Accounting Firm
| Kost Forer Gabbay & Kasierer Menachem Begin 144, Tel-Aviv 6492102, Israel | Tel: +972-3-6232525 Fax: +972-2-5622555 ey.com |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of
LIFEWARD LTD.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Lifeward Ltd. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, changes is shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
The Company's Ability to Continue as a Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1e to the financial statements, the Company has suffered recurring losses from operations, has negative cash flows from operating activities, and has stated that substantial doubt exists about the Company’s ability to continue as a going concern. Management's evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 1e. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
F - 2
| Revenue recognition | |
| Description of the Matter | As described in Note 2 of the consolidated financial statements, the Company recognizes revenues from the sale of its products at a point in time based on the consideration to which the company is entitled to in exchange for sales of its products. The Company estimates the amount of variable consideration that is included in the transaction price mainly by estimating claims reimbursement by the Centers for Medicare & Medicaid Services (CMS), which is based primarily on actual historical collection experience from CMS. Auditing the Company’s measurement of variable consideration involved challenging judgment because the calculation includes uncertainty and subjective management assumptions that were required to evaluate the transaction price adjustments. |
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| How We Addressed the Matter in Our Audit | To test the estimate of variable consideration, our audit procedures included, evaluating the methodology used and testing the underlying data used by management in its analysis, performing independent recalculation of management's estimate and evaluating the historical accuracy by comparing such estimates to subsequent actual results. We assessed the historical accuracy of management’s estimate and performed sensitivity analyses to evaluate the changes in variable consideration that would result from changes in the expected collection rates used and the corresponding effect on revenues. |
| Goodwill Impairment | |
| Description of the Matter | As discussed in Note 2 to the consolidated financial statements, goodwill is tested by the Company’s management for impairment at the reporting unit level at least annually, unless there are indications of impairment at other points throughout the year. During the year ended December 31, 2025, the Company recorded goodwill impairment charges of $2.8 million as it was determined that the fair value of its reporting unit was less than its carrying value. As of December 31, 2025, the goodwill balance was $4.7 million. We identified the valuation of goodwill for the Company’s reporting unit as a critical audit matter because of the significant judgments made by management to estimate the fair value of the reporting unit. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s judgments and estimates related to the estimated control premium. |
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| How We Addressed the Matter in Our Audit | To test the fair value of the reporting unit, our audit procedures included, among other, testing the completeness and accuracy of underlying data used in the estimate of the control premium; and evaluating the significant assumptions used by management in developing the control premium estimate. With the assistance of our fair value specialists, we evaluated the reasonableness of the Company’s control premium by comparing it to data from publicly available premium studies for public company transactions. |
/S/KOST FORER GABBAY & KASIERER
A Member of EY Global
We have served as the Company’s auditor since 2014.
Tel-Aviv, Israel
March 18, 2026
F - 3
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