Business Overview and History

Lifeward Ltd. (LFWD) is a global leader in the medical technology sector, dedicated to transforming the lives of individuals with physical limitations or disabilities. Founded in 2001 and headquartered in Yokneam, Israel, the company has established itself as a pioneer in developing groundbreaking solutions that span the continuum of care in physical rehabilitation and recovery.

Lifeward's journey began in 2001 when it was incorporated under the name Argo Medical Technologies Ltd. The company's initial focus was on developing robotic exoskeletons for individuals with spinal cord injuries. These devices, known as the ReWalk Personal and ReWalk Rehabilitation Exoskeleton, utilize Lifeward's patented tilt-sensor technology and onboard computer systems to power motorized legs, enabling users to stand and walk again during everyday activities.

In 2014, the company rebranded to ReWalk Robotics Ltd. and went public on the Nasdaq Global Market. This marked a significant milestone in the company's growth and provided additional resources for research and development.

Seeking to diversify its product offerings beyond the SCI (Spinal Cord Injury) market, Lifeward expanded into stroke rehabilitation. In 2019, the company began commercializing the ReStore Exo-Suit, a powered lightweight soft exo-suit designed for use during the rehabilitation of individuals with lower limb disabilities due to stroke.

Further expanding its product portfolio, Lifeward signed agreements in 2020 to distribute additional product lines in the United States. Although one of these agreements was later discontinued, the company successfully became the exclusive distributor of MYOLYN's MyoCycle FES Pro and Home cycles.

In August 2023, Lifeward made a strategic acquisition, purchasing AlterG, Inc., a leading provider of anti-gravity systems for use in physical and neurological rehabilitation. The AlterG Anti-Gravity systems, which employ patented NASA-derived Differential Air Pressure (DAP) technology, have been utilized in over 4,000 facilities globally across more than 40 countries.

In January 2024, the company underwent another rebranding, this time to Lifeward Ltd., to better reflect its expanded mission and portfolio of life-changing solutions. Throughout its history, Lifeward has faced various challenges, including securing reimbursement coverage from third-party payors and the need for continuous investment in research and development to enhance its product offerings. Despite these obstacles, the company has made significant progress in advancing its technologies and expanding access to its medical devices.

Financials and Performance

For the fiscal year ended December 31, 2024, Lifeward reported record revenue of $25.7 million, an 85% increase from the previous year's $13.85 million. This impressive growth was driven by strong performance across the company's product lines, particularly the AlterG Anti-Gravity systems and the ReWalk Personal Exoskeleton. The fourth quarter of 2024 saw revenue of $7.5 million, a 9.2% increase from $6.9 million in Q4 2023.

The company's gross profit margin for the full year 2024 stood at 32.0%, consistent with the prior year. The non-GAAP adjusted gross margin for Q4 2024 was 45.4%, slightly below expectations due to product mix, compared to 46.9% in Q4 2023. While the gross margin remained steady, Lifeward's focus on operational efficiency and cost optimization has been a key priority, as evidenced by its Sustainable Growth Plan implemented in 2025.

Lifeward's net loss for 2024 was $28.9 million, compared to a net loss of $22.1 million in 2023. The Q4 2024 net loss was $15.3 million. The company's non-GAAP adjusted operating loss for Q4 2024 improved to $3.3 million from $3.8 million in Q4 2023.

Operating cash flow and free cash flow for the full year 2024 were both negative $21.7 million. The company generates the majority of its revenue from the United States and Europe, with some lesser sales in Asia, the Middle East, and South America.

Liquidity

As of December 31, 2024, Lifeward reported cash and cash equivalents of $6.7 million. The company's current ratio stands at 2.08, while its quick ratio is 1.43, indicating a relatively healthy short-term liquidity position. Notably, Lifeward has no debt, resulting in a debt-to-equity ratio of 0.

Following the end of the fiscal year, the company raised an additional $5 million through a registered direct offering, bolstering its financial position. While Lifeward has an available credit facility, specific details were not provided.

It is worth noting that Lifeward's auditors have included a going concern qualification in the company's 2024 financial statements, reflecting their assessment that the current cash position is not sufficient to fund planned operations for at least a year beyond the filing date. Lifeward has taken proactive measures to address this, including the implementation of its Sustainable Growth Plan and the exploration of various capital-raising alternatives.

Operational Highlights and Strategic Initiatives

Lifeward's impressive financial performance in 2024 was accompanied by several key operational achievements and strategic initiatives:

1. Establishment of Lump Sum Payment and Benefit Category with CMS: In the first quarter of 2024, Lifeward secured a significant milestone with the Centers for Medicare & Medicaid Services (CMS) by establishing a lump-sum payment and benefit category for its ReWalk Personal Exoskeleton. This paved the way for broader access and reimbursement for the device within the U.S. Medicare system.

2. Expansion into Workers' Compensation Market: In March 2025, Lifeward announced a partnership with CorLife, LLC, a division of Numotion, to become the exclusive distributor of the ReWalk Personal Exoskeleton for individuals with workers' compensation claims. This strategic alliance is expected to drive greater growth and penetration in the workers' compensation market, a key segment for the company.

3. Strengthened Distribution Agreement with MYOLYN: Lifeward expanded its exclusive distribution agreement with MYOLYN, Inc., the manufacturer of the MyoCycle FES Cycling Therapy System. The new arrangement grants Lifeward the rights to directly supply the MyoCycle products for home use referrals from the clinics it works with, in addition to the existing VHA and VA hospital channels.

4. Launch of AlterG NEO: In 2024, Lifeward introduced the AlterG NEO, a new, more affordable model of the AlterG Anti-Gravity system, designed to increase the accessibility of the technology across a broader range of rehabilitation clinics and training facilities.

5. Sustainable Growth Plan: Recognizing the need to balance top-line growth with improved profitability, Lifeward implemented a Sustainable Growth Plan in 2025. This strategic initiative focuses on prioritizing investments in higher-margin product lines and streamlining its cost structure, with the goal of reducing its quarterly operating loss to $1 million or less by the fourth quarter of 2025.

6. Product Development: In March 2023, Lifeward received FDA clearance for the ReWalk Personal Exoskeleton with stair and curb functionality, expanding the device's usage capabilities in real-world environments. Additionally, in June 2024, the company submitted a 510k premarket notification to the FDA for the next-generation ReWalk 7.0 model, demonstrating its ongoing commitment to product innovation.

Competitive Landscape and Risks

Lifeward operates in a competitive medical device industry, facing competition from companies such as Ekso Bionics, Rex Bionics, Cyberdyne, and others developing competing exoskeleton and rehabilitation technologies. The company's ability to maintain its market position and technological edge will be crucial to its long-term success.

Regulatory risks also pose a challenge, as Lifeward's products are subject to approval and ongoing compliance requirements from regulatory bodies like the FDA and their international counterparts. Any delays or setbacks in the regulatory process could have a significant impact on the company's operations and financial performance.

Additionally, Lifeward's reliance on third-party suppliers and contract manufacturers, as well as its geographical concentration in Israel, expose the company to potential supply chain disruptions and geopolitical risks that must be carefully managed.

Outlook and Guidance

Lifeward's performance in 2024 and its strategic initiatives for 2025 have laid the foundation for the company's continued growth and path towards profitability. For the full year 2025, Lifeward has provided the following guidance:

• Revenue is expected to be in the range of $28 million to $30 million.

• Adjusted gross margin is projected to be between 47% and 49%.
• Non-GAAP operating expenses are anticipated to be $22 million to $23 million, down from $27.5 million in 2024.
• Full-year non-GAAP operating loss is expected to be between $7 million and $9 million.
• By Q4 2025, the company anticipates the adjusted operating loss will be approximately $1 million.

The company's focus for 2025 will be on maintaining reasonable growth while equally emphasizing reducing their quarterly operating loss, with the goal of reaching an operating loss at or below $1 million in Q4 2025.

The expansion of coverage and reimbursement for its ReWalk Personal Exoskeleton, the integration of the AlterG acquisition, and the strengthening of its distribution partnerships are all key drivers of the company's future success.

However, the going concern qualification from Lifeward's auditors serves as a reminder of the challenges the company must navigate. The successful implementation of the Sustainable Growth Plan, coupled with effective capital management and execution of its strategic priorities, will be crucial for Lifeward to achieve long-term financial stability and continue its mission of transforming the lives of individuals with physical limitations or disabilities.

As Lifeward transitions to new leadership following the retirement of CEO Larry Jasinski, the company's ability to maintain its momentum and capitalize on the growing demand for its innovative solutions will be closely watched by investors and industry observers alike.