What changed in this filing

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Item 1. Financial Statements

2021-05-11 compared with 2020-11-10 · 331 added, 1121 removed, 276 unchanged (84% of the section changed)

4 unchanged sentences

(In thousands, except share and per share data)

September 30,

CURRENT ASSETS

13 unchanged sentences

(In thousands, except share and per share data)

September 30,

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES

Current maturities of long-term loans

Current maturities of operating leases

5 unchanged sentences

LONG-TERM LIABILITIES

Long-term loan, net of current maturities

Deferred revenues

7 unchanged sentences

Ordinary share of NIS 0.25 par value-Authorized:

60,000,000 shares at September 30,

2020 and December 31, 2019;

60,000,000 shares at March 31, 2021 and December 31, 2020;

Issued and outstanding:

19,158,963 and 7,319,560

shares at September 30, 2020 and December 31, 2019, respectively

46,092,577 and 25,332,225 shares at March 31, 2021 and December 31, 2020,

Additional paid-in capital

8 unchanged sentences

Three Months Ended

September 30,

Nine Months Ended

September 30,

Cost of revenues

5 unchanged sentences

Operating loss

Financial expenses, net

Financial expenses (income), net

Loss before income taxes

1 unchanged sentence

Net loss per ordinary share, basic and diluted

Weighted average number of shares used in computing

net loss per ordinary share, basic and diluted

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

(In thousands, except share data)

Ordinary Share

shareholders’

Balance as of June 30, 2019

Share-based compensation to employees and non-employees

Issuance of ordinary shares upon exercise of options to purchase ordinary shares and RSUs by employees and non-employees

Balance as of September 30, 2019

Balance as of June 30, 2020

Share-based compensation to employees and non-employees

Issuance of ordinary shares upon exercise of options to purchase ordinary shares and RSUs by employees and non-employees

Issuance of ordinary shares in a “registered direct" offering, net of issuance expenses in the amount of $ 1,019 (1)

Exercise of warrants (1)(2)

Balance as of September 30, 2020

Represents an amount lower than $1.

See Note 8f to the condensed consolidated financial statements.

See Note 8d to the condensed consolidated financial statements.

Weighted average number of shares used in computing net loss per ordinary share, basic and diluted

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

5 unchanged sentences

shareholders’

equity (deficiency)

Balance as of December 31, 2019

Share-based compensation to employees and non-employees

Issuance of ordinary shares upon exercise of options to purchase ordinary shares and RSUs by employees and non-employees

Issuance of ordinary shares in a “best efforts” offering, net of issuance expenses in the amount of $686 (1)

Exercise of pre-funded warrants and warrants (1) (2)

Issuance of ordinary shares in a “Registered Direct” offerings, net of issuance expenses in the amount of $1,125 (1)

Issuance of ordinary shares in a “Warrant exercise” agreement, net of issuance expenses in the amount of $1,019 (1)

Balance as of September 30, 2019

Issuance of ordinary shares upon exercise of options to purchase ordinary shares and restricted stock units (“RSUs”) by employees and non-employees

Issuance of ordinary shares in “best efforts” offering, net of issuance expenses in the amount of $1,056 (1)

Exercise of pre-funded warrants (1)

Balance as of March 31, 2020

Balance as of December 31, 2020

Share-based compensation to employees and non-employees

Issuance of ordinary shares upon exercise of options to purchase ordinary shares and RSUs by employees and non-employees

Issuance of ordinary shares in a “best effort” offering, net of issuance expenses in the amount of $1,056 (1)

Issuance of ordinary shares in a “registered direct" offering, net of issuance expenses in the amount of $ 1,019 (1)

Exercise of pre-funded warrants and warrants (1) (2)

Balance as of September 30, 2020

Issuance of ordinary shares upon vesting of RSUs by employees and non-employees

Issuance of ordinary shares in a private placement, net of issuance expenses in the amount of $ 3,679 (1)

Exercises of warrants (2)

Balance as of March 31, 2021

Represents an amount lower than $1.

See Note 8f to the condensed consolidated financial statements.

See Note 8d to the condensed consolidated financial statements.

See Note 7.e.

to the condensed consolidated financial statements.

See Note 7.c.

to the condensed consolidated financial statements.

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

3 unchanged sentences

(In thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash flows used in operating activities:

2 unchanged sentences

Deferred taxes

Financial expenses related to long-term loans

Changes in assets and liabilities:

3 unchanged sentences

Employees and payroll accruals

Deferred revenues and advances from customers

Deferred revenues

Operating lease liabilities and other liabilities

5 unchanged sentences

Repayment of long term loan

Proceeds from issuance of long-term debt

Issuance of ordinary shares in a “best efforts” offering, net of issuance expenses in the amount of $ 686 (1)

Issuance of ordinary shares in a “registered direct” offerings, net of issuance expenses in the amount of $1,035 (1)

Issuance of ordinary shares in a “warrant exercise” agreement, net of issuance expenses in the amount of $ 1,019 (1)

Issuance of ordinary shares in a “best efforts” offerings, net of issuance expenses paid in the amount of $ 1,044 (1)

Issuance of ordinary shares in a “registered direct” offerings, net of issuance expenses in the amount of $977 (1)

Issuance of ordinary shares in a private placement, net of issuance expenses paid in the amount of $ 3,582 (1)

Exercise of pre-funded warrants and warrants (1)(2)

4 unchanged sentences

Supplemental disclosures of non-cash flow information

“Registered direct” offerings issuance cost not yet paid (1)

Classification of other current assets to property and equipment, net

“Best efforts” offering issuance cost not yet paid (1)

Classification of inventory to property and equipment, net

Cashless exercise of pre-funded warrants (1) (2)

Initial recognition of operating lease right-of-use assets

Initial recognition of operating lease liabilities

Expenses related to offerings not yet paid (1)

Classification of other current assets to property and equipment, net

Supplemental cash flow information:

2 unchanged sentences

Total Cash, cash equivalents, and restricted cash

See Note 8f to the condensed consolidated financial statements.

See Note 8d to the condensed consolidated financial statements.

See Note 7.e.

to the condensed consolidated financial statements.

See Note 7.c.

to the condensed consolidated financial statements.

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

3 unchanged sentences

ReWalk Robotics Ltd.

(“RRL”, and together with its subsidiaries, the “Company”) was incorporated under the laws of the State of Israel on June 20, 2001 and commenced operations on

the same date.

(“RRL”, and together with its subsidiaries, the “Company”) was incorporated under the laws of the State of Israel on June 20, 2001 and commenced operations on the same date.

RRL has two wholly-owned subsidiaries:

1 unchanged sentence

(“RRI”) incorporated under the laws of Delaware on February 15, 2012 and (ii) ReWalk Robotics GMBH.

(“RRG”) incorporated

under the laws of Germany on January 14, 2013.

The Company is designing, developing and commercializing robotic exoskeletons that allow individuals with mobility impairments or other medical conditions the ability to stand and walk

The Company has developed and is continuing to commercialize the ReWalk, an exoskeleton designed for individuals with paraplegia that uses its patented tilt-sensor technology and an on-board computer and motion sensors to

drive motorized legs that power movement.

The ReWalk system consists of a light wearable brace support suit which integrates motors at the joints, rechargeable batteries, an array of sensors and a computer-based control system to power

knee and hip movement.

There are currently two types of ReWalk products:

ReWalk Personal and ReWalk Rehabilitation.

ReWalk Personal is designed for everyday use by individuals at home and in their communities and is custom-fitted for each

ReWalk Rehabilitation is designed for the clinical rehabilitation environment where it provides individuals access to valuable exercise and therapy.

Additionally, the Company developed and, in June 2019, started to commercialize the

ReStore following receipt of European Union CE mark and United States Food and Drug Administration (“FDA”).

The ReStore is a powered, lightweight soft exo-suit intended for use in the rehabilitation of individuals with lower limb

disability due to stroke.

The Company markets and sells its products directly to institutions and individuals in Germany and the United States and through third-party distributors in other markets.

In its direct markets, the Company has

established relationships with rehabilitation centers and the spinal cord injury community, and in its indirect markets, the Company’s distributors maintain these relationships.

(“RRG”) incorporated under the laws of Germany on January 14, 2013.

The Company is designing, developing, and commercializing robotic exoskeletons that allow individuals with mobility impairments or other medical conditions the ability to stand

and walk once again.

motorized legs that power movement.

The ReWalk system consists of a light wearable brace support suit which integrates motors at the joints, rechargeable batteries, an array of sensors and a computer-based control system to power knee and hip

Additionally, the Company developed and, in June 2019, started to commercialize the ReStore following receipt of European Union CE mark and United States Food and Drug Administration (“FDA”).

The ReStore is a powered, lightweight soft

exo-suit intended for use in the rehabilitation of individuals with lower limb disability due to stroke.

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 Germany and the United States, and primarily through distributors in other markets.

In its direct markets, the Company has established relationships with rehabilitation centers and the spinal cord injury community, and

in its indirect markets, the Company’s distributors maintain these relationships.

RRI markets and sells products mainly in the United States.

RRG sell the Company’s products mainly in Germany and Europe.

The company added two new product lines through distribution agreements and started commercializing them during the third quarter.

The worldwide spread of COVID-19 has resulted in a global economic slowdown and is expected to continue to disrupt general business operations until the disease is contained.

a negative impact on the Company's sales and results of operations during 2020, and the Company expects that it will continue to negatively affect its sales and results of operations but the Company is currently unable to predict the

scale and duration of that impact.

As of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require an update of its accounting estimates or judgments or

revision of the carrying value of its assets or liabilities.

During the second quarter of 2020, we finalized two separate agreements to distribute additional product lines in the U.S.

The Company will be the exclusive distributor

of the MediTouch Tutor movement biofeedback systems in the United States and will also have distribution rights for the MYOLYN MyoCycle FES cycles to U.S.

rehabilitation clinics and personal sales through the U.S.

Department of Veterans Affairs

(“VA”) hospitals.

These new products will improve our product offering to clinics as well as patients within the VA as they both have similar clinician and patient profiles.

The worldwide spread of the novel coronavirus (“COVID-19”) has resulted in a global economic slowdown and is expected to continue to disrupt general business operations until the disease is contained.

This has had a negative impact on

the Company's sales and results of operations during 2020, and the Company expects that it will continue to negatively affect its sales and results of operations as long as the pandemic impacts our direct markets in Germany and the United

States and disturbs our ability to trial new ReWalk Personal 6.0 patients and access clinics to demonstrate our rehab products.

The Company is currently unable to predict the scale and duration of that impact due to the considerable

uncertainty that still surrounds the length of time that the areas in which we operate will continue to be impacted by the measures designed to reduce and contain the spread of the virus taken on international, national and local levels.

of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require an update to the Company’s accounting estimates or judgments or revision of the carrying value of its

assets or liabilities.

This determination may change as new events occur and additional information is obtained.

Actual results could differ from our estimates and judgments, and any such

differences may be material to our financial statements.

Actual results could differ from our estimates and judgments, and any such differences may be material to our financial

As of March 31, 2021, the Company incurred a consolidated net loss of $3.1 million and has an accumulated deficit in the total amount of $184.5 million.

The Company’s

cash and cash equivalent as of March 31, 2021 totaled $67.4 million and the Company’s negative operating cash flow for the three months ended March 31, 2021 was $3.2 million.

The Company has sufficient funds to support its operations for more

than 12 months following the issuance date of our condensed consolidated unaudited financial statements for the three months ended March 31, 2021.

The Company expects 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 achievement of a level of revenues adequate to support our cost structure.

Until we achieve profitability or generate

positive cash flows, we will continue to need to raise additional cash.

We intend to fund future operations through cash on hand, additional private and/or public offerings of debt or equity securities, cash exercises of outstanding warrants

or a combination of the foregoing.

In addition, we may seek additional capital through arrangements with strategic partners or from other sources and we will continue to address our cost structure.

Notwithstanding, there can be no assurance

that we will be able to raise additional funds or achieve or sustain profitability or positive cash flows from operations.

REWALK ROBOTICS LTD.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The Company has an accumulated deficit in the total amount of approximately $179 million as of September 30, 2020 and negative cash flow from operations of $10 million, and further losses

are anticipated in the development of its business.

Those factors raise substantial doubt about the Company’s ability to continue as a going concern.

The ability to continue as a going concern is dependent upon the Company obtaining the

necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due.

The Company intends to finance operating costs over the next twelve months with existing cash on hand, continued close examination of its operating spend and

potential reduction in specific areas, and future issuances of equity and debt securities, or through a combination of the foregoing.

However, the Company will need to seek additional sources of financing if the Company requires more

funds than anticipated during the next 12 months or in later periods.

The accompanying 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.

The condensed consolidated financial statements for the three and nine months ended September 30, 2020 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.

UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2 unchanged sentences

Accounting Oversight Board for interim financial information.

Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles in the United States for complete financial

In the opinion of management, the accompanying financial statements include all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the Company’s (i) consolidated

financial position as of September 30, 2020, (ii) consolidated results of operations for the three and nine months ended September 30, 2020, (iii) consolidated statements of changes in shareholders’ equity as of September 30, 2020

and (iv) consolidated cash flows for the nine months ended September 30, 2020.

The results for the three and nine months periods ended September 30, 2020, as applicable, are not necessarily indicative of the results that may be

expected for the year ending December 31, 2020.

Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles in the United States for complete financial statements.

opinion of management, the accompanying financial statements include all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the Company's (i) condensed consolidated financial position as of March 31,

2021, (ii) condensed consolidated results of operations for the three months ended March 31, 2021, (iii) condensed consolidated statements of changes in shareholders’ equity and (iv) condensed consolidated cash flows for the three months ended March

The results for the three months periods ended March 31, 2021, as applicable, are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

REWALK ROBOTICS LTD.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

SIGNIFICANT ACCOUNTING POLICIES

2 unchanged sentences

The Company sells its products directly to end customers and through distributors.

Company sells its products to private individuals (who finance the purchases by themselves, through fundraising or reimbursement coverage from insurance companies), rehabilitation facilities and distributors.

REWALK ROBOTICS LTD.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The Company sells its products to

private individuals (who finance the purchases by themselves, through fundraising or reimbursement coverage from insurance companies), rehabilitation facilities and distributors.

Disaggregation of Revenues (in thousands)

Three Months Ended

September 30,

Nine Months Ended

September 30,

Three Months Ended March 31,

Spare parts and warranties

Total Revenues

The Company currently offer five products:

(1) ReWalk Personal, (2) ReWalk Rehabilitation, (3) ReStore, (4) MyoCycle and (5)

The Company currently offers five products:

(1) ReWalk Personal;

(2) ReWalk Rehabilitation;

(4) MyoCycle;

and (5) MediTouch.

ReWalk Personal and ReWalk Rehabilitation are units for spinal cord injuries (“SCI Products”).

SCI Products are currently

designed for everyday use by paraplegic individuals at home and in their communities, and are custom fitted for each user, as well as for use by paraplegia patients in the clinical rehabilitation environment, where they provide individuals

access to valuable exercise and therapy.

ReStore is a powered, lightweight soft exo-suit intended for use in the rehabilitation of individuals with lower limb disability

due to stroke in the clinical rehabilitation environment.

MyoCycle which uses Functional Electrical Stimulation (“FES”) technology and MediTouch tutor movement biofeedback devices

(“Distributed Products”).

The Company markets the Distributed Products in the United States for use at home or in clinic.

Units placed includes revenue from sales of SCI Products, ReStore and Distributed Products.

SCI Products are currently designed for everyday use by paraplegic individuals at

home and in their communities, and are custom fitted for each user, as well as for use by paraplegia patients in the clinical rehabilitation environment, where they provide individuals access to valuable exercise and therapy.

ReStore is a powered, lightweight soft exo-suit intended for use in the rehabilitation of individuals with lower limb disability due to stroke in the clinical rehabilitation

The MyoCycle device uses Functional Electrical Stimulation (“FES”) technology to facilitate therapeutic exercise for persons with muscle weakness or paralysis caused by

disorders like spinal cord injury, multiple sclerosis, and stroke.

The MediTouch Tutor movement biofeedback product line includes the Arm, Hand, 3D and Leg Tutor devices.

These devices are used by physical and occupational therapists to

evaluate functional tasks during rehabilitation of neurologic disorders and can also be used by patients remotely at home.

Pursuant to two separate distribution agreements entered into during the second quarter of 2020, the Company now markets both the MediTouch and MyoCyle products (together the

“Distributed Products”) in the United States for use at home or in the clinic.

Units placed includes revenue from sales or rental of SCI Products, ReStore and the Distributed Products.

For units placed, the Company recognizes revenues when it transfers control and title has passed to the customer.

placed is considered an independent, unbundled performance obligation.

The Company also offers a rent-to-purchase model in which the Company recognizes revenue ratably according to the agreed rental monthly fee.

Each unit placed is considered an independent, unbundled

performance obligation.

The Company generally does not grant a right of return for its products besides isolated cases where we than asses the likelihood of such event to occur based on our historical experience and future estimates.

The Company also

offers a rent-to-purchase model in which the Company recognizes revenue ratably according to the agreed rental monthly fee.

REWALK ROBOTICS LTD.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Spare parts and warranties

Spare parts are sold to private individuals, rehabilitation facilities and distributors.

Revenue is recognized when the Company

satisfies a performance obligation by transferring control over promised goods or services to the customer.

Each part sold is considered an independent, unbundled performance obligation.

Revenue is recognized when the Company satisfies a performance obligation by transferring control over promised goods or services to the customer.

Each part sold

is considered an independent, unbundled performance obligation.

Warranties are classified as either assurance type or service type warranty.

A warranty is considered an assurance type warranty

if it provides the consumer with assurance that the product will function as intended for a limited period of time.

In the beginning of 2018, the Company updated its service policy for SCI Products to include a five- year warranty compared to a

period of two years that were included in the past for parts and services.

A warranty is considered an assurance type warranty if it provides the consumer with assurance that

the product will function as intended for a limited period of time.

In the beginning of 2018, the Company updated its service policy for SCI Products to include a five- year warranty compared to a period of two years that were included in the

past for parts and services.

The first two years are considered as assurance type warranty and the additional period is considered an extended service arrangement, which is a service type warranty.

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

An assurance type warranty is not accounted for as

separate performance obligations under the revenue model.

A service type warranty is either sold with a unit or separately for units for which the warranty has expired.

Revenue is then

recognized ratably over the life of the warranty.

Revenue is then recognized ratably over the life of the warranty.

The ReStore device is offered with a two-year warranty which is considered as assurance type warranty.

The Distributed Products are offered with assurance type warranty ranging between one year to ten years depending on the

specific product and part.

REWALK ROBOTICS LTD.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Contract balances

September 30,

The Distributed Products are offered with an assurance-type warranty that is covered by the vendor ranging from one year to ten years depending on the specific product and

Contract balances (in thousands)

Trade receivable, net (1)

1 unchanged sentence

Balance presented net of unrecognized revenues that were not yet collected.

$345 thousand of December 31, 2019 deferred revenues balance were recognized as revenues during the nine months ended

September 30, 2020.

Deferred revenue is comprised mainly of unearned revenue related to service type warranty but also includes other offerings for

which the Company has been paid in advance and earns revenue when the Company transfers control of the product or service.

The Company’s unfilled performance obligations as of September 30, 2020 and the estimated revenue expected to be recognized in the

future related to the service type warranty amounts to $1,088 thousand, which is fulfilled over one to five years.

New Accounting Pronouncements

Recent Accounting Pronouncements Not Yet Adopted

In June 2016, the FASB issued ASU No.

2016-13, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments and subsequent amendments to the

initial guidance under ASU 2018-19, ASU 2019-04 and ASU 2019-05, which amends the current approach to estimate credit losses on certain financial assets, including trade and other receivables.

Generally, this amendment requires entities

to establish a valuation allowance for the expected lifetime losses of these certain financial assets.

Upon the initial recognition of such assets, which will be based on, among other things, historical information, current conditions,

and reasonable supportable forecasts.

Subsequent changes in the valuation allowance are recorded in current earnings and reversal of previous losses are permitted.

Currently, U.S.

GAAP requires entities to write down credit losses only

when losses are probable and loss reversals are not permitted.

Originally, ASU 2016-13 was effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted.

entity should apply the standard by recording a cumulative effect adjustment to retained earnings upon adoption.

In November 2019, FASB issued ASU No.

2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging

(Topic 815), and Leases (Topic 842).

This ASU defers the effective date of ASU 2016-13 for public companies that are considered smaller reporting companies as defined by the SEC to fiscal years beginning after December 15, 2022,

including interim periods within those fiscal years.

The Company is planning to adopt this standard in the first quarter of fiscal 2023.

The adoption of this standard is not expected to result in a material impact to the Company’s

financial statements.

During the three months ended March 31, 2021, $191 thousand of the December 31, 2020 deferred revenues balance was recognized as revenues.

Deferred revenue is comprised mainly of unearned revenue related to service type warranty but also includes other offerings for which the Company has been paid in advance and

earns revenue when the Company transfers control of the product or service.

The Company’s unfilled performance obligations as of March 31, 2021 and the estimated revenue expected to be recognized in the future related to the service type warranty

amounts to $1,097 thousand, which is fulfilled over one to five years.

REWALK ROBOTICS LTD.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, which

simplifies the guidance on the issuer’s accounting for convertible debt instruments by removing the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial

conversion feature.

As a result, entities will not separately present in equity an embedded conversion feature in such debt.

Instead, they will account for a convertible debt instrument wholly as debt, unless certain other

conditions are met.

The elimination of these models will reduce reported interest expense and increase reported net income for entities that have issued a convertible instrument that was within the scope of those models before the

adoption of ASU 2020-06.

ASU 2020-06 also requires that the effect of potential share settlement be included in the diluted EPS calculation when an instrument may be settled in cash or share.

This amendment removes current guidance

that allows an entity to rebut this presumption if it has a history or policy of cash settlement.

Furthermore, ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share, the treasury

stock method will be no longer available.

In addition, ASU 2020-06 clarifies that an average market price should be used to calculate the diluted EPS denominator in cases in which the exercise prices may change on the basis of an

entity’s share price or changes in the entity’s share price may affect the number of shares that may be used to settle a financial instrument and that an entity should use the weighted-average share count from each quarter when

calculating the year-to-date weighted-average share.

The provisions of ASU 2020-06 are applicable for fiscal years beginning after December 15, 2021, with early adoption permitted no earlier than fiscal years beginning after

December 15, 2020.

The Company is currently evaluating the impact of ASU 2020-06 on its consolidated financial statements.

New Accounting Pronouncements

Recent Accounting Pronouncements Not Yet Adopted

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity

In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU

2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity.

Among other changes, ASU 2020-06 removes from

GAAP the liability and equity separation model for convertible instruments with a cash conversion feature and a beneficial conversion feature, and as a result, after adoption, entities will no longer separately present in equity an embedded

conversion feature for such debt.

Similarly, the embedded conversion feature will no longer be amortized into income as interest expense over the life of the instrument.

Instead, entities will account for a convertible debt instrument wholly as

debt unless (1) a convertible instrument contains features that require bifurcation as a derivative under ASC Topic 815, Derivatives and Hedging, or (2) a convertible debt instrument was issued at a substantial premium.

Additionally, ASU 2020-06

requires the application of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share (“EPS”).

ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, with early adoption

permitted for fiscal years beginning after December 15, 2020 and can be adopted on either a fully retrospective or modified retrospective basis.

The adoption of this standard is not expected to result in a material impact to the Company’s financial

Financial Instruments

In June 2016, FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments.

ASU 2016-13 amends the impairment

model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in the more timely recognition of losses.

Topic 326 will be effective on the Company beginning on January 1, 2023.

is currently evaluating the impact of this new standard on its financial statements.

Concentrations of Credit Risks:

Concentration of credit risk with respect to trade receivable is primarily limited to a customer to which the Company makes substantial sales.

September 30,

The below table reflects the

concentration of credit risk for the Company’s current customers as of the quarter ended March 31, 2021, to which substantial sales were made:

*) Less than 10%

The Company’s trade receivables are geographically diversified and derived primarily from sales to customers in various countries, mainly in the United States and Europe.

Concentration of credit

risk with respect to trade receivables is limited by credit limits, ongoing credit evaluation and account monitoring procedures.

The Company performs ongoing credit evaluations of its distributors based upon a specific review

of all significant outstanding invoices.

Concentration of credit risk with respect to trade receivables is limited by credit limits, ongoing credit evaluation and account monitoring procedures.

The Company performs ongoing credit evaluations of its distributors based upon a specific

review of all significant outstanding invoices.

The Company writes off receivables when they are deemed uncollectible and having exhausted all collection efforts.

As of September 30, 2020 and December 31, 2019, trade receivables are

presented net of allowance for doubtful accounts in the amount of $31 thousand and $31 thousand, respectively, and net of sales return reserve $0 as of September 30, 2020 and $86 thousand as of December 31, 2019.

As of March 31, 2021 and December 31, 2020 trade receivables are presented net of

allowance for doubtful accounts in the amount of $101 thousand and $102 thousand, respectively.

REWALK ROBOTICS LTD.

3 unchanged sentences

The Company provided a two-year standard warranty for its products.

In the beginning of 2018, we updated our service policy for new devices

sold to include five-year warranties.

The Company determined that the first two years of warranty is an assurance-type warranty and records a provision for the estimated cost to repair or replace products under warranty at the time of

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

As of 2018, our service policy for new devices sold includes five-year warranties.

The Company determined that the first two

years of warranty is an assurance-type warranty and 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.

Balance at December 31, 2020

Balance at September 30, 2020

Balance at March 31, 2021

Basic and diluted net loss per ordinary share:

Basic net loss per ordinary share is computed based on the weighted average number of ordinary shares outstanding during each year.

The total number of ordinary shares related to the outstanding warrants aggregated to 10,550,625, was excluded from the

calculations of diluted loss per ordinary share since it would have an anti-dilutive effect.

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

September 30,

Finished products

Raw materials

In the three months ended March 31, 2021 and 2020, the Company wrote off inventory in the amount of $38 and $1 thousand, respectively.

The write off

inventory were recorded in cost of revenue.

REWALK ROBOTICS LTD.

4 unchanged sentences

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 September 30, 2020, non-cancelable outstanding obligations to the Company’s contract manufacturer and raw material vendors amounted to

approximately $0.9 million.

Purchase obligations do not include

contracts that may be canceled without penalty.

As of March 31, 2021, non-cancelable outstanding obligations amounted to approximately $1.2 million.

Operating lease commitment:

1 unchanged sentence

These leases expire between 2021 and 2023.

A portion of our facilities leases is generally subject to

annual changes in the Consumer Price Index (CPI).

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.

RRL and RRG lease cars for their employees under cancelable operating lease agreements expiring at various dates in between 2021 and 2023.

A subset of our cars leases is considered

The variable lease payments for such cars leases are based on actual mileage incurred at the stated contractual rate.

RRL and RRG have an option to be released from these agreements, which may result in penalties in a maximum

amount of approximately $23 thousand as of September 30, 2020.

The Company’s future lease payments for its facilities and cars, which are presented as current maturities of operating leases and

non-current operating leases liabilities on the Company’s condensed consolidated balance sheets as of September 30, 2020 are as follows (in thousands):

A subset of the Company’s cars leases is considered variable.

The variable lease payments for such

cars leases are based on actual mileage incurred at the stated contractual rate.

RRL and RRG have an option to be released from these agreements, which may result in penalties in a maximum amount of approximately $23 thousand as of March 31,

The Company's future lease payments for its facilities and cars, which are presented as current maturities of operating leases and non-current operating leases liabilities on

the Company's condensed consolidated balance sheets as of March 31, 2021 are as follows (in thousands):

Total lease payments

5 unchanged sentences

Weighted-average discount rate

Lease expense under the Company’s operating leases were $178 thousand and $185 thousand for the three months ended September 30,

2020 and 2019, respectively.

For the nine months ended September 30, 2020 and 2019 the lease expense were $553 thousand and $560 thousand, respectively.

Lease expense under the Company’s operating leases was $186 and $183 for the three months ended March 31, 2021 and 2020, respectively.

The Company’s research and development efforts are financed, in part, through funding from the Israel Innovation Authority (the “IIA”) and the Israel-U.S.

Binational Industrial Research and

Development Foundation (“BIRD”).

Since the Company’s inception through March 31, 2021, the Company received funding from the IIA and BIRD in the total amount of $1.97 million and $500 thousand, respectively.

Out of the $1.97 million in funding from

the IIA, a total amount of $1.57 million were royalty-bearing grants (as of March 31, 2021, the Company paid royalties to the IIA in the total amount of $99 thousand), while a total amount of $400 thousand was received in consideration of 209

convertible preferred A shares, which were converted after the Company’s initial public offering in September 2014 into ordinary shares in a conversion ratio of 1 to 1.

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.

REWALK ROBOTICS LTD.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The Company’s research and development efforts are financed, in part, through funding from the IIA and BIRD.

Since the Company’s inception

through September 30, 2020, the Company received funding from the IIA and BIRD in the total amount of $1.97 million and $500 thousand, respectively.

Out of the $1.97 million in funding from the IIA, a total amount of $1.57 million were

royalty bearing grants (as of September 30, 2020, the Company paid royalties to the IIA in the total amount of $92 thousand), while a total amount of $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.

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 LIBOR 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.

Additionally, the License Agreement requires the Company to pay Harvard royalties on net sales, See note 7 below for more information about

the Collaboration Agreement and the License Agreement.

Royalties expenses in cost of revenue were $2 and $8 thousand for the three months ended September 30, 2020 and 2019, respectively.

nine months ended September 30, 2020 and 2019, the royalties expenses were $5 thousand and $13 thousand, respectively.

As of September 30, 2020, 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 research and development 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.

As discussed in Note 6 to the Company’s audited consolidated financial statements in its annual report on Form 10-K for the fiscal year ended

December 31, 2019 (the “2019 Form 10-K”), the Company is party to a loan agreement, as amended (the “Loan Agreement”), with Kreos Capital V (Expert Fund) Limited (“Kreos”), pursuant to which Kreos extended a $20 million line of credit

to the Company.

In connection with the Loan Agreement, the Company granted Kreos a first priority security interest over all of its assets, including intellectual property and equity interests in its subsidiaries, subject to certain

permitted security interests

The Company’s other long-term assets in the amount of $686 thousand have been pledged to third parties as a security in respect to lease agreements.

cannot be pledged to others or withdrawn without the consent of such third party.

REWALK ROBOTICS LTD.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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.

Additionally, the Exclusive License Agreement between the Company and Harvard requires the Company to pay Harvard royalties on net sales.

See note 6 below for more information

about the Collaboration Agreement and the License Agreement.

Royalty expenses in cost of revenue were $0 and $3 thousand for the three months ended March 31, 2021 and 2020, respectively.

As of March 31, 2021, 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 research and development 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;

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.

As part of the Company’s other long-term assets and restricted cash, an amount of $697 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, lawsuits, regulatory examinations, investigations and other legal matters arising,

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.

The outcome of litigation and other legal matters is inherently uncertain.

In making a determination regarding accruals, using available information, the Company evaluates the

likelihood of an unfavorable outcome in legal or regulatory proceedings to which the Company is a party and records a loss contingency when it is probable a liability has been incurred and the amount of the loss can be reasonably

Where the Company determines an unfavorable outcome is not probable or reasonably estimable, the Company does not accrue for any potential litigation loss.

These subjective determinations are based on the status of such legal

or regulatory proceedings, the merits of the company's defenses and consultation with legal counsel.

Actual outcomes of these legal and regulatory proceedings may materially differ from the Company’s current estimates.

It is possible

that resolution of one or more of the legal matters currently pending or threatened could result in losses material to the Company’s consolidated results of operations, liquidity or financial condition.

As previously disclosed, between September 2016 and January 2017, eight putative class actions on behalf of alleged shareholders that purchased or acquired the Company ordinary shares pursuant and/or

traceable to its registration statement on Form F-1 (File No.

333-197344) used in connection with the initial public offering, or the Company’s IPO, were commenced in the following courts:

(i) the Superior Court of the State of

California, County of San Mateo;

(ii) the Superior Court of the Commonwealth of Massachusetts, Suffolk County;

(iii) the United States District Court for the Northern District of California;

and (iv) the United States District Court

for the District of Massachusetts.

As of March 31, 2020, all complaints have been dismissed, with one dismissal affirmed on appeal.

The actions involved or involve claims under various sections of the Securities Act of 1933, or the

Securities Act, against the Company, certain of its current and former directors and officers, the underwriters of the Company’s IPO and certain other defendants.

The four actions commenced in the Superior Court of the State of California, County of San Mateo were dismissed in January 2017 for lack of

personal jurisdiction, and the action commenced in the United States District Court for the Northern District of California was voluntarily dismissed in March 2017.

Additionally, the two actions commenced in the Superior Court of the

Commonwealth of Massachusetts, Suffolk County, or the Superior Court, were consolidated in December 2017, and voluntarily dismissed with prejudice in November 2018, after the District Court for the District of Massachusetts partially

dismissed the related claims in that court and the parties in the Superior Court entered a stipulation of dismissal with prejudice.

The action commenced in the United States District Court for the District of Massachusetts (the “District Court”), alleging violations of Sections 11 and 15 of the Securities Act and Sections 10(b) and

20(a) of the Exchange Act, was partially dismissed on August 23, 2018.

In particular, the District Court granted the motion to dismiss the claims under Sections 11 and 15 of the Securities Act, finding that the plaintiff failed to

plead a false or misleading statement in the IPO registration statement.

The District Court did not address the claims under Sections 10(b) and 20(a) of the Exchange Act because, as a result of the dismissal of the claims under the

Securities Act, the lead plaintiff lacked standing to pursue those claims.

Because the action in the District Court was styled as a class action, the District Court permitted the plaintiff to file a supplemental memorandum concerning

standing or a motion to appoint a substitute or supplemental plaintiff.

On September 10, 2018, the plaintiff sought leave to amend his complaint to add a new plaintiff that purportedly has standing to pursue Exchange Act claims, and

the Company opposed the motion to amend on September 24, 2018.

On May 16, 2019, the court denied the plaintiff’s motion to amend and the complaint was dismissed.

Thereafter, the plaintiff timely appealed to the United States Court of

Appeals for the First Circuit (the “First Circuit”).

The appeal was fully briefed in January 2020 and the court held oral arguments on March 2, 2020.

On August 25, the First Circuit affirmed the dismissal and the denial of the

plaintiff’s motion to amend.

The plaintiff’s deadline to file a petition for certiorari for appeal of the case to the Supreme Court of the United States is November 24, 2020.

Based on information currently available and the current stage of the litigation, the Company is unable to reasonably estimate a possible loss or range of possible losses, if any, with regard to the

remaining lawsuit in the District Court;

therefore, no litigation reserve has been recorded in the Company’s condensed consolidated balance sheets as of September 30, 2020.The Company will continue to evaluate information as it

becomes known and will record an estimate for losses at the time or times if and when it is probable that a loss will be incurred and the amount of the loss is reasonably estimable.

REWALK ROBOTICS LTD.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

PAYCHECK PROTECTION PROGRAM LOAN

On April 21, 2020, RRI entered into a loan (the “PPP Loan”) with Silicon Valley Bank (the “Lender”) evidencing an unsecured promissory note in the amount of $392 thousand

(the “PPP Note”) pursuant to the Paycheck Protection Program (the “PPP”) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Subject to the terms of the PPP Note, the PPP Loan bears interest at a fixed rate of 1% per year, with

the first six months of interest deferred, and has an initial term of two years.

The PPP Loan is unsecured and guaranteed by the Small Business Administration.

The PPP Loan may be used for payroll costs, costs related to certain group health care benefits and insurance premiums, rent payments, utility payments, mortgage interest

payments and interest payments on any other debt obligation that were incurred before February 15, 2020.

PPP loan recipients can apply for and be granted forgiveness for all or a portion of loan granted under the PPP, with such forgiveness to

be determined, subject to limitations, based on the use of the loan proceeds for payment of payroll costs and any payments of mortgage interest, rent, and utilities.

The terms of any forgiveness may also be subject to further requirements in

any regulations and guidelines the Small Business Administration may adopt.

On September 29, 2020, the Company submitted an application for loan forgiveness to the Small Business Administration.

The PPP Note provides for customary events of default including, among other things, cross-defaults on any other loan with the Lender.

The PPP Loan may be accelerated upon

the occurrence of an event of default.

The follow table presents the scheduled principal payments of the Company's PPP Loan payable as of September 30, 2020, shown if the PPP Loan is not forgiven:

Remainder of 2020

Total principal payments

Current portion

Long-term portion

Note payable, net

It is possible that resolution of one or more of the legal matters currently pending or threatened could result in losses material to the Company’s consolidated results of operations,

liquidity, or financial condition.

While the outcome of any pending or threatened litigation and other legal matters is inherently uncertain, the Company is not currently party to any material litigation.

REWALK ROBOTICS LTD.

3 unchanged sentences

On May 16, 2016, the Company entered into a Research Collaboration Agreement and an Exclusive License Agreement with Harvard.

The Research Collaboration Agreement was

amended on May 1, 2017 and April 1, 2018 (as amended, the “Collaboration Agreement”), and the Exclusive License Agreement was amended on April 1, 2018 (as amended, the “License Agreement”), to extend the term of the Collaboration Agreement by

one year to May 16, 2022 and reallocate the Company’s quarterly installment payments to Harvard through such date, and to make certain technical changes.

On April 30, 2020, the Company and Harvard amended the Collaboration Agreement, which

included certain adjustments to the quarterly installments and extended the term an additional three quarters until February 2023.

The Research Collaboration Agreement was amended on

May 1, 2017 and April 1, 2018 (as amended, the “Collaboration Agreement”), and the Exclusive License Agreement was amended on April 1, 2018 (as amended, the “License Agreement”), to extend the term of the Collaboration Agreement by one year to May

16, 2022 and reallocate the Company’s quarterly installment payments to Harvard through such date, and to make certain technical changes.

On April 30, 2020, the Company and Harvard amended the Collaboration Agreement, which included certain

adjustments to the quarterly installments and extended the term an additional three quarters until February 16, 2023, when it will expire.

Under the Collaboration Agreement, Harvard and the Company have agreed to collaborate on research regarding the development of lightweight “soft suit” exoskeleton system

technologies for lower limb disabilities, which are intended to treat stroke, multiple sclerosis, mobility limitations for the elderly and other medical applications.

The Company has committed to pay in quarterly installments for the funding of

this research, subject to a minimum funding commitment under applicable circumstances.

Under the Harvard License Agreement, Harvard has granted the Company an exclusive, worldwide royalty-bearing license under certain patents of Harvard relating to lightweight

“soft suit” exoskeleton system technologies for lower limb disabilities, a royalty-free license under certain related know-how and the option to obtain a license under certain inventions conceived under the joint research collaboration.

The Harvard License Agreement requires the Company to pay Harvard an upfront fee, reimbursements for expenses that Harvard incurred in connection with the licensed patents,

royalties on net sales and several milestone payments contingent upon the achievement of certain product development and commercialization milestones.

The Harvard License Agreement will continue in full force and effect until the expiration of

the last-to-expire valid claim of the licensed patents.

As of September 30, 2020, the company achieved the three development milestones.

The Company continues to evaluate the likelihood that the other milestones will be achieved on a quarterly

The Company’s total payment obligation under the Collaboration Agreement and the License Agreement is $7.2 million on the date the agreement were signed, some of which is

subject to a minimum funding commitment under applicable circumstances as indicated above.

The Company has recorded expenses in the amount of $175 thousand and $599 thousand which are part of the total payment obligation indicated above, as research and development expenses related to

the License Agreement and to the Collaboration Agreement for the three and nine months ended September 30, 2020, respectively.

No withholding tax was deducted from the Company’s payments to Harvard in respect of the Collaboration Agreement and

the License Agreement since this is not taxable income in Israel in accordance with Section 170 of the Israel Income Tax Ordinance 1961-5721.

The Company has committed to paying for the funding of this research in quarterly

installments, subject to a minimum funding commitment under applicable circumstances.

The Collaboration Agreement will expire on February 16, 2023.

Under the License Agreement, Harvard has granted the Company an exclusive, worldwide, royalty-bearing license under certain patents of Harvard relating to lightweight “soft

suit” exoskeleton system technologies for lower limb disabilities, a royalty-free license under certain related know-how and the option to obtain a license under certain inventions conceived under the joint research collaboration.

Agreement will continue in full force and effect until the expiration of the last-to-expire valid claim of the licensed patents.

The Company’s total payment obligation under the Collaboration Agreement and the Harvard License Agreement was $7.2 million as of the initial date, some of which was subject to

a minimum funding commitment under applicable circumstances as indicated above which were all completed as of March 31, 2021.

The Company has recorded expenses in the amount of $159 thousand and $222 thousand as research and development expenses related to the License Agreement and to the

Collaboration Agreement for the three months ended March 31, 2021, and 2020, respectively.

No withholding tax was deducted from the Company’s payments to Harvard in respect of the Collaboration Agreement and the License Agreement since this is not

taxable income in Israel in accordance with Section 170 of the Israel Income Tax Ordinance 1961-5721.

REWALK ROBOTICS LTD.

2 unchanged sentences

SHAREHOLDERS’ EQUITY

Reverse share split:

On March 27, 2019, the Company’s shareholders approved (i) a reverse share split within a range of 1:8 to 1:32, to be effective at the ratio

and on a date to be determined by the Board of Directors, and (ii) amendments to the Company’s Articles of Association authorizing an increase in the Company’s authorized share capital (and corresponding authorized number of ordinary

shares, proportionally adjusting such number for the reverse share split) by up to NIS 17.5 million.

Following the shareholder approval, an authorized committee of the Board of Directors of the Company approved a one-for-twenty-five

reverse share split of the Company’s ordinary shares, and the Company filed the Third Amended and Restated Articles of Association of the Company with the Registrar of Companies of the State of Israel to effect the reverse share split

and to increase the Company’s authorized share capital after the effect of the reverse share split.

The reverse share split became effective on April 1, 2019.

Additionally, effective at the same time, the total number of ordinary shares

the Company is authorized to issue changed from 250,000,000 shares to 60,000,000 shares, the par value per share of the ordinary shares changed to NIS 0.25 and the authorized share capital of the Company changed from NIS 2,500,000 to

NIS 15,000,000.

All share and per share data included in these condensed consolidated financial statements, for periods before the three months ended June 30, 2019, give retroactive effect to the reverse stock split.

Upon the effectiveness of the reverse share split, every twenty-five shares were automatically combined and converted into one ordinary

Appropriate adjustments were also made to all outstanding derivative securities of the Company, including all outstanding equity awards and warrants.

No fractional shares were issued in connection with the reverse share split.

Instead, all fractional shares (including shares underlying

outstanding equity awards and warrants) were rounded down to the nearest whole number.

Share option plans:

As of September 30, 2020, and December 31, 2019, the Company had reserved 623,408 and 12,409 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 2014 Incentive Compensation Plan (the “2014 Plan”).

As of March 31, 2021, and December 31, 2020, the Company had reserved 668,944 and 604,320 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 2014 Incentive Compensation Plan (the “2014 Plan”).

Options to purchase ordinary shares generally vest over four years, with certain options to non-employee directors vesting quarterly over one year.

that is forfeited or canceled before expiration becomes available for future grants under the 2014 Plan.

The fair value for options granted during the nine months ended September 30, 2019 was estimated at the date of the grant using a Black-Scholes-Merton option

pricing model with the following assumptions:

Nine Months Ended

September 30,

Expected volatility

Risk-free rate

Dividend yield

Expected term (in years)

REWALK ROBOTICS LTD.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

There were no options granted during the nine months ended September 30, 2020.

The fair value of restricted share units (“RSUs”) granted is determined based on the price of the Company’s ordinary shares on the date of grant.

A summary of employee and non-employee directors share options activity during the nine months ended September 30, 2020 is as follows:

Any option that is forfeited

or canceled before expiration becomes available for future grants under the 2014 Plan.

There were no options granted during the three months ended March 31, 2021 and 2020.

The fair value of RSUs granted is determined based on the price of the Company's ordinary shares on the date of grant.

A summary of employee share options activity during the three months ended March 31, 2021 is as follows:

life (in years)

2 unchanged sentences

Options exercisable at the end of the period

A summary of employee and non-employee directors RSUs activity during the nine months ended September 30, 2020 is as follows:

REWALK ROBOTICS LTD.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

A summary of employee RSUs activity during the three months ended March 31, 2021 is as follows:

Number of shares underlying outstanding RSUs

date fair value

Weighted average grant date fair value

Unvested RSUs at the beginning of the period

Unvested RSUs at the end of the period

The weighted average grant date fair value of options granted during the nine months ended September 30, 2019 was $2.98.

The weighted average grant date fair value of

RSUs granted during the nine months ended September 30, 2020 and 2019 were $1.44 and $4.69, respectively.

The weighted average grant date fair value of RSUs granted during the three months ended March 31, 2020 was $1.32.

The Company did not grant RSUs during the three months ended

March 31, 2020.

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 nine months ended September 30, 2020 and 2019.

As of September 30, 2020, there were $2.0 million of total

unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the Company’s 2012 Equity Incentive Plan and its 2014 Plan.

This cost is expected to be recognized over a period of approximately 3.22

REWALK ROBOTICS LTD.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The number of options and RSUs outstanding as of September 30, 2020 is set forth below, with options separated by range of exercise price.

No options were exercised during the three months ended March 31, 2021 and March 31, 2020.

As of March 31, 2021, there were $1.5 million of total

unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the Company's 2014 Plan.

This cost is expected to be recognized over a period of approximately 2.89 years.

The number of options and RSUs outstanding as of March 31, 2021 is set forth below, with options separated by range of exercise price.

Range of exercise price

Options and RSUs outstanding as of

September 30,

Options and RSUs outstanding as of March 31, 2021

life (years) (1)

outstanding and exercisable as of

September 30,

Options outstanding and exercisable as of March 31, 2021

life (years) (1)

4 unchanged sentences

Share-based awards to non-employee consultants:

As of September 30, 2020, there are no outstanding options or RSUs held by non-employee consultants.

As of March 31, 2021, there are no outstanding options or RSUs held by non-employee consultants.

REWALK ROBOTICS LTD.

2 unchanged sentences

Warrants to purchase ordinary shares:

The following table summarizes information about warrants outstanding and exercisable as of September 30, 2020:

The following table summarizes information about warrants outstanding and exercisable as of March 31, 2021:

Issuance date

29 unchanged sentences

July 6, 2020 (16)

Represents warrants for ordinary shares issuable upon an exercise price of $7.5 per share, which were granted on December 31, 2015 to Kreos Capital V (Expert) Fund Limited, or Kreos, in

connection with a loan made by Kreos to us and are currently exercisable (in whole or in part) until the earlier of (i) December 30, 2025 or (ii) immediately prior to the consummation of a merger, consolidation, or reorganization of us

with or into, or the sale or license of all or substantially all the assets or shares of us to, any other entity or person, other than a wholly-owned subsidiary of us, excluding any transaction in which our shareholders prior to the

transaction will hold more than 50% of the voting and economic rights of the surviving entity after the transaction.

None of these warrants had been exercised as of September 30, 2020.

Represents warrants issued as part of our follow-on offering in November 2016.

At any time, the board of directors may reduce the exercise price of the warrants to any amount and for any

period of time it deems appropriate.

Represents common warrants that were issued as part of the $8.0 million drawdown under the Loan Agreement which occurred on December 28, 2016.

See footnote 1 for exercisability terms.

Represents common warrants that were issued as part of our follow-on offering in November 2018.

Represents common warrants that were issued to the underwriters as compensation for their role in our follow-on offering in November 2018.

December 3, 2020 (17)

December 3, 2020 (18)

February 26, 2021 (19)

August 26, 2026

February 26, 2021 (20)

August 26, 2026

Represents warrants for ordinary shares issuable upon an exercise price of $7.500 per share, which were granted on December 31, 2015 to Kreos Capital V (Expert) Fund Limited, or Kreos, in connection with a loan made by Kreos to us and are

currently exercisable (in whole or in part) until the earlier of (i) December 30, 2025 or (ii) immediately prior to the consummation of a merger, consolidation, or reorganization of us with or into, or the sale or license of all or

substantially all the assets or shares of us to, any other entity or person, other than a wholly-owned subsidiary of us, excluding any transaction in which the Company’s shareholders prior to the transaction will hold more than 50% of the

voting and economic rights of the surviving entity after the transaction.

None of these warrants had been exercised as of March 31, 2021.

Represents warrants issued as part of the Company’s follow-on offering in November 2016.

At any time, the Company’s board of directors may reduce the exercise price of the warrants to any amount and for any period of time it deems

Represents common warrants that were issued as part of the $8.000 million December 28, 2016 drawdown under the Loan Agreement between the Company and Kreos, pursuant to which Kreos extended a line of credit to us in the amount of $20

million, with interest payable monthly in arrears on any amounts drawn down at a rate of 10.75% per year from the applicable drawdown date through December 29, 2020, the date on which all principal was repaid.

See footnote 1 for

exercisability terms of the common warrants.

REWALK ROBOTICS LTD.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Represents warrants that were issued to the exclusive placement agent as compensation for its role in our follow-on offering in February 2019.

Represents warrants that were issued to certain institutional purchasers in a private placement in our registered direct offering of ordinary shares in April 2019.

Represents warrants that were issued to the placement agent as compensation for its role in our April 2019 registered direct offering.

Represents common warrants that were issued as part of the Company’s follow-on offering in November 2018.

Represents common warrants that were issued to the underwriters as compensation for their role in the Company’s follow-on offering in November 2018.

Represents warrants that were issued to the exclusive placement agent as compensation for its role in the Company’s follow-on offering in February 2019.

Represents warrants that were issued to certain institutional purchasers in a private placement in the Company’s registered direct offering of ordinary shares in April 2019.

Represents warrants that were issued to the placement agent as compensation for its role in the Company’s April 2019 registered direct offering.

Represents warrants that were issued to certain institutional investors in a warrant exercise agreement on June 5, 2019 and June 6, 2019, respectively.

Represents warrants that were issued to the placement agent as compensation for its role in our June 2019 warrant exercise agreement and concurrent private placement of warrants.

Represents warrants that were issued to certain institutional purchasers in a private placement in the Company’s registered direct offering of ordinary shares in June 2019.

Represents warrants that were issued to the placement agent as compensation for its role in our June 2019 registered direct offering and concurrent private placement of warrants.

Represents warrants that were issued to the placement agent as compensation for its role in the Company’s June 2019 warrant exercise agreement and concurrent private placement of warrants.

Represents warrants that were issued to certain institutional investors in a warrant exercise agreement in June 2019.

Represents warrants that were issued to the placement agent as compensation for its role in the Company’s June 2019 registered direct offering and concurrent private placement of warrants.

Represents warrants that were issued to certain institutional purchasers in a private placement in the Company’s best efforts offering of ordinary shares in February 2020.

During the three months ended March 31, 2021 3,740,100 warrants

were exercised for total consideration of $4,675,125.

Represents warrants that were issued to the placement agent as compensation for its role in the Company’s February 2020 best efforts offering.

During the three months ended March 31, 2021 230,160 warrants were exercised for total

consideration of $359,625.

Represents warrants that were issued to certain institutional purchasers in a private placement in our registered direct offering of ordinary shares in July 2020.

During the three months ended March 31, 2021 2,020,441 warrants were

exercised for total consideration of $3,555,976.

Represents warrants that were issued to the placement agent as compensation for its role in the Company’s July 2020 registered direct offering.

Share-based compensation expense for employees and non-employees:

The Company recognized non-cash share-based compensation expense for both employees and non-employees in the condensed consolidated

statements of operations as follows (in thousands):

Nine Months Ended

September 30,

Represents warrants that were issued to certain institutional purchasers in a private placement in our private placement offering of ordinary shares in December 2020.

During the three months ended March 31, 2021 3,598,072 warrants were

exercised for total consideration of $4,821,416.

Represents warrants that were issued to the placement agent as compensation for its role in the Company’s December 2020 private placement.

During the three months ended March 31, 2021 225,981 warrants were exercised for total consideration

Represents warrants that were issued to certain institutional purchasers in a private placement in our private placement offering of ordinary shares in February 2021.

REWALK ROBOTICS LTD.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Represents warrants that were issued to the placement agent as compensation for its role in the Company’s February 2021 private placement.

Share-based compensation expense for employees

and non-employees:

The Company recognized non-cash share-based compensation expense for both employees and non-employees in the condensed consolidated statements of operations as follows (in

Three Months Ended March 31,

Cost of revenues

2 unchanged sentences

General and administrative

REWALK ROBOTICS LTD.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Equity raise:

Follow-on offerings

In November 2018, the Company entered into an underwriting agreement with H.C.

Wainwright & Co., LLC (“H.C.

Wainwright”), in connection with the Company’s

follow-on public offering of 496,040 units, each consisting of one ordinary share and one common warrant to purchase one ordinary share with an exercise price of $7.5 per warrant.

Each unit was sold to the public at a price of $7.50 per

On November 18, 2018, H.C.

Wainwright exercised in full its option to purchase 231,964 ordinary shares for $7.25 per share and/or common warrants to purchase up to an additional 231,964 ordinary shares for $0.25 per warrant.

Additionally, the Company issued and sold 1,050,372 pre-funded units at a price to the public of $7.25 per unit.

Each unit containing one pre-funded warrant with an exercise price of $0.25 per share and

one warrant to purchase one ordinary share with an exercise price of $7.50 per warrant.

The total gross proceeds received from the November 2018 follow-on public offering, before deducting commissions, discounts and expenses, were

$13.1 million (including proceeds from the exercise of 90,691 pre-funded warrants at the closing of the offering).

As of December 31, 2018, additional pre-funded warrants to purchase an aggregate 562,466 ordinary shares had been

exercised, for additional proceeds of $140,617.

During the nine month ended September 30, 2019 additional 288,000 pre-funded warrants and 296,087 warrants to purchase an aggregate 584,087 ordinary shares had been exercised, for

additional proceeds of $1.5 million.

As compensation for their role in the offering, the Company also issued to the underwriters warrants to purchase up to 106,680 ordinary shares, which became immediately exercisable starting on

November 20, 2018 until November 15, 2023 at $9.375 per share.

In February 2019, the Company entered into an exclusive placement agent agreement with H.C.

Wainwright, on a reasonable best-efforts basis in connection with a

public offering of 760,000 ordinary shares at a price of $5.75 per share.

The total gross proceeds received from the February 2019 follow-on public offering, before deducting commissions, discounts and expenses, were $4.37 million.

Company also issued to H.C Wainwright and/or its designees warrants to purchase up to 45,600 ordinary shares, which are immediately exercisable starting on February 25, 2019 until February 21, 2024 at $7.1875 per share.

In April 2019, the Company entered into securities purchase agreements with certain institutional purchasers whereby the Company issued 816,914 ordinary shares at

$5.2025 per ordinary share and warrants to purchase up to 408,457 ordinary shares with an exercise price of $5.14 per share, exercisable from April 5, 2019 until October 7, 2024, in a private placement that took place concurrently with

the Company’s registered direct offering of ordinary shares in April 2019.

Additionally the Company issued warrants to purchase up to 49,015 ordinary shares, with an exercise price of $6.503125 per share, exercisable from April 5, 2019

until April 3, 2024, to representatives of H.C.

Wainwright as compensation for its role as the placement agent in our April 2019 registered direct offering and concurrent private placement of warrants.

REWALK ROBOTICS LTD.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

On June 5, 2019 and June 6, 2019, the Company entered into warrant exercise agreements with certain institutional investors whereby the Company issued warrants to purchase up

to 1,464,665 ordinary shares with an exercise price of $7.50 per share, exercisable from June 5, 2019 or June 6, 2019 until June 5, 2024 or June 6, 2024, respectively.

Additionally, the Company issued warrants to purchase up to 87,880 ordinary

shares, with an exercise price of $9.375 per share, exercisable from June 5, 2019 until June 5, 2024, to certain representatives of H.C.

Wainwright as compensation for its role as the placement agent in our June 2019 warrant exercise agreement

and concurrent private placement of warrants.

On June 12, 2019, the Company entered into a purchase agreement with certain institutional investors for the issuance and sale of 833,334 ordinary shares, par value NIS 0.25

per share at $6.00 per ordinary share and warrants to purchase up to 416,667 ordinary shares with an exercise price of $6.00 per share, exercisable from June 12, 2019 until December 12, 2024, in a private placement that took place concurrently

with our registered direct offering of ordinary shares in June 2019.

Additionally, the Company issued warrants to purchase up to 50,000 ordinary shares, with an exercise price of $7.50 per share, exercisable from June 12, 2019 until June 10,

2024, to certain representatives of H.C.

Wainwright as compensation for its role as the placement agent in our June 2019 registered direct offering and concurrent private placement of warrants.

On February 10, 2020, the Company closed a “best efforts” public offering whereby the Company issued an aggregate of 5,600,000 of common units and pre-funded units at a

public offering price of $1.25 per common unit and $1.249 per pre-funded unit.

Follow-on offerings and warrants exercise:

On February 19, 2021, the Company entered into a purchase agreement with certain institutional and other accredited investors for the issuance and sale of 10,921,502 ordinary

shares, par value NIS 0.25 per share at $3.6625 per ordinary share and warrants to purchase up to an aggregate of 5,460,751 ordinary shares with an exercise price of $3.6 per share, exercisable from February 19, 2021 until August 26, 2026.

Additionally, the Company issued warrants to purchase up to 655,290 ordinary shares, with an exercise price of $4.578125 per share, exercisable from February 19, 2021 until August 26, 2026, to certain representatives of H.C.

Wainwright & Co., LLC

Wainwright”) as compensation for its role as the placement agent in our February 2021 private placement offering.

During the three months ended March 31, 2021, we received a total of 9,814,754 outstanding warrants with exercise prices ranging from $1.25 to $1.79 were exercised, for total

gross proceeds of approximately $13.8 million.

On February 10, 2020, the Company closed a “best efforts” public offering whereby the Company issued an aggregate of 5,600,000 of common units and pre-funded units at a public

offering price of $1.25 per common unit and $1.249 per pre-funded unit.

As part of the public offering, the Company entered into a securities purchase agreement with certain institutional purchasers.

Each common unit consisted of one

ordinary share, par value NIS 0.25 per share, and one common warrant to purchase one ordinary share.

Each of the 1,546,828 pre-funded unit consisted of one pre-funded warrant to purchase one ordinary share and one common warrant.

Additionally,

the Company issued warrants to purchase up to 336,000 ordinary shares, with an exercise price of $1.5625 per share, to representatives of H.C.

Wainwright as compensation for its role as the placement agent in the Company’s February 2020

During the three months ended March 31, 2020, all pre-funded warrants to purchase ordinary shares were exercised.

During the three months ended September 30, 2020, 10,000 warrants to purchase ordinary shares were exercised.

September 30, 2020, a total of 1,256,500 warrants to purchase ordinary shares were exercised.

On July 6, 2020 the Company entered into a purchase agreement with certain institutional investors for the issuance and sale of (i) 4,938,278 ordinary

shares, par value NIS 0.25 per share, at a price of $1.8225 per ordinary share and (ii) warrants to purchase up to 2,469,139 ordinary shares with an exercise price of $1.76 per share, exercisable from July 6, 2020 until January 6, 2026.

Additionally, the Company issued warrants to purchase up to 296,297 ordinary shares, with an exercise price of $2.2781 per share, exercisable from July 6, 2020 until July 2, 2025, to certain representatives of H.C.

Wainwright as compensation

for its role as the placement agent in its July 2020 registered direct offering.

Each common unit consisted of one ordinary share,

par value NIS 0.25 per share, and one common warrant to purchase one ordinary share.

Each pre-funded unit consisted of one pre-funded warrant to purchase one ordinary share and one common warrant.

Additionally, the Company issued warrants to purchase

up to 336,000 ordinary shares, with an exercise price of $1.5625 per share, to representatives of H.C.

Wainwright as compensation for its role as the placement agent in the Company’s February 2020 offering.

During the three months ended March 31,

2020 all pre-funded warrants to purchase ordinary shares were exercised.

REWALK ROBOTICS LTD.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Investment agreement

In May 2018, the Company entered into a fee and release agreement with Canaccord Genuity LLC (“Canaccord Genuity”) requiring the Company to pay to Canaccord Genuity, in connection with a settlement, in

addition to certain cash amounts, (i) $125 thousand in ordinary shares of the Company after the closing of the first tranche on May 15, 2018 (the “First Tranche Closing”) of the Timwell transaction and (ii) $225 thousand in ordinary

shares of the Company after the closing of the Second Tranche of the Timwell transaction (or such lower amount if the Second Tranche Closing is less than $10.0 million).

The price per share used for calculation of the number of

ordinary shares issued by the Company to Canaccord Genuity is based on the volume weighted average price of the Company’s ordinary shares as reported on the Nasdaq Capital Market for the five consecutive trading days prior to the date

The Company is also obligated to pay $100 thousand in cash following the closing of the Third Tranche of $5.0 million (or such lower amount if the Third Tranche Closing is less than $5.0 million).

Following the First

Tranche Closing, the Company issued 4,715 ordinary shares to Canaccord Genuity.

In late March 2020, Timwell notified the Company that it would not invest the second and third tranches under the Investment Agreement.

In response, in early

April 2020, the Company’s Board of Directors also removed Timwell’s designee, who was appointed pursuant to the Investment Agreement, from the Board of Directors, due to this breach pursuant to the terms of the Investment Agreement.

the Company continues to view China as a market with key opportunities for products designed for stroke patients, the Company continues to evaluate potential relationships with other groups to penetrate the Chinese market.

FINANCIAL EXPENSES, NET

The components of financial expenses, net were as follows (in thousands):

Three Months Ended

September 30,

Nine Months Ended

September 30,

FINANCIAL EXPENSES (INCOME), NET

The components of financial expenses (income), net were as follows (in thousands):

Three Months Ended March 31,

Foreign currency transactions and other

1 unchanged sentence

Bank commissions

REWALK ROBOTICS LTD.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

GEOGRAPHIC INFORMATION AND MAJOR CUSTOMER AND PRODUCT DATA

1 unchanged sentence

ASC 280, “Segment Reporting” establishes standards for reporting information about operating segments.

Operating segments are

defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

manages its business on the basis of one reportable segment, and derives revenues from selling units and services (see Note 1 for a brief description of the Company’s business).

The following is a summary of revenues within geographic areas:

Three Months Ended

September 30,

Nine Months Ended

September 30,

Operating segments are defined as components of an enterprise about

which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

The Company manages its business on the basis of one reportable

segment and derives revenues from selling systems and services (see Note 1 for a brief description of the Company’s business).

The following is a summary of revenues within geographic areas (in thousands):

Three Months Ended March 31,

Revenues based on customer’s location :

United States

Latin America

Total revenues

September 30,

Long-lived assets by geographic region (*):

1 unchanged sentence

(*) Long-lived assets are comprised of property and equipment, net.

Nine Months Ended

September 30,

REWALK ROBOTICS LTD.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Three Months Ended March 31,

Major customer data as a percentage of total revenues:

SUBSEQUENT EVENTS

On November 6, 2020 the Company received confirmation of its PPP Note forgiveness, see note 6 above for further details.

M ANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operation should be read in conjunction with the unaudited condensed

consolidated financial statements and the related notes included elsewhere in this quarterly report and with our audited consolidated financial statements included in our 2019 Form 10-K as filed with the SEC.

In addition to historical condensed

financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs.

Our actual results could differ materially from those discussed in the forward-looking statements.

For a discussion

of factors that could cause or contribute to these differences, see “Special Note Regarding Forward-Looking Statements” below.

Special Note Regarding Forward-Looking Statements

In addition to historical information, this quarterly report on Form 10-Q (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 this 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 management’s conclusion, and our independent registered public accounting firm’s statement in its opinion relating to our consolidated financial statements for the fiscal year ended December 31, 2019, that there is a substantial

doubt as to our ability to continue as a going concern;

the current coronavirus (COVID-19) pandemic has adversely affected and may continue to affect adversely 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 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 establish a pathway to commercialize our products in China;

• 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 our products;

• our limited operating history and our ability to leverage our sales, marketing and training infrastructure;

• our expectations as to our clinical research program and clinical results;

• our expectations regarding future growth, including our ability to increase sales in our existing geographic markets and expand to new

• our ability to obtain certain components of our products from third-party suppliers and our continued access to our product manufacturers;

• our ability to repay our secured indebtedness;

• our ability to improve our products and develop new products;

• the outcome of litigation and other legal matters;

• 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 ReWalk’s ability to market and sell its products;

• our ability to gain and maintain regulatory approvals;

• our expectations as to the results of the FDA, potential regulatory developments with respect to our mandatory 522 postmarket

surveillance study;

• our ability to maintain adequate protection of our intellectual property and to avoid violation of the intellectual property rights of

• the risk of a cybersecurity attack or breach of our IT systems significantly disrupting our business operations;

• 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 risk of substantial dilution resulting from the periodic issuances of our ordinary shares;

• the impact of the market price of our ordinary shares on the determination of whether we are a passive foreign investment company.

The preceding list is not intended to be an exhaustive list of all of our 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 1, Item 1A.

Risk Factors” of our 2019 Form 10-K, and in other reports filed by us with 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.

We are an innovative medical device company that is designing, developing and commercializing robotic exoskeletons that allow individuals with mobility impairments or other

medical conditions the ability to stand and walk once again.

We have developed and are continuing to commercialize our ReWalk Personal and ReWalk Rehabilitation devices for individuals with spinal cord injury (“SCI Products”), which are

exoskeletons designed for individuals with paraplegia that use our patented tilt-sensor technology and an on-board computer and motion sensors to drive motorized legs that power movement.

We have also developed and began commercializing our ReStore device in June 2019.

ReStore is a powered, lightweight soft exo-suit intended for use in the rehabilitation of

individuals with lower limb disability due to stroke.

Our principal markets are the United States and Europe.

In Europe, we have a direct sales operation in Germany and the United Kingdom and work with distribution partners in certain other major

We have offices in Marlborough, Massachusetts, Berlin, Germany and Yokneam, Israel, where we operate our business from.

We have in the past generated and expect to generate in the future revenues from a combination of third-party payors, self-payors, including private and government employers,

and institutions.

While a broad uniform policy of coverage and reimbursement by third-party commercial payors currently does not exist in the United States for electronic exoskeleton technologies such as the ReWalk Personal, we are pursuing

various paths of reimbursement and support fundraising efforts by institutions and clinics.

In December 2015, the U.S.

Department of Veterans Affairs, or the VA, issued a national policy for the evaluation, training and procurement of ReWalk

Personal exoskeleton systems for all qualifying veterans across the United States.

The VA policy is the first national coverage policy in the United States for qualifying individuals who have suffered spinal cord injury.

As of September 30, 2020,

we had placed 24 units as part of the VA policy.

According to a 2017 report published by the Centers for Medicare and Medicaid Services, or CMS, approximately 55% of the spinal cord injury population which are at least five

years post their injury date are covered by CMS.

In July 2020, a code was issued for ReWalk Personal 6.0 (effective October 1, 2020), which might later be followed by coverage policy of CMS.

Additionally, to date, several private insurers in the United States and Europe have provided reimbursement for ReWalk in certain cases.

In Germany, we continue to make progress toward achieving

ReWalk coverage from the various government, private and worker’s compensation payors.

In September 2017, each of German insurer BARMER GEK (“Barmer”) and national social accident insurance provider Deutsche Gesetzliche Unfallversicherung

(“DGUV”), indicated that they will provide coverage to users who meet certain inclusion and exclusion criteria.

In February 2018, the head office of German statutory health insurance, or SHI, Spitzenverband (“GKV”) confirmed their decision to

list the ReWalk Personal 6.0 exoskeleton system in the German Medical Device Directory.

This decision means that ReWalk will be listed among all medical devices for compensation, which SHI providers can procure for any approved beneficiary on a

case-by-case basis.

Since then, we have announced several contracts with German payors.

During the second quarter of 2020 we have finalized and moved to implement two separate agreements to distribute additional product lines in the U.S.

The Company will be the exclusive

distributor of the MediTouch Tutor movement biofeedback systems in the United States, and will also have distribution rights for the MYOLYN MyoCycle FES cycles to U.S.

rehabilitation clinics and personal sales through the U.S.

Department of

Veterans Affairs (“VA”) hospitals.

These new products will improve our product offering to clinics as well as patients within the VA as they both have similar clinician and patient profile.

Third Quarter 2020 and Subsequent Period Business Highlights

Total revenue for the third quarter of 2020 was $0.7 million, compared to $1.2 million in the prior year quarter;

Received Medicare Provider certification from the Centers for Medicare & Medicaid Services ("CMS");

Completed additional contract with a German payor;

Raised total of approximately $9.0 million in gross proceeds from a registered direct offering of ordinary shares and a

concurrent private placement of unregistered warrants to purchase ordinary shares (as previously referenced in ReWalk’s Second Quarter 2020 Financial Results).

Evolving COVID-19 Pandemic

The impact of the novel coronavirus (COVID-19) pandemic has been and will likely continue to be extensive in many aspects of society, which has

resulted in and will likely continue to result in significant disruptions to the global economy, as well as businesses and capital markets around the world.

In an effort to halt the outbreak of COVID-19, a number of countries, including the

United States and many countries in Europe, have placed significant restrictions on travel, and many businesses have announced extended closures.

Although certain of these countries or locales within the countries have begun to allow reopening

of certain businesses, it is unclear how long total or partial shutdowns may last and whether additional shutdowns will be necessary to the extent future outbreaks occur.

The COVID-19 pandemic has affected our ability to engage with our SCI Products, ReStore and Distributed Products customers, deliver ordered units or repair existing

systems, and provide training of our products to new patients who have largely remained at home due to local movement restrictions and to rehabilitation centers, which have temporarily shifted priorities and responses to pandemic-related

medical equipment.

As a result, our revenues in the first quarter of 2020 were adversely impacted.

During the second quarter of 2020, we were able to deliver several units that we could not complete in the first quarter of 2020.

third quarter of 2020, we had limited market access and we encountered reduced payor attention that affected our results for the quarter.

The overall impact of the limitations on our sales efforts are currently difficult to determine, but we

believe that the adverse impact may continue especially as our ability to trial new patients with our SCI Products is limited and as capital budgets for rehabilitation devices such as the ReStore are reduced or currently on-hold in most of

the clinics and some are enforcing in-clinic restrictions that effect our ability to demonstrate our devices.

We continue to monitor our sales pipeline on a day-to-day basis in order to assess the quarterly effect of these limitations as some

have short term effects and some affects our future pipeline development.

Limitations on travel and business closures recommended by federal, state, and local governments, could, among other things, impact our ability to enroll patients in

clinical trials, recruit clinical site investigators, and obtain timely approvals from local regulatory authorities.

While our manufacturer, Sanmina Corporation, has not shut down its facilities during the COVID-19 pandemic, our manufacturing

may also be impacted due to supply chain delays or adverse impacts on our production capacity due to government directives or health protocols that might impact our production facility, and the current limitations on our sales activities has

made it hard for us to effectively forecast our future requirements for systems.

For more information, see “Part II, Item 1A.

Risk Factors-A pandemic, epidemic or outbreak of an infectious disease, such as COVID-19, has adversely affected and

may continue to materially and adversely impact our business, our operations and our financial results” and “Part II, Item 1A.

Risk Factors-We depend on a single third party to manufacture our products, and we rely on a limited number of

third-party suppliers for certain components of our products.”

Our future results of operations and liquidity could be adversely impacted by delays in payments of outstanding receivable amounts beyond normal

payment terms, supply chain disruptions and operational challenges faced by our customers.

Continued outbreaks of COVID-19 could result in a widespread health crisis that could adversely affect the economies and financial markets of many

countries, resulting in an economic downturn or a global recession that could affect demand for our products and likely impact our operating results.

These may further limit or restrict our ability to access capital on favorable terms, or at

all, lead to consolidation that negatively impacts our business, weaken demand, increase competition, cause us to reduce our capital spend further, or otherwise disrupt our business.

To align our expenses with the current business environment, we took measures to adjust our cost structure and anticipated cash usage that have taken

effect in the second quarter and beyond, which included reducing our personnel costs and deferring our subcontractors costs mainly within the research and development segment as well as short term reduction in employee’s hours of work in

specific areas, eliminating or reducing non-critical consultants, implementing remote working in the United States and Germany, and establishing in-office measures to contain the spread of COVID-19.

These cost actions are designed to retain

talent and preserve cash returns, while at the same time continuing to invest in strategic goals.

These cost actions are intended to last throughout 2020 as needed, but the Company will continue to monitor the environment and extend or modify

these actions, if necessary.

Despite this current situation and the challenges it imposes, we continue to regularly engage with our current and prospective customers through video conferencing, virtual training events and online education demos

to offer our support and showcase the value of our products.

Results of Operations for the Three and Nine Months Ended September 30, 2020 and September 30, 2019

Our operating results for the three and nine months ended September 30, 2020, as compared to the same periods in 2019, are presented below.

The results set forth below are not

necessarily indicative of the results to be expected in future periods.

Three Months Ended

September 30,

Nine Months Ended

September 30,

Cost of revenues

Operating expenses:

Research and development, net

Sales and marketing

General and administrative

Total operating expenses

Operating loss

Financial expenses, net

Loss before income taxes

Taxes on income (tax benefit)

Net loss per ordinary share, basic and diluted

Weighted average number of shares used in computing net loss per ordinary share, basic and diluted

Three and Nine Months Ended September 30, 2020 Compared to Three and Nine Months Ended September 30, 2019

Our revenues for the three and nine months ended September 30, 2020 and 2019 were as follows:

Three Months Ended

September 30,

Nine Months Ended

September 30,

(in thousands, except

unit amounts)

(in thousands, except

unit amounts)

Personal unit revenues

Rehabilitation unit revenues

Revenues decreased by $487 thousand, or 39%, for the three months ended September 30, 2020 compared to the three months ended September 30, 2019.

Revenues decreased by

approximately $517 thousand, or 14%, for the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019.

The decrease in revenue for both three and nine months ended September 30, 2020 was driven primarily by the

impact of the COVID-19 pandemic, as we had limited market access.

In the future we expect our growth to be driven by sales of our ReWalk Personal device to third-party payors as we continue to focus our resources on broader commercial

coverage policies with third-party payors as well as sales of the ReStore and other products to rehabilitation clinics and personal users.

Our gross profit for the three and nine months ended September 30, 2020 and 2019 were as follows (in thousands):

Three Months Ended

September 30,

Nine Months Ended

September 30,

Gross profit was 52% of revenue for the three months ended September 30, 2020 compared to 53% for the three months ended September 30, 2019.

Gross profit was 56% of revenue for the nine months

ended September 30, 2020 compared to 54% for the nine months ended September 30, 2019.

Our gross profit decreased for the three and nine months ended September 30, 2020 compared to 2019, the decrease is mainly due to lower number of units

We expect our gross profit to improve assuming we increase our sales volumes which could also decrease the product manufacturing costs.

Improvements may be partially offset by the lower margins

we expect upon the launch period of our new ReStore and Distributed Products as well as due to an increase in the cost of product parts

Research and Development Expenses

Our research and development expenses, net, for the three and nine months ended September 30, 2020 and 2019 were as follows (in thousands):

Three Months Ended

September 30,

Nine Months Ended

September 30,

Research and development expenses, net

Research and development expenses, net, decreased $262 thousand, or 26%, for the three months ended September 30, 2020 compared to the three months ended September 30, 2019.

development expenses, net, decreased $1,597 thousand, or 37%, for the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019.

The decrease is attributable to decreased personnel and personnel related expenses

and decreased consulting costs associated with the development and clinical study costs of our ReStore soft suit exoskeleton.

We intend to focus our research and development expenses mainly on our current products maintenance as well as developing our “soft suit” exoskeleton for additional indications affecting the

ability to walk or a home use design.

Sales and Marketing Expenses

Our sales and marketing expenses for the three and nine months ended September 30, 2020 and 2019 were as follows (in thousands):

Three Months Ended

September 30,

Nine Months Ended

September 30,

Sales and marketing expenses

Sales and marketing expenses increased $54 thousand, or 4%, for the three months ended September 30, 2020 compared to the three months ended September 30, 2019.

Sales and marketing expenses

decreased $30 thousand, or 1%, for the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019.

The increase in expenses for the three months ended September 30, 2020 was driven by increased personnel and

personnel related expenses offset with a decrease in travel and tradeshow activities due to COVID-19.

In the near term our sales and marketing expenses are expected to be driven by our efforts to commercialize our current products and to increase reimbursement coverage of the

ReWalk Personal device.

General and Administrative Expenses

Our general and administrative expenses for the three and nine months ended September 30, 2020 and 2019 were as follows (in thousands):

Three Months Ended

September 30,

Nine Months Ended

September 30,

General and administrative expenses

General and administrative expenses decreased $11 thousand, or 1%, for the three months ended September 30, 2020 compared to the three months ended September 30, 2019.

General and administrative

expenses decreased $214 thousand, or 5%, for the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019.

The expenses for the three month period remained relatively flat, whereas the decrease in the nine month

period was mainly driven by lower non-cash compensation expenses.

Financial Expenses, Net

Our financial expenses, net, for the three and nine months ended September 30, 2020 and 2019 were as follows (in thousands):

Three Months Ended

September 30,

Nine Months Ended

September 30,

Financial expenses, net

Financial expenses, net, decreased $118 thousand, or 33%, for the three months ended September 30, 2020 compared to the three months ended September 30, 2019.

expenses, net, decreased $408 thousand, or 36%, for the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019.

The decrease is attributable to decreased interest expenses related to the Loan Agreement with

Our income tax for the three and nine months ended September 30, 2020 and 2019 was as follows (in thousands):

Three Months Ended

September 30,

Nine Months Ended

September 30,

Taxes on income (tax benefit)

Taxes on income increased $27 thousand for the three months ended September 30, 2020 compared to the three months ended September 30, 2019.

Taxes on income increased $81

thousand for the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019.

The increase is due to higher tax provision in our U.S subsidiary.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with United States generally accepted accounting principles.

The preparation of our financial statements

requires us to make estimates, judgments and assumptions that can affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues

and expenses during the reporting period.

We base our estimates, judgments and assumptions on historical experience and other factors that we believe to be reasonable under the circumstances.

Materially different results can occur as

circumstances change and additional information becomes known.

Besides the estimates identified above that are considered critical, we make many other accounting estimates in preparing our financial statements and related disclosures.

to our audited consolidated financial statements included in our 2019 Form 10-K for a description of the significant accounting policies that we used to prepare our consolidated financial statements.

There have been no material changes to our critical accounting policies or our critical judgments from the information provided in “Part II, Item 7.

Management’s Discussion and

Analysis of Financial Condition and Results of Operations - Critical Accounting Policies” of our 2019 Form 10-K except for the updates provided in note 3 of our unaudited condensed consolidated financial statements set forth in “Part I, Item 1.

Financial Statements” of this quarterly report.

Recent Accounting Pronouncements

See Note 3 to our unaudited condensed consolidated financial statements set forth in “Part I, Item 1.

Financial Statements” of this quarterly report for information regarding

new accounting pronouncements.

Liquidity and Capital Resources

Sources of Liquidity and Outlook

Since inception, we have funded our operations primarily through the sale of certain of our equity securities and convertible notes to investors in private placements, the sale

of our ordinary shares in public offerings and the incurrence of bank debt.

As of September 30, 2020, the Company had cash and cash equivalents of $18.1 million.

The Company has an accumulated deficit in the total amount of approximately $179 million

as of September 30, 2020 and further losses are anticipated in the development of its business.

Those factors raise substantial doubt about the Company’s ability to continue as a going concern.

The ability to continue as a going concern is

dependent upon the Company obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.

The Company intends to finance operating costs over the next twelve months with existing cash on hand, continued close examination of its operating spend and potential

reduction in specific areas, and future issuances of equity and debt securities, or through a combination of the foregoing.

However, the Company will need to seek additional sources of financing if the Company requires more funds than anticipated

during the next 12 months or in later periods.

We previously considered the Investment Agreement with Timwell as a potential source of ongoing liquidity.

However, Timwell notified us that it would not invest the second and

third tranches under the Investment Agreement.

For more information, see “Timwell Private Placement” below.

The accompanying 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.

The condensed consolidated financial statements for the three and nine months ended September 30, 2020 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.

Our anticipated primary uses of cash are (i) sales, marketing and reimbursement expenses related to market development activities of our ReStore device and our Distributed

Products as well as broadening third-party payor coverage to our SCI Products, and (ii) research and development costs related to our current products maintenance and potential expansion of the indication of use of our lightweight “soft suit”

exoskeleton to other medical conditions as well as home therapy.

Our future cash requirements will depend on many factors, including our rate of revenue growth, the expansion of our sales and marketing activities, the timing and extent of our

spending on research and development efforts and international expansion.

If our current estimates of revenue, expenses or capital or liquidity requirements change or are inaccurate, we may seek to sell additional equity or debt securities,

arrange for additional bank debt financing or refinance our indebtedness.

There can be no assurance that we will be able to raise such funds on acceptable terms.

For more information, see “Part I, Item 1A.

Risk Factors-We have concluded that

there are substantial doubts as to our ability to continue as a going concern.”

Loan Agreement with Kreos and Related Warrant to Purchase Ordinary Shares

On December 30, 2015, we entered into the Loan Agreement with Kreos pursuant to which Kreos extended a line of credit to us in the amount of $20 million.

On January 4, 2016, we

drew down $12.0 million under the Loan Agreement.

Under the terms of the Loan Agreement we were entitled to draw down up to an additional $8.0 million until December 31, 2016, if we raised $10.0 million or more in the issuance of shares of our

capital stock (including debt convertible into shares of our capital stock) by December 31, 2016.

On December 28, 2016, we drew down the remaining $8.0 million available under the Loan Agreement.

Interest is payable monthly in arrears on any

amounts drawn down at a rate of 10.75% per year from the applicable drawdown date through the date on which all principal is repaid.

As of June 30, 2017, the Company raised more than $20 million in connection with the issuance of its share

capital and therefore, in accordance with the terms of the Loan Agreement, the repayment period was extended from 24 months to 36 months.

The principal was also reduced in connection with the issuance to Kreos on June 9, 2017 of a $3.0 million

secured convertible promissory note (the “Kreos Convertible Note”).

Pursuant to the Loan Agreement, we paid Kreos a transaction fee equal to 1.0% of the total available amount of the line of credit upon the execution of the agreement and we will

be required to pay Kreos an “end of loan payment” equal to 1.0% of the amount of each tranche drawn down upon the expiration of each such tranche.

Pursuant to the Loan Agreement, we granted Kreos a first priority security interest over all of our

assets, including certain intellectual property and equity interests in its subsidiaries, subject to certain permitted security interests.

In connection with the $12.0 million drawdown under the Loan Agreement, we issued to Kreos the warrant to purchase up to 4,771 of our ordinary shares at an exercise price of

$241 per share, which represented the average of the closing prices of our ordinary shares for the 30-day calendar period prior to the date of the issuance of the warrant, subject to adjustment as set forth in the warrant.

In connection with the

$8.0 million drawdown under the Loan Agreement on December 28, 2016, we increased the amount of the warrant from $1.15 million to $1.61 million, or by $460 thousand, such that the warrant represents the right to purchase up to 6,679 of our

ordinary shares.

The increase was based on the terms of the warrant, which provide that the amount of the warrant will be increased by 5.75% of any additional drawdowns.

Subject to the terms of the warrant, the warrant is exercisable, in whole or

in part, at any time prior to the earlier of (i) December 30, 2025, or (ii) immediately prior to the consummation of a merger, consolidation, or reorganization of us with or into, or the sale or license of all or substantially all our assets or

shares to, any other entity or person, other than a wholly- owned subsidiary of us, excluding any transaction in which our shareholders prior to the transaction will hold more than 50% of the voting and economic rights of the surviving entity

after the transaction.

On June 9, 2017, the Company and Kreos entered into the First Amendment to the Loan Agreement (the “First Amendment”).

As of that date the outstanding principal amount under

the Loan Agreement was $17.2 million.

Under the First Amendment, $3.0 million of the outstanding principal under the Loan Agreement is subject to repayment pursuant to the senior secured Kreos Convertible Note issued on June 9, 2017, thus

reducing the outstanding principal amount under the Loan Agreement to $14.2 million as of June 9, 2017.

This amended outstanding principal amount remains subject to repayment in accordance with the terms and conditions of the Loan Agreement and

an amended repayment schedule.

Interest on the Kreos Convertible Note is payable monthly in arrears at a rate of 10.75% per year.

Kreos may convert the then-outstanding principal and “end of loan payments” under the Kreos Convertible Note, in whole or in part, on one or more occasions, into up to 100,946

ordinary shares, at a conversion price per share equal to $31.7 per share (subject to customary anti-dilution adjustments) at any time until the earlier of (i) the maturity date of June 9, 2020 or (ii) a “Change of Control,” as defined in the

Loan Agreement.

On November 20, 2018, the Company and Kreos entered into the Second Amendment to the Loan Agreement (the “Second Amendment”).

In the Second Amendment, the Company agreed to repay $3.6 million to

Kreos in satisfaction of all outstanding indebtedness under the Kreos Convertible Note and other related payments, including prepayment costs and end of loan payments and Kreos agreed to terminate the Kreos Convertible Note.

The Company repaid

Kreos the $3.6 million by issuing to Kreos 192,000 units and 288,000 pre-funded units at the applicable public offering prices for an aggregate price of $3.6 million (including the aggregate exercise price for the ordinary shares to be received

upon exercise of the pre-funded warrants, assuming Kreos exercises all of the pre-funded warrants it purchased as part of the Company’s public offering).

The Company and Kreos also agreed to revise the principal and the repayment schedule under

the Kreos Loan Agreement.

The revised repayment schedule, effectively deferred an additional $1.1 million of payments that were due in 2018 and $2.8 million that were due in 2019 under the loan’s prior repayment schedule, for total deferred

payments of $3.9 million compared to the prior repayment schedule.

Additionally, Kreos and the Company entered into the Kreos Warrant Amendment, which amended the exercise price of the warrant to purchase 6,679 ordinary shares currently held by

Kreos from $241 to $7.50.

The Second Amendment also made certain changes to the prepayment premiums under the Kreos Loan Agreement, tying them to the date of the Second Amendment.

On June 5, 2019 and June 6, 2019, the Company entered into warrant exercise agreements with certain institutional investors of warrants to purchase the Company’s ordinary

shares, pursuant to which, Kreos agreed to exercise in cash their November 2018 warrants at the existing exercise price of $7.50 per share.

Under the exercise agreements, the Company also agreed to issue to Kreos new warrants to purchase up to

480,000 ordinary shares at an exercise price of $7.50 per share and exercise period of five years.

As of September 30, 2020, the outstanding principal amount under the Kreos Loan Agreement was $3.0 million.

Depending on our liquidity needs, we may seek to refinance up to a

substantial portion of our indebtedness under our Kreos Loan Agreement, which we have considered with Kreos from time to time, including by exchanging our indebtedness with Kreos for new convertible debt from a third-party investor, or to borrow

additional funds.

Paycheck Protection Program Loan Agreement

On April 21, 2020, RRI entered into a Note agreement evidencing an unsecured loan in the amount of $392 thousand under the PPP

as part of the CARES Act enacted on March 27, 2020.

The Note provides for an interest rate of 1.00% per year and matures two years after the date of initial disbursement.

Beginning on the seventh month following the date of initial

disbursement, RRI is required to make 18 monthly payments of principal and interest.

The Note may be used for payroll costs, costs related to certain group health care benefits and insurance premiums, rent payments, utility payments, mortgage

interest payments and interest payments on any other debt obligation that were incurred before February 15, 2020.

Under the terms of the CARES Act, PPP loan recipients can apply for and be granted forgiveness for all or a portion of loan

granted under the PPP, with such forgiveness to be determined, subject to limitations, based on the use of the loan proceeds for payment of payroll costs and any payments of mortgage interest, rent, and utilities.

The terms of any forgiveness

may also be subject to further requirements in any regulations and guidelines the Small Business Administration may adopt.

On September 29, 2020, the Company submitted an application for loan forgiveness and on November 6, 2020 the Company received confirmation of its PPP Note forgiveness .

Equity Raises

Form S-3 Limitations

Since we filed our Form 10-K on February 17, 2017, we have been subject to limitations under the applicable rules of Form S-3, which constrain our ability to secure

capital pursuant to our ATM Offering Program or other public offerings pursuant to our effective Form S-3.

These rules limit the size of primary securities offerings conducted by issuers with a public float of less than $75 million to no more

than one-third of their public float in any 12-month period.

Pursuant to these rules, until December 20, 2020, we may not sell in primary offerings under our Form S-3 more than approximately $9.6 million in any 12-month period, unless and until

we are no longer subject to these limitations.

We will cease to be subject to these limitations once our public float exceeds $75 million.

As of the date of this quarterly report, we have sold approximately $9.0 million in securities under our

Form S-3 during the last 12 months, when we were subject to these restrictions and, therefore, we can sell securities in the amount of $0.6 million under our Form S-3.

We will also recalculate the amount of this limitation if or when we conduct

another takedown under Form S-3.

Additionally, these limitations do not apply to secondary offerings for the resale of our ordinary shares or other securities by selling shareholders or to the issuance of ordinary shares upon conversion by

holders of convertible securities, such as warrants.

Our Form S-3 expires on May 23, 2022.

With respect to our ATM Offering Program, because we have sold $15.7 million in the program since its inception, we could only raise up to a remaining

$9.3 million using the program, subject to the $9.6 million limitation on use of Form S-3.

Because of these limitations to raise capital in securities offerings above the limitation applicable to us for sales under Form S-3 and our ongoing liquidity needs, we

may be required to seek and are currently actively exploring other methods of completing primary offerings, including, a registration statement on Form S-1 (which has no such size limitations), the preparation of which is more time-consuming

and costly, including due to potential SEC review.

We may also conduct such offerings in the form of private placements, potentially with registration rights or priced at a discount to the market value of our ordinary shares, which could

require shareholder approval under the rules of NASDAQ.

Any such transactions, including the perception that we will conduct a transaction, could result in substantial dilution of shareholders’ interests.

Initial Public Offering and Follow-on Offerings

Our initial public offering in September 2014 generated $36.3 million in net proceeds.

Additionally, on May 9, 2016, the SEC declared effective our Form S-3, pursuant to which

we registered up to $100 million of ordinary shares, warrants and/or debt securities and up to 175,525 ordinary shares offered by selling shareholders named therein.

On May 10, 2016, we entered into our Equity Distribution Agreement with Piper

Jaffray, pursuant to which we may offer and sell, from time to time, ordinary shares having an aggregate offering price of up to $25.0 million through Piper Jaffray acting as our agent.

The ordinary shares issued under the Equity Distribution

Agreement may be registered under the Securities Act using a registration statement on Form S-3.

Additionally, on November 1, 2016, we closed our follow-on public offering of 130,000 units, each consisting of one ordinary share and 0.75 of a warrant to purchase one

ordinary share.

The ordinary shares and the warrants underlying the units and the ordinary shares issuable upon exercise of the warrants are registered under the Securities Act on our Form S-3.

The warrants became exercisable during the period

commencing from the date of original issuance and ending on November 1, 2021, the expiration date of the warrants, at an initial exercise price of $118.75 per ordinary share.

Our net aggregate proceeds, after deducting underwriting discounts and

commissions and estimated expenses, were $11.1 million.

We also granted Oppenheimer & Co.

(“Oppenheimer”), as underwriter under the underwriting agreement, an option to purchase up to 19,500 additional units at the public offering price, less

the underwriting discount, for 30 days after October 27, 2016, which Oppenheimer did not exercise.

On November 21, 2017, we closed the base portion of our follow-on offering of 274,280 ordinary shares.

Each ordinary share was sold to the public at a price of $26.25.

November 22, 2017, National Securities Corporation, as underwriter, exercised in full its option to purchase 41,142 additional ordinary shares at the public offering price of $26.25 per unit, less the underwriting discount.

The Company’s net

aggregate proceeds of the base offering and over-allotment exercise, after deducting underwriting discounts and commissions and expenses, were $7.2 million.

On November 20, 2018, the Company completed its follow-on public offering in which the Company issued and sold 728,019 units, each consisting of one ordinary share and one

warrant to purchase one ordinary share.

Each unit was sold to the public at a price of $7.5 per unit, additionally the Company issued and sold 1,050,373 pre-funded units, each unit was sold to the public at a price of $7.25 per unit.

containing one pre-funded warrant with an exercise price of $0.25 per share and one warrant to purchase one ordinary share.

The total gross proceeds received from the follow-on public offering, before deducting commissions, discounts and

expenses, were $13.1 million (including proceeds from the exercise of 90,691 pre-funded warrants at the closing of the offering).

As of December 31, 2018, additional pre-funded warrants to purchase an aggregate 562,466 ordinary shares had been

exercised, for additional proceeds of $140,617.

During the nine months ended September 30, 2019 additional pre-funded warrants and warrants to purchase an aggregate 2,048,752 ordinary shares had been exercised, for additional proceeds of $12.4

As compensation for their role in the offering, the Company also issued to the underwriters warrants to purchase up to 106,680 ordinary shares, which are immediately exercisable starting on November 20, 2018 until November 15, 2023 at

$9.375 per share.

See Note 8b (2) above for more information about the Company’s follow-on public offering.

On February 15, 2019, the Company entered into an exclusive placement agent Agreement with H.C.

Wainwright, on a reasonable best-efforts basis in connection with a public

offering of 760,000 ordinary shares at a price of $5.75 per Share.

The total gross proceeds received from the follow-on public offering, before deducting commissions, discounts and expenses, were $4.37 million.

The Company also issued to H.C.

Wainwright and/or its designees warrants to purchase up to 45,600 ordinary shares, which are immediately exercisable starting on February 25, 2019 until February 21, 2024 at $7.1875 per share.

On April 3, 2019, the Company entered into an exclusive placement agent Agreement with H.C.

Wainwright in connection with a registered direct offering of the Company’s ordinary

shares, par value NIS 0.25 per share and a concurrent private placement of warrants to purchase ordinary shares.

The ordinary shares were offered pursuant to our Form S-3.

The Company signed a purchase agreement with certain institutional

investors for the issuance and sale of 816,914 ordinary shares at $5.2025 per ordinary share and warrants to purchase up to 408,457 ordinary shares at an exercise price of $5.14.

The warrants issued to these purchasers will be exercisable at any

time and from time to time, in whole or in part, following the date of issuance and ending five and one-half years from the date of issuance, at an exercise price of $5.14.

The Company also issued to H.C.

Wainwright and/or its designees warrants

to purchase up to 49,015 ordinary shares.

The warrants issued to H.C.

Wainwright will be exercisable at any time and from time to time, in whole or in part, following the date of issuance and ending five years from the date of the execution of

the Purchase Agreement, at a price per share equal to $6.503125.

The gross proceeds from the offering, before deducting placement agent fees and offering expenses, were approximately $4.25 million.

On June 5, 2019 and June 6, 2019, the Company entered into warrant exercise agreements with certain institutional investors whereby the Company issued warrants to purchase up

to 1,464,665 ordinary shares with an exercise price of $7.50 per share, exercisable from June 5, 2019 or June 6, 2019 until June 5, 2024 or June 6, 2024, respectively.

Additionally, the Company issued warrants to purchase up to 87,880 ordinary

shares, with an exercise price of $9.375 per share, exercisable from June 5, 2019 until June 5, 2024, to certain representatives of H.C.

Wainwright as compensation for its role as the placement agent in our June 2019 warrant exercise agreement

and concurrent private placement of warrants.

On June 12, 2019, the Company entered into a purchase agreement with certain institutional investors for the issuance and sale of 833,334 ordinary shares, par value NIS 0.25

per share, at $6.00 per ordinary share and warrants to purchase up to 416,667 ordinary shares with an exercise price of $6.00 per share, exercisable from June 12, 2019 until December 12, 2024, in a private placement that took place concurrently

with our registered direct offering of ordinary shares in June 2019.

Additionally, the Company issued warrants to purchase up to 50,000 ordinary shares, with an exercise price of $7.50 per share, exercisable from June 12, 2019 until June 10,

2024, to certain representatives of H.C.

Wainwright as compensation for its role as the placement agent in our June 2019 registered direct offering and concurrent private placement of warrants.

On February 10, 2020, the Company closed a “best efforts” public offering whereby the Company issued an aggregate of 5,600,000 of common units and pre-funded units at a public

offering price of $1.25 per common unit and $1.249 per pre-funded unit.

As part of the public offering, the Company entered into a securities purchase agreement with certain institutional purchasers.

Each common unit consisted of one ordinary

share, par value NIS 0.25 per share, and one common warrant to purchase one ordinary share.

Each pre-funded unit consisted of one pre-funded warrant to purchase one ordinary share and one common warrant.

Additionally, the Company issued warrants

to purchase up to 336,000 ordinary shares, with an exercise price of $1.5625 per share, to representatives of H.C.

Wainwright as compensation for its role as the placement agent in the Company’s February 2020 offering.

Equity Offerings in the Third Quarter of 2020

On July 6, 2020 the Company entered into a purchase agreement with certain institutional investors for the issuance and sale of 4,938,278 ordinary shares, par value NIS 0.25

per share, at $1.8225 per ordinary share and warrants to purchase up to 2,469,139 ordinary shares with an exercise price of $1.76 per share, exercisable from July 6, 2020 until January 6, 2026.

Additionally, the Company issued warrants to

purchase up to 296,297 ordinary shares, with an exercise price of $2.2781 per share, exercisable from July 6, 2020 until July 2, 2025, to certain representatives of H.C.

Wainwright as compensation for its role as the placement agent in our July

2020 registered direct offering.

ATM Offering Program

On May 10, 2016, we entered into our Equity Distribution Agreement with Piper Jaffray, pursuant to which we may offer and sell, from time to time, ordinary shares having an

aggregate offering price of up to $25.0 million through Piper Jaffray acting as our agent.

Subject to the terms and conditions of the Equity Distribution Agreement, Piper Jaffray will use its commercially reasonable efforts to sell on our

behalf all of the ordinary shares requested to be sold by us, consistent with its normal trading and sales practices.

Piper Jaffray may also act as principal in the sale of ordinary shares under the Equity Distribution Agreement.

Such sales may

be made under our Form S-3 in what may be deemed “at-the-market” equity offerings as defined in Rule 415 promulgated under the Securities Act, directly on or through the Nasdaq Capital Market, to or through a market maker other than on an

exchange or otherwise, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices, and/or any other method permitted by law, including in privately negotiated transactions.

Piper Jaffray is entitled to compensation at a fixed commission rate of 3% of the gross sales price per share sold through it as agent under the Equity Distribution

Where Piper Jaffray acts as principal in the sale of ordinary shares under the Equity Distribution Agreement, such rate of compensation will not apply, but in no event will the total compensation of Piper Jaffray, when combined with

the reimbursement of Piper Jaffray for the out-of-pocket fees and disbursements of its legal counsel, exceed 8.0% of the gross proceeds received from the sale of the ordinary shares.

We may instruct Piper Jaffray not to sell ordinary shares if the sales cannot be effected at or above the price designated by us in any instruction.

We or Piper Jaffray may suspend an offering of

ordinary shares under the ATM Offering Program upon proper notice and subject to other conditions, as further described in the Equity Distribution Agreement.

Additionally, the ATM Offering Program will terminate on the earlier of (i) the sale

of all ordinary shares subject to the Equity Distribution Agreement, (ii) the date that is three years after a new registration statement on Form S-3 goes effective, (iii) our becoming ineligible to use Form S-3 and (iv) termination of the

Equity Distribution Agreement by the parties.

The Equity Distribution Agreement may be terminated by Piper Jaffray or us at any time on the close of business on the date of receipt of written notice, and by Piper Jaffray at any time in certain

circumstances, including any suspension or limitation on the trading of our ordinary shares on the Nasdaq Capital Market, as further described in the Equity Distribution Agreement.

We temporarily suspended use of the ATM Offering Program on

February 20, 2019 to facilitate our February 2019 “best efforts” public offering.

As of September 30, 2020, we had sold 302,092 ordinary shares under the ATM Offering Program for net proceeds to us of $14.5 million (after commissions, fees and

Additionally, as of that date, we had paid Piper Jaffray compensation of $471 thousand and had incurred total expenses (including such commissions) of approximately $1.2 million in connection with the ATM Offering Program.

Subject to the limitations under Form S-3 due to our public float, we intend to continue using the at-the-market offering or similar continuous offering programs

opportunistically to raise additional funds.

Timwell Private Placement

On March 6, 2018, we entered into an investment agreement with Timwell Corporation Limited, a Hong Kong corporation (“Timwell”), as amended on May 15, 2018 (the “Investment

Agreement”), pursuant to which we agreed, in return for aggregate gross proceeds to us of $20 million, to issue to Timwell an aggregate of 640,000 of our ordinary shares, at a price per share of $1.25.

The Investment Agreement contemplates

issuances in three tranches, including $5 million for 160,000 shares in the first tranche, $10 million for 320,000 shares in the second tranche and $5 million for 160,000 shares in the third tranche.

The first tranche, consisting of $5 million for 160,000 shares, closed on May 15, 2018.

The net aggregate proceeds after deducting commissions, fees and offering expenses in the amount of

approximately $705 thousand were approximately $4.3 million.

The closings of the Second Tranche and Third Tranche were subject to specified closing conditions, including the formation of a joint venture, the signing of a license

agreement and a supply agreement, and the successful production of certain ReWalk products.

The Third Tranche Closing was to have occurred by December 31, 2018 and no later than April 1, 2019.

We believe that Timwell committed various material

breaches of the Investment Agreement, including failure to consummate its second and third investment tranches in the Company for a total of $15 million, failure to enter into a detailed joint venture with the Company, and failure to make

payments for product-related commitments.

Nevertheless, until March 2020 we continued to engage in a dialogue with Timwell (and its affiliate RealCan) on alternative pathways to allow us to commercialize our products in China through RealCan and

its affiliates, and also provide for RealCan or an affiliate to invest in us.

In late March 2020, Timwell notified us that it would not invest the second and third tranches under the Investment Agreement.

In response, in early April 2020, our Board of

Directors also removed Timwell’s designee, who was appointed pursuant to the Investment Agreement, from the Board of Directors, due to this breach pursuant to the terms of the Investment Agreement.

We continue to view China as a market with key

opportunities for products designed for stroke patients, and therefore we continue to evaluate potential relationships with other groups to penetrate the Chinese market.

Cash Flows for the Nine Months Ended September 30, 2020 and September 30, 2019 (in thousands):

Nine Months Ended

September 30,

Net cash used in operating activities

Net cash used in investing activities

Net cash provided by financing activities

Net cash flow

Net Cash Used in Operating Activities

Net cash used in operating activities decreased to $10.1 million for the nine months ended September 30, 2020 compared to $11.2 million for the nine months ended September 30, 2019 primarily due

to reduction in the operating costs.

Net Cash Provided by Financing Activities

Net cash provided by financing activities decreased to $11.9 million for the nine months ended September 30, 2020 compared to $22.0 million provided by financing activities for the nine months

ended September 30, 2019, primarily due to the lower proceeds from equity raise activities in the nine months ended September 30, 2020, than the proceeds we received from equity raise activities for the nine months ended September 30, 2019, as

well as increase in the loan repayments to Kreos.

Obligations and Commercial Commitments

Set forth below is a summary of our contractual obligations as of September 30, 2020.

Payments due by period (in dollars, in thousands)

Contractual obligations

Purchase obligations (1)

Collaboration Agreement and License Agreement obligations (2)

Operating lease obligations (3)

Long-term debt obligations (4)

The Company depends on one contract manufacturer, Sanmina, for both the ReStore products and the SCI Products.

We place our manufacturing orders with Sanmina pursuant to purchase orders

or by providing forecasts for future requirements.

Additionally, we have purchase obligations to our raw material vendors related to the ReStore production, which began in the second quarter of 2019 following regulatory clearance.

Our Collaboration Agreement was originally signed for a period of six years and as of September 30, 2020 has a remaining term of approx.

2.33 years, it requires us to pay in quarterly

installments for the funding of our joint research collaboration with Harvard, subject to a minimum funding commitment under applicable circumstances.

Our License Agreement consists of patent reimbursement expenses payments and of a

license upfront fee payment.

There are also several milestone payments contingent upon the achievement of certain product development and commercialization milestones and royalty payments on net sales from certain patents licensed to

These product development milestones have been met as of September 30, 2020.

There are commercialization milestones which depend on us reaching certain sales amounts some or all of which may not occur.

Our operating leases consist of leases for our facilities and motor vehicles.

Our long-term debt obligations consist of payments of principal and interest under our Loan Agreement with Kreos and the PPP Note.

For more information, see “-Liquidity and Capital

Resources” above.

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 3.441:$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 1.17 euro:$1:00, both of which were the applicable exchange rates as of September 30, 2020.

We calculated the payments due

under our Loan Agreement with Kreos according to the current schedule of repayment of principal and interest.

Off-Balance Sheet Arrangements

We had no off-balance sheet arrangements or guarantees of third-party obligations as of September 30, 2020.

Q UANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes to our market risk during the second quarter of 2020.

For a discussion of our exposure to market risk, please see Part II, Item 7A,

“Quantitative and Qualitative Disclosures About Market Risk” of our 2019 Form 10-K.

*) Less than 10%.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements