What changed in this filing

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Item 1A. Risk Factors

2021-05-11 compared with 2020-11-10 · 74 added, 273 removed, 10 unchanged (97% of the section changed)

1 unchanged sentence

Risk Factors” of our 2020 Form 10-K except as noted below:

Risks Related to an Investment in our Ordinary Shares

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.

The impact of the COVID-19 pandemic 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 Germany where we have key operations, placed significant restrictions on travel, and many businesses announced

extended closures.

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 outbreak has had, and a continuing outbreak or future outbreaks may have, several adverse effects on our business, results of operations and financial condition.

In particular, the steps we have taken to safeguard employees and patients have curtailed direct sales activities, including our ability to

train patients and rehabilitation centers on how to use our system, which has adversely impacted our revenues in 2020.

The overall impact of the limitations on our sales efforts are currently hard to determine because, in addition to the

short-term impacts, we are unable to interact and test our system with potential new patients at the same levels that we have before the COVID-19 outbreak.

It may take an extended period after current restrictions end for us to engage

potential new clients.

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

In addition, we have been unable to repair existing systems with the result that we have had to ship temporary replacement

systems in some cases.

We cannot be certain when social distancing restrictions will be fully lifted and, once they are fully lifted, whether sales of our systems will offset the revenue that we have forgone earlier in the year.

cannot be certain that social distancing restrictions or other measures will not be reinstated in the event of a future outbreak of COVID-19 or similar outbreak.

Production and Supply Chain.

Our manufacturing may 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.

In addition, given the impact of current limitations on our sales activities, it has become hard for us to effectively forecast our future

requirements for systems.

Accordingly, there is a greater risk that we may overproduce or underproduce compared to sales.

Regulatory and clinical trials.

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.

In our postmarket study that we continue to conduct, we

may face decreased ability to contact patients where a patient’s COVID-19 status is unknown.

Regulatory oversight and actions regarding our products have been and may continue to be disrupted or delayed in regions impacted by COVID-19,

including the United States and Europe, which have been and may continue to impact review and approval timelines for products in development and/or changes to existing products that need regulatory review and approval.

Negative impacts on our suppliers and employees .

COVID-19 may impact the health of our employees, directors, partners or customers,

reduce the availability of our workforce or those of companies with which we do business, divert our attention toward succession planning, or create disruptions in our supply or distribution networks.

The adverse effects of such events on us

may include disruption to our operations, or demand for our products in the short and/or long term.

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.

We have concluded that there are substantial doubts as to our ability to continue as a going concern.

As of September 30, 2020, we had an accumulated deficit in the total amount of approximately $179 million and anticipate further losses in the development of our business.

Those factors raise substantial doubt about our ability to continue as a going concern.

Our ability to continue as a going concern depends upon our obtaining the necessary financing to meet our obligations and timely repay our liabilities arising

from normal business operations.

The financial statements have been prepared assuming that we will continue to operate as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of

Our auditors also included an explanatory paragraph to their audit opinion relating to our accompanying consolidated financial statements for the fiscal year ended December 31, 2019 regarding the substantial doubts about the Company’s

ability to continue as a going concern.

If we are unable to secure additional capital, which might also be harder to obtain due to current market conditions and the COVID-19 pandemic, we may be required to take additional measures to reduce costs

in order to conserve our cash in amounts sufficient to sustain operations and meet our obligations.

If we become insolvent, investors in our securities may lose the entire value of their investment in our business.

The accompanying financial

statements do not include any adjustments that may be necessary should we be unable to continue as a going concern, and it is not possible for us to predict at this time the potential success of our business.

We may not have sufficient funds to meet certain future capital requirements, which could impair our efforts to develop and commercialize existing and new

products, and may need to take advantage of various forms of capital-raising transactions, future equity financings, strategic transactions or borrowings may also further dilute our shareholders or place us under restrictive covenants limiting

our ability to operate.

We intend to finance operating costs over the next 12 months with existing cash on hand, continued close examination of our operating spend and potential reduction in

specific areas, issuances of equity and/or debt securities, and other future public or private issuances of securities, or through a combination of the foregoing.

Through equity transactions completed in 2019 and 2020 to date we have raised in

the aggregate approximately $52.7 million in gross proceeds.

However, we will need to seek additional sources of financing if we require more funds than anticipated during the next 12 months or in later periods, including if we cannot raise

sufficient funds from equity issuances.

The alternative capital-raising transactions we may seek may entail significant downsides, due to limitations on use of our Form S-3 and under our at-the-market offering program with Piper Jaffray &

Co., or the ATM Offering Program.

For more information on our inability to use Form S-3, see “Part II.

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Equity Raises.

To raise additional capital in the public markets, including taking into account the limitations on our Form S-3 use above, we will likely be required to seek and are

currently actively seeking other methods, such as a registration statement on Form S-1.

The preparation of a registration statement on Form S-1 is more time-consuming and costly.

We may also conduct fundraising transactions 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, or other equity raise transactions such as equity

lines of credit.

In addition to entailing increased capital costs, any such transactions could result in substantial dilution of our shareholders’ interests, transfer control to a new investor and diminish the value of an investment in our

ordinary shares.

We may also need to pursue strategic transactions, such as joint ventures, in-licensing transactions or the sale of our business or all or substantially all of our assets.

These private financings and strategic transactions have in the past and could in the future require significant management attention, disrupt our business, adversely affect our financial results, be unsuccessful or fail to achieve the desired

We are in discussions routinely with such possible sources of additional funding.

As another alternative, 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.

Agreements governing any borrowing arrangement may contain covenants that

could restrict our operations.

Overall, if we cannot raise the required funds, or cannot raise them on terms acceptable to us or investors, we may be forced to curtail substantially our current operations

or cease operations altogether.

Further, external perceptions regarding our ability to continue as a going concern may make it more difficult for us to obtain financing for the continuation of our operations or require us to obtain financing on

terms that are more favorable to investors, and could result in the loss of confidence by investors and suppliers.

As such, our failure to continue as a going concern could harm our business, operating results and financial position and

severely affect the value of your investment.

While we have regained compliance with the quantitative continued listing rules of the Nasdaq Capital Market, we may not be able to

maintain the listing of our ordinary shares on the Nasdaq Capital Market going forward, which could adversely affect our liquidity and the trading volume and market price of our ordinary shares.

As previously disclosed, on March 24, 2020, we received a notification letter from Nasdaq stating that we failed to comply with the closing bid price requirement of Nasdaq Rule 5550(a) (“Rule

If our closing bid price is less than $1 per share for 30 consecutive business days, we will be deficient with Rule 5550(a).

On May 11, 2020, we received a notice from Nasdaq stating that we have regained compliance with Rule

5550(a) since our share price was above $1 for 10 consecutive business days and that the matter is now closed.

Our closing share price as of November 6, 2020 was $1.15 If we become non-compliant with Rule 5550(a) in the future (absent any

relief, such as the temporary relief imposed by Nasdaq during the ongoing COVID-19 pandemic) and we fail to regain compliance with Rule 5550(a) during the rule’s applicable cure period, Nasdaq will notify us that our ordinary shares are

subject to delisting.

In the case of non-compliance, there can be no assurance that we will be able to regain compliance with the applicable rules.

Additionally, as previously disclosed, in October 2018, we received a notification letter from Nasdaq stating that, under Nasdaq Rule 5550(b), or Rule 5550(b), we failed to

comply with the minimum $35 million market value of listed securities requirement for continued listing on the Nasdaq Capital Market as of October 26, 2018 and did not meet the rule’s alternative $2.5 million shareholders’ equity and $500,000

net income standards as of applicable balance sheet and income statement dates.

We regained compliance with Rule 5550(b) in April 2019.

Our shareholders’ equity was $16.8 million as of September 30, 2020.

However, if our quarterly or annual

report for a subsequent fiscal period does not evidence such compliance, we may become immediately subject to delisting without a cure period.

For example, if we cannot maintain the requisite cash levels for a compliant amount of shareholders’

equity, our ordinary shares may be at serious risk of immediate delisting.

We would be permitted to appeal any delisting determination to a Nasdaq Hearings Panel, and our ordinary shares would remain listed on the Nasdaq Capital Market pending the

panel’s decision after the hearing.

If we do not appeal the delisting determination or do not succeed in such an appeal, our ordinary shares would be removed from trading on the Nasdaq Capital Market.

Any delisting determination could seriously

decrease or eliminate the value of an investment in our ordinary shares and other securities linked to our ordinary shares.

While an alternative listing on an over-the-counter exchange could maintain some degree of a market in our ordinary

shares, we could face substantial material adverse consequences, including, but not limited to, the following:

limited availability for market quotations for our ordinary shares;

reduced liquidity with respect to our ordinary shares;

determination that our ordinary shares are “penny stock” under SEC rules, subjecting brokers trading our ordinary shares to more stringent rules on disclosure and the class of investors to which the broker may sell the ordinary shares;

news and analyst coverage, in part due to the “penny stock” rules;

decreased ability to issue additional securities or obtain additional financing in the future;

and potential breaches under or terminations of our agreements with current or

prospective large shareholders, strategic investors and banks.

The perception among investors that we are at heightened risk of delisting could also negatively affect the market price of our securities and trading volume of our ordinary shares.

We may enter into collaborations, in-licensing arrangements, joint ventures, strategic alliances or partnerships with third-parties that may not result in

the development of commercially viable products or the generation of significant future revenues.

In the ordinary course of our business, we may enter into collaborations, in-licensing arrangements, joint ventures, strategic alliances or partnerships to develop our

products and to pursue new geographic or product markets.

Proposing, negotiating, and implementing collaborations, in-licensing arrangements, joint ventures, strategic alliances or partnerships may be a lengthy and complex process.

identify, secure, or complete any such transactions or arrangements in a timely manner, on a cost-effective basis, on acceptable terms or at all.

We have limited institutional knowledge and experience with respect to these business development

activities, and we may also not realize the anticipated benefits of any such transaction or arrangement.

In particular, these collaborations may not result in the development of products that achieve commercial success or result in significant

revenues and could be terminated prior to developing any products.

For example, we have entered into agreements with MediTouch and Myolyn for the distribution of their products in the U.S., as well as arrangements with Yaskawa Electric

Corporation, or Yaskawa for the distribution of our products in certain Asian markets.

We also collaborate with Harvard University’s Wyss Institute for Biologically Inspired Engineering for the research, design, development and

commercialization of lightweight exoskeleton system technologies for lower limb disabilities, aimed to treat stroke, multiple sclerosis, mobility limitations for the elderly and other medical applications.

Our arrangements with MediTouch,

Myolyn, Yaskawa and Harvard, may not be as productive or successful as we hope.

Additionally, as we pursue these arrangements and choose to pursue other collaborations, in-licensing arrangements, joint ventures, strategic alliances or partnerships in the

future, we may not be in a position to exercise sole decision making authority regarding the transaction or arrangement.

This could create the potential risk of creating impasses on decisions, and our collaborators may have economic or business

interests or goals that are, or that may become, inconsistent with our business interests or goals.

It is possible that conflicts may arise with our collaborators.

Our collaborators may act in their self-interest, which may be adverse to our

best interest, and they may breach their obligations to us.

Any such disputes could result in litigation or arbitration which would increase our expenses and divert the attention of our management.

Further, these transactions and arrangements

are contractual in nature and may be terminated or dissolved under the terms of the applicable agreements.

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

We have contracted with Sanmina Corporation, a well-established contract manufacturer with expertise in the medical device industry, for the manufacture of all of our

products and the sourcing of all of our components and raw materials.

Pursuant to this contract, Sanmina manufactures ReWalk and ReStore, pursuant to our specifications, at its facility in Ma’alot, Israel.

We may terminate our relationship with

Sanmina at any time upon written notice.

In addition, either we or Sanmina may terminate the relationship in the event of a material breach, subject to a 30-day cure period.

For our business strategy to be successful, Sanmina must be able to

manufacture our products in sufficient quantities, in compliance with regulatory requirements and quality control standards, in accordance with agreed upon specifications, at acceptable costs and on a timely basis.

Increases in our product

sales, whether forecasted or unanticipated, could strain the ability of Sanmina to manufacture an increasingly large supply of our current or future products in a manner that meets these various requirements.

In addition, although we are not

restricted from engaging an alternative manufacturer, and potentially have the capabilities to manufacture our products in-house, the process of moving our manufacturing activities would be time consuming and costly, and may limit our ability

to meet our sales commitments, which could harm our reputation and could have a material adverse effect on our business.

We also rely on third-party suppliers, which contract directly with Sanmina, to supply certain components of our products, and in some cases we purchase these components

Sanmina does not have long-term supply agreements with most of its suppliers and, in many cases, makes purchases on a purchase order basis.

Sanmina’s ability to secure adequate quantities of such products may be limited.

may encounter problems that limit their ability to manufacture components for our products, including financial difficulties or damage to their manufacturing equipment or facilities.

If Sanmina fails to obtain sufficient quantities of high

quality components to meet demand on a timely basis, we could lose customer orders, our reputation may be harmed and our business could suffer.

Our results of operations and liquidity could be adversely impacted by supply chain disruptions and operational challenges faced by our manufacturer or suppliers.

generally uses a small number of suppliers for ReWalk and ReStore.

Depending on a limited number of suppliers exposes us to risks, including limited control over pricing, availability, quality and delivery schedules.

Such risks are heightened

in light of the interruptions in supply chains and distribution networks related to the COVID-19 pandemic.

If any one or more of our suppliers ceases to provide sufficient quantities of components in a timely manner or on acceptable terms,

Sanmina would have to seek alternative sources of supply.

It may be difficult to engage additional or replacement suppliers in a timely manner.

Failure of these suppliers to deliver products at the level our business requires would limit our

ability to meet our sales commitments, which could harm our reputation and could have a material adverse effect on our business.

Sanmina also may have difficulty obtaining similar components from other suppliers that are acceptable to the FDA

or other regulatory agencies, and the failure of Sanmina’s suppliers to comply with strictly enforced regulatory requirements could expose us to regulatory action including warning letters, product recalls, termination of distribution, product

seizures or civil penalties.

It could also require Sanmina to cease using the components, seek alternative components or technologies and we could be forced to modify our products to incorporate alternative components or technologies, which

could result in a requirement to seek additional regulatory approvals.

Any disruption of this nature or increased expenses could harm our commercialization efforts and adversely affect our operating results.

Risks Related to Our Business and Our Industry

Defects in our products or the software that drives them could adversely affect the results of our operations.

The design, manufacture and marketing of our products involve certain inherent risks.

Manufacturing or design defects, unanticipated use of ReWalk or ReStore, or inadequate

disclosure of risks relating to the use of our products can lead to injury or other adverse events.

In addition, because the manufacturing of our products is outsourced to Sanmina, our original equipment manufacturer, we may not be aware of

manufacturing defects that could occur.

Such adverse events could lead to recalls or safety alerts relating to our products (either voluntary or required by the FDA or similar governmental authorities in other countries), and could result, in

certain cases, in the removal of our products from the market.

A recall could result in significant costs.

To the extent any manufacturing defect occurs, our agreement with Sanmina contains a limitation on Sanmina’s liability, and therefore we

could be required to incur the majority of related costs.

Product defects or recalls could also result in negative publicity, damage to our reputation or, in some circumstances, delays in new product approvals.

When an exoskeleton is used by a paralyzed individual to walk, the individual relies completely on the exoskeleton to hold him or her upright.

In addition, our products incorporate sophisticated

computer software.

Complex software frequently contains errors, especially when first introduced.

Our software may experience errors or performance problems in the future.

If any part of our product’s hardware or software were to fail, the user

could experience death or serious injury.

For example, ReWalk recently submitted medical device reports, or MDRs, to the FDA and medical device vigilance reports, or MDVs, to the European regulatory authorities and initiated a correction in

response to two complaints regarding battery thermal runaway events.

The correction that includes clarified use instructions and information on battery information and storage is currently being implemented in the United States and in Europe.

Additionally, users may not use our or maintain our products in accordance with safety, storage, and training protocols, which could enhance the risk of death or injury.

Any such occurrence could cause delay in market acceptance of our

products, damage to our reputation, additional regulatory filings, product recalls, increased service and warranty costs, product liability claims and loss of revenue relating to such hardware or software defects.

The medical device industry has historically been subject to extensive litigation over product liability claims.

We have been and anticipate that as part of our ordinary course

of business we may be, subject to product liability claims alleging defects in the design, manufacture, or labeling of our products.

A product liability claim, regardless of its merit or eventual outcome, could result in significant legal defense

costs and high punitive damage payments.

Although we maintain product liability insurance, the coverage is subject to deductibles and limitations, and may not be adequate to cover future claims.

Additionally, we may be unable to maintain our

existing product liability insurance in the future at satisfactory rates or adequate amounts.

Risks Related to Government Regulation

We have submitted medical device reports, or MDRs, to the FDA (and equivalent authorities outside of the United States) for numerous serious injuries

relating to use of the ReWalk Personal system, and conducted a voluntary correction related to certain use instructions in the device’s labeling, which the FDA classified as a Class II recall.

If our product may have caused or contributed to a

death or a serious injury, or if our product malfunctioned and the malfunction’s recurrence would be likely to cause or contribute to a death or serious injury, we must comply with the FDA’s MDR regulations (and equivalent authorities outside

of the United States), which could result in voluntary corrective actions or enforcement actions, such as mandatory recalls.

Under the FDA’s MDR regulations, we are required to report to the FDA information that reasonably suggests a product we market may have caused or contributed to a death or

serious injury or malfunctioned and our product or a similar device marketed by us would be likely to cause or contribute to death or serious injury if the malfunction were to recur.

In addition, all manufacturers placing medical devices on the

market in the European Union are legally bound to report any serious or potentially serious incidents involving devices they produce or sell to the relevant authority in whose jurisdiction the incident occurred.

Between 2013 and 2017, we

submitted a number of MDRs to the FDA to report incidents in which ReWalk Personal users sustained falls or fractures.

The FDA sent us letters requesting additional information relating to these MDRs submitted in 2017, including a request for a

failure analysis.

In August 2017, we initiated a voluntary correction for the ReWalk device that related to certain use instructions to reduce the risk of tibia/fibula fractures and submitted a report to the FDA under 21 CFR Part 806.

Part 806, manufacturers and importers are required to make a report to the FDA of any correction or removal of a device if the correction or removal was initiated to reduce a risk to health posed by the device or to remedy a violation of the

Federal Food, Drug, and Cosmetic Act caused by the device that may present a risk to health.

In June 2018, we received a letter from the FDA agreeing with our decision to initiate a corrective action for the ReWalk, classifying the recall action as a Class II recall,

and requesting that we make regular status reports to the FDA regarding our progress.

While the FDA has statutory authority to require a recall, most recalls are undertaken voluntarily when a medical device is defective, when it could present a

risk to health, or when it is both defective and presents a risk to health.

In January 2019, we submitted a recall termination request to the FDA.

In November 2019 the FDA informed us that it considered the recall action terminated.

2018, we submitted to the FDA revised labeling that incorporates the revised use instructions intended to prevent the tibia/fibula fractures as a special 510(k).

The special 510(k) was not accepted by FDA because it was administratively

incomplete, and we withdrew the submission.

In January 2020 we submitted a new 510(k) to the FDA for both the revised labeling/use instructions and additional changes to the device.

This new 510(k) was not accepted by FDA because it was

administratively incomplete and, accordingly, FDA notified ReWalk on January 22, 2020 of the Refuse-to-Accept (RTA) designation.

The company was in communication with the FDA and has resubmitted an updated 510(k) in February 2020 which was

cleared on May 27, 2020.

In September 2019, we also submitted a revised technical file with the additional device changes to the EU notified body and were notified in December 2019 that the extension of our certification had been granted.

In 2018, we submitted additional MDRs for tibia/fibula fractures that occurred in foreign countries between 2015 and 2018.

In addition, in 2018 and 2019 we submitted MDRs for

tibia/fibula fractures that occurred in the United States and Europe.

In 2020 we submitted an MDR for tibial fractures that occurred in the United States.

Additional fractures or other adverse events may occur in the future that may require us

to report to the FDA pursuant to the MDR regulations (or other governmental authorities pursuant to equivalent outside of the United States regulations), and/or to initiate a removal, correction, or other action.

Any adverse event involving our

products could result in future voluntary corrective actions, such as recalls or customer letters, or in an FDA enforcement action, such as a mandatory recall, notification to healthcare professionals and users, warning letter, seizure,

injunction or import alert.

In addition, failure to report such adverse events to appropriate government authorities on a timely basis, or at all, could result in enforcement action against us.

Any action, whether voluntary or involuntary, as

well as defending ourselves in a lawsuit, will require financial resources and distract management, and may harm our reputation and financial results.

While we addressed the observations that the FDA cited in a 2015 warning letter related to our mandatory post-market surveillance study and initiated the study, we are currently

experiencing enrollment issues that make our study progress inadequate and our modified protocol (intended to overcome the enrollment issues so that we may complete the study, as required) has not yet been approved by FDA.

Going forward, if we

cannot meet certain FDA requirements and enrollment criteria for the study or otherwise satisfy FDA requests promptly, or if our study produces unfavorable results, we could be subject to additional FDA warnings letters or more significant

enforcement action, which could materially and adversely affect our commercial success.

While we addressed the observations that the FDA cited in a 2015 warning letter related to our mandatory post-market surveillance study and initiated the study,

we are currently experiencing enrollment issues that make our study progress inadequate and our modified protocol (intended to overcome the enrollment issues so that we may complete the study, as required) has not yet been approved by FDA.

forward, if we cannot meet certain FDA requirements and enrollment criteria for the study or otherwise satisfy FDA requests promptly, or if our study produces unfavorable results, we could be subject to additional FDA warnings letters or more

significant enforcement action, which could materially and adversely affect our commercial success.

We are conducting an ongoing mandatory FDA postmarket surveillance study on our ReWalk Personal 6.0, which began in June 2016.

Before we began the current study, the FDA sent

us a warning letter on September 30, 2015, (“the September 2015 Warning Letter”), threatening potential regulatory action against us for violations of Section 522 of the U.S.

Federal Food, Drug, and Cosmetic Act, based on our failure to

initiate a postmarket surveillance study by the September 28, 2015 deadline, our allegedly deficient protocol for that study, and the lack of progress and communication regarding the study.

Between June 2014 and our receipt of the September

2015 Warning Letter, we had responded late to certain of the FDA’s requests related to our study protocol.

In February 2016, the FDA sent us an additional information request, or the February 2016 Letter, requesting additional changes to our

study protocol and asking that we amend the study within 30 days.

This letter also discussed the FDA’s request, as further discussed in later communications with the FDA, for a new premarket notification for our ReWalk device, or a special

510(k), linked to what the FDA viewed as changes to the labeling and the device, including to a computer included with the device.

In late March 2016, following multiple discussions with the FDA, including an in-person meeting, the FDA

confirmed that the agency would permit the continued marketing of the ReWalk device conditioned upon our timely submitting a special 510(k) and initiating our postmarket surveillance study by June 1, 2016.

The special 510(k) was timely

submitted on April 8, 2016, and the FDA’s substantial equivalence determination was received by us on July 22, 2016, granting us permission to continue marketing the ReWalk device.

Additionally, we submitted a protocol to the FDA for the

postmarket surveillance study that was approved by the FDA on May 5, 2016.

Before we began the current study, the FDA sent us a

warning letter on September 30, 2015 (“the September 2015 Warning Letter”), threatening potential regulatory action against us for violations of Section 522 of the U.S.

Federal Food, Drug, and Cosmetic Act, based on our failure to initiate a

postmarket surveillance study by the September 28, 2015 deadline, our allegedly deficient protocol for that study and the lack of progress and communication regarding the study.

Between June 2014 and our receipt of the September 2015 Warning Letter,

we had responded late to certain of the FDA’s requests related to our study protocol.

In February 2016, the FDA sent us an additional information request, or the February 2016 Letter, requesting additional changes to our study protocol and asking

that we amend the study within 30 days.

This letter also discussed the FDA’s request, as further discussed in later communications with the FDA, for a new premarket notification for our ReWalk device, or a special 510(k), linked to what the FDA

viewed as changes to the labeling and the device, including to a computer included with the device.

In late March 2016, following multiple discussions with the FDA, including an in-person meeting, the FDA confirmed that the agency would permit the

continued marketing of the ReWalk device conditioned upon our timely submitting a special 510(k) and initiating our postmarket surveillance study by June 1, 2016.

The special 510(k) was timely submitted on April 8, 2016, and the FDA’s substantial

equivalence determination was received by us on July 22, 2016, granting us permission to continue marketing the ReWalk device.

Additionally, we submitted a protocol to the FDA for the postmarket surveillance study that was approved by the FDA on May 5, 2016.

We began the study on June 13, 2016, with Stanford University as the lead investigational site.

In August 2016, the FDA sent us a letter stating that, based on its evaluation of our

corrective and preventive actions in response to the September 2015 Warning Letter, it appeared we had adequately addressed the violations cited in the September 2015 Warning Letter.

As part of our study, we provided the FDA with the

required periodic reports on the study’s progress, in a few cases with delay, and we intend to continue providing the FDA with periodic reports as required.

Through these reports, we made the FDA aware that due to enrollment issues, we were

unable to satisfy the target enrollment specified in the original study protocol.

As of September 30, 2020, we had three active centers participating in the study (one site is closed and another site is on hold), but only two sites have

successfully enrolled patients.

Twelve subjects have enrolled in the study, two have completed the study, and three are using the device in the community.

This is substantially below the required number of patients included in our original

study protocol.

In March 2020, FDA approved a modified postmarket study protocol that will supplement data from the clinical study with real-world evidence and the study status was updated

to progress adequate in September 2020.

ReWalk is actively collecting the real-world evidence in order to fulfill the postmarket study order requirements.

However, despite the revised study protocol there can be no assurance that we will be

able to satisfy the post-market study requirements.

Additionally, we are experiencing some study disruptions due to COVID-19 pandemic If we cannot meet FDA requirements for the post-market study or timely address requests from the FDA related

to the study, or if the results of the study are not as favorable as we expect, the FDA may issue additional warning letters to us, impose limitations on the labeling of our device or require us to stop marketing the ReWalk Personal device in

the United States.

We derived 41.4% of our revenues in the year ended December 31, 2019 from sales of the ReWalk device in the United States and, if we are unable to market the ReWalk device in the United States, we expect that these sales

would be adversely impacted, which could materially adversely affect our business and overall results of operations.

U NREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In August 2016, the FDA sent us a letter stating that, based on its evaluation of

our corrective and preventive actions in response to the September 2015 Warning Letter, it appeared we had adequately addressed the violations cited in the September 2015 Warning Letter.

As part of our study, we provided the FDA with the required

periodic reports on the study’s progress, in a few cases with delay, and we intend to continue providing the FDA with periodic reports as required.

Through these reports, we made the FDA aware that due to enrollment issues, we were unable to satisfy

the target enrollment specified in the original study protocol.

As of March 6, 2021, the study has been closed.

Twelve subjects were enrolled in the study, three completed the study and one was using the device at the time the study was closed.

was substantially below the required number of patients included in our original study protocol.

In March 2021, FDA accepted another protocol supplement to the original postmarket study that we prepared to address our inability to obtain certain study information due to the

COVID-19 pandemic.

Our modification to the original protocol allowed us to close all study sites.

The data from the original postmarket study, along with the real world data, will be submitted to FDA.

However, despite the revised study protocol

there can be no assurance that we will be able to satisfy the post-market study requirements.

If we cannot meet FDA requirements for the post-market study or timely address requests from the FDA related to the study, or if the results of the study

are not as favorable as we expect, the FDA may issue additional warning letters to us, impose limitations on the labeling of our device or require us to stop marketing the ReWalk Personal device in the United States.

We derived 40% of our revenues in

the year ended December 31, 2020 from sales of the ReWalk device in the United States and, if we are unable to market the ReWalk device in the United States, we expect that these sales would be adversely impacted, which could materially adversely

affect our business and overall results of operations.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

There are no transactions that have not been previously included in a Current Report on Form 8-K.

4 unchanged sentences

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What changed 10-Q

Item 1A. Risk Factors