What changed in this filing

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Item 7. Management’s Discussion and Analysis

2022-02-24 compared with 2021-02-18 · 669 added, 507 removed, 93 unchanged (93% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with “Part I.

Selected Financial Data” and our consolidated financial statements and

the related notes included elsewhere in this annual report.

This discussion contains forward-looking statements that are based on our management’s current expectations, estimates and projections for our business, which are subject to a number of risks

and uncertainties.

Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Special Note Regarding Forward-Looking Statements and “Part I.

The following discussion and analysis should

be read in conjunction with our audited consolidated financial statements and the related notes included elsewhere in this annual report.

This discussion contains forward-looking statements that are based on our management’s current expectations, estimates and projections

for our business, which are subject to a number of risks and uncertainties.

Our actual results may differ materially from those anticipated

in these forward-looking statements as a result of many factors, including those set forth under “Special Note Regarding Forward-Looking

Statements and “Part I.

Risk Factors.”

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

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.

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 and other personal sales.

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.

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.

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 and other personal sales.

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.

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 countries.

we have a direct sales operation in Germany and the United Kingdom and work with distribution partners in certain other major countries.

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.

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.

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.

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 December 31, 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.

During the year 2020 we announced several new agreements with German SHIs such as TK and DAK Gesundheit and others as well as the first German Private Health Insurer (“PHI”) that have chosen to enter into an agreement that outlines the process of

obtaining a device for eligible insured patient.

We are currently working with several additional SHIs and PHIs on securing a formal operating contract that will establish the process of obtaining a ReWalk Personal 6.0 device for their beneficiaries

within their system.

During the second quarter of 2020 we 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.

As of December 31, 2021, we had placed 25 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.

During the year 2020 we announced several new agreements with

German SHIs such as TK and DAK Gesundheit and others as well as the first German Private Health Insurer (“PHI”) that have

chosen to enter into an agreement that outlines the process of obtaining a device for eligible insured patient.

We are currently working

with several additional SHIs and PHIs on securing a formal operating contract that will establish the process of obtaining a ReWalk Personal

6.0 device for their beneficiaries within their system.

During the second quarter of 2020 we 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

rehabilitation clinics and personal sales through the 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.

We have incurred net losses and negative cash flow from operations since inception and anticipate this to continue in

the near term.

We will continue to evaluate spending while continuing to focus resources on activities to commercialize the Restore device for stroke patients, achieving additional commercial reimbursement coverage decisions for our ReWalk Personal

device, continued research and development activities related mainly to our product line maintenance as well as our soft exo-suit design and activities related to our FDA 522 postmarket study.

For information on the effects to our Company from the ongoing COVID-19 pandemic, see “Part I, Item 1.

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.

We have incurred net losses and negative cash

flow from operations since inception and anticipate this to continue in the near term.

We will continue to evaluate spending while continuing

to focus resources on activities to commercialize the Restore device for stroke patients, achieving additional commercial reimbursement

coverage decisions for our ReWalk Personal device, continued research and development activities related mainly to our product line maintenance

as well as our soft exo-suit design and activities related to our FDA 522 postmarket study.

For information on the effects to our Company from the ongoing

COVID-19 pandemic, see “Part I, Item 1.

Business—Evolving COVID-19 Pandemic.”

Components of Our Statements of Operations

We currently rely, and in the future will rely, on sales and rentals of our ReWalk Personal 6.0 device, our ReStore device, additional devices such as MyoCycle and MediTouch which we are distributing

(“Distributed Products”) and related service contracts and extended warranties for our revenue.

Our revenue is generated from a combination of third-party payors, institutions, and self-payors, including private and government employers.

our products by third party payors have been made primarily through case-by-case determinations.

Third-party payors include, without limitation, private insurance plans and managed care programs, government programs including the VA, and worker’s

compensation payments.

We expect that third-party payors will be an increasingly important source of revenue in the future as well as clinics that will be interested in the ReStore device.

In December 2015, 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.

All of our ReWalk Personal and ReWalk Rehabilitation systems sold until the end of 2017 were covered by a two-year warranty from the date of purchase, which is included in the purchase price.

customers the ability to purchase, any time during the initial warranty period, an extended warranty for up to three additional years.

Both warranties cover all elements of the systems, including the batteries, other than normal wear and tear.

beginning of 2018, we updated our service policy for new devices sold to include a five-year warranty.

We currently rely, and in the future will rely, on sales and rentals

of our ReWalk Personal 6.0 device, our ReStore device, additional devices such as MyoCycle and MediTouch which we are distributing (“Distributed

Products”) and related service contracts and extended warranties for our revenue.

Our revenue is generated from a combination of

third-party payors, institutions, and self-payors, including private and government employers.

Payments for our products by third party

payors have been made primarily through case-by-case determinations.

Third-party payors include, without limitation, private insurance

plans and managed care programs, government programs including the VA, and worker’s compensation payments.

We expect that third-party

payors will be an increasingly important source of revenue in the future as well as clinics that will be interested in the ReStore device.

In December 2015, 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.

All of our ReWalk Personal and ReWalk Rehabilitation systems are

covered by a five-year warranty from the date of purchase, which is included in the purchase price.

We offer customers the ability to

purchase, any time during the initial warranty period, an extended warranty for up to three additional years.

Both warranties cover all

elements of the systems, including the batteries, other than normal wear and tear.

Our ReStore device is sold with a two-year warranty.

The Distributed Products warranty ranges between one year to ten years depending on the

specific product and part.

Cost of Revenues and Gross Profit

Cost of revenue consists primarily of systems purchased from our outsourced manufacturer, Sanmina, salaries, personnel costs including non-cash share-based compensation, associated with manufacturing

and inventory management, training and inspection, warranty and service costs, shipping and handling and manufacturing startup and transition costs.

Cost of revenues also includes royalties and expenses related to royalty-bearing research and

development grants and sales and marketing grants.

Our gross profit and gross margin as a percentage of sales is influenced by a number of factors, including primarily the volume and price of our products sold and fluctuations in our

cost of revenues.

We expect gross profit as a percentage of sales will improve in the future as we increase our sales volumes and decrease the product manufacturing costs.

Warranties for our Distributed Products warranty ranges between one year to ten years depending on the specific product and part.

Cost of Revenues and Gross

Cost of revenue consists primarily of systems purchased from our outsourced manufacturer,

Sanmina, salaries, personnel costs including non-cash share-based compensation, associated with manufacturing and inventory management,

training and inspection, warranty and service costs, shipping and handling and inventory write off expenses.

Cost of revenues also includes

royalties and expenses related to royalty-bearing research and development grants.

Our gross profit and gross margin as a percentage of sales is influenced

by a number of factors, including primarily the volume and price of our products sold and fluctuations in our cost of revenues.

gross profit and gross margin as a percentage of sales will improve in the future as we increase our sales volumes and decrease the product

manufacturing costs.

Operating Expenses

Research and Development Expenses, Net

Research and development expenses, net consist primarily of salaries, related personnel costs including share-based compensation, supplies, materials and consulting expenses related to product design

and development, clinical studies, regulatory submissions, patent costs, sponsored research costs and other expenses related to our product development and research programs.

Research and development expenses, net consist primarily of salaries,

related personnel costs including share-based compensation, supplies, materials and consulting expenses related to product design and

development, clinical studies, regulatory submissions, patent costs, sponsored research costs and other expenses related to our product

development and research programs.

We expense all research and development expenses as they are incurred.

Research and development expenses are presented net of the amount of any grants we receive for research and development in the period in which we receive the grant.

We previously

received grants and other funding from the BIRD Foundation and the Israel Innovation Authority, or “IIA” (formerly known as the Office of the Chief Scientist).

Certain of those grants require us to pay royalties on sales of ReWalk systems, which are

recorded as cost of revenues.

We may receive additional funding from these entities or others in the future.

Research and development expenses are presented net of the amount

of any grants we receive for research and development in the period in which we receive the grant.

We previously received grants and other

funding from the Israel Innovation Authority, (formerly known as the Office of the Chief Scientist) (“IIA”).

Certain of those

grants require us to pay royalties on sales of certain systems, which are recorded as cost of revenues.

We may receive additional funding

from these entities or others in the future.

See “Grants and Other Funding” below.

Sales and Marketing Expenses

Our sales and marketing expenses consist primarily of salaries, related personnel costs including share-based compensation for sales, marketing and reimbursement personnel, travel, marketing,

advertisement, public relations activities, and consulting costs.

Also included in the sales and marketing expenses are the costs associated with our reimbursement activities in the United States and Germany.

Our sales and marketing expenses consist primarily of salaries,

related personnel costs including share-based compensation for sales, sales support, marketing and reimbursement personnel, travel, marketing,

advertisement, tradeshows and conferences activities, public relations activities, and consulting costs.

Also included in the sales and

marketing expenses are the costs associated with our reimbursement activities in the United States and Germany.

General and Administrative Expenses

Our general and administrative expenses consist primarily of salaries, related personnel costs including share-based compensation for our administrative, finance, and general management personnel,

professional services, and insurance.

Financial Income (Expenses), Net

Financial income and expenses consist of bank commissions, foreign exchange gains and losses, interest earned on investments in short term deposits, interest expenses related to the

Loan Agreement with kreos..

Interest income consists of interest earned on our cash and cash equivalent balances.

Interest expense consists of interest accrued on, and certain other costs with respect to any

indebtedness.

Foreign currency exchange changes reflect gains or losses related to transactions denominated in currencies other than the U.S.

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 $20.0 million.

In connection with the Loan Agreement we

issued to Kreos a warrant to purchase up to 4,771 of our ordinary shares at an exercise price of $241.00 as we drew down $12.0 million under the Loan Agreement, which amount was increased to 6,679 ordinary shares upon an additional drawdown of $8.0

On June 9, 2017, $3.0 million of the outstanding principal amount was extended by an additional three years with the same interest rate and became subject to repayment in accordance with, and subject to the terms of a secured convertible

Our general and administrative expenses consist primarily of salaries,

related personnel costs including share-based compensation for our administrative, finance, and general management personnel, professional

services, and insurance.

Financial Expenses (Income), Net

Financial income and expenses consist of bank commissions, foreign

exchange gains and losses, interest earned on investments in short term deposits, interest expenses related to the Loan Agreement (as

defined below) with Kreos (as defined below).

Interest income consists of interest earned on our cash and cash

equivalent balances.

Interest expense consists of interest accrued on, and certain other costs with respect to any indebtedness.

currency exchange changes reflect gains or losses related to transactions denominated in currencies other than the U.S.

On December 30, 2015, we entered into a Loan Agreement (the “Loan Agreement”)

with Kreos Capital V (Expert Fund) Limited (“Kreos”) pursuant to which Kreos extended a line of credit to us in the amount

of $20.0 million.

In connection with the Loan Agreement, we issued to Kreos a warrant to purchase up to 4,771 of our ordinary shares at

an exercise price of $241.00 as we drew down $12.0 million under the Loan Agreement, which amount was increased to 6,679 ordinary shares

upon an additional drawdown of $8.0 million.

On June 9, 2017, $3.0 million of the outstanding principal amount was extended by an additional

three years with the same interest rate and became subject to repayment in accordance with, and subject to the terms of a secured convertible

promissory note (the “Kreos Convertible Note”).

On November 20, 2018, 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.

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 $241.00 to $7.50.

On December 29, 2020, the Company repaid in full the remaining loan principal amount to Kreos including the end of loan payments, and by that discharged all

of its obligations to Kreos.

For further discussion of the Loan Agreement with Kreos, see “-Liquidity and Capital Resources” below and also Note 6 to our audited consolidated financial statements below.

On November 20, 2018, we 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.

We repaid Kreos the $3.6 million by issuing to Kreos 192,000 units

(each unit consisting of one ordinary share and one warrant to purchase one ordinary share) and 288,000 pre-funded units (each pre-funded

unit consisting of one pre-funded warrant to purchase one ordinary share and one warrant to purchase one ordinary share) at the a public

offering price of $0.30 and $0.29, respectively, 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 our public offering.

We and Kreos also agreed to revise the principal and the repayment schedule under the Kreos Loan Agreement.

Additionally, we entered into the Kreos Warrant Amendment with Kreos, which amended the exercise price of the warrant to purchase 6,679

ordinary shares currently held by Kreos from $241.00 to $7.50.

On December 29, 2020, we repaid in full the remaining loan principal amount

to Kreos including the end of loan payments, and by that discharged all of our obligations to Kreos.

For further discussion of the Loan Agreement with Kreos, see “-Liquidity

and Capital Resources” below and also Note 6 to our audited consolidated financial statements below.

Taxes on Income

As of December 31, 2020, we had not yet generated taxable income in Israel.

As of that date, our net operating loss carry forwards for Israeli tax purposes amounted to approximately $182.4 million and

our net operating loss carry forwards for U.S.

tax purposes amounted to approximately $291 thousands After we utilize our net operating loss carry forwards, we are eligible for certain tax benefits in Israel under the Law for the Encouragement of

Capital Investments, 1959.

Our benefit period currently ends ten years after the year in which we first have taxable income in Israel provided that the benefit period will not extend beyond 2024.

Our taxable income generated outside of Israel will be subject to the regular corporate tax rate in the applicable jurisdictions.

As a result, our effective tax rate will be a

function of the relative proportion of our taxable income that is generated in those locations compared to our overall net income.

As of December 31, 2021, we had not yet generated taxable

income in Israel.

As of that date, our net operating loss carry forwards for Israeli tax purposes amounted to approximately $205.8 million

and our net operating loss carry forwards for U.S.

tax purposes amounted to approximately $74 thousand.

After we utilize our net operating

loss carry forwards, we are eligible for certain tax benefits in Israel under the Law for the Encouragement of Capital Investments, 1959.

Our benefit period currently ends ten years after the year in which we first have taxable income in Israel provided that the benefit period

will not extend beyond 2024.

Our taxable income generated outside of Israel will be subject

to the regular corporate tax rate in the applicable jurisdictions.

As a result, our effective tax rate will be a function of the relative

proportion of our taxable income that is generated in those locations compared to our overall net income.

Grants and Other Funding

Israel Innovation Authority (formerly known as Office of the Chief Scientist)

From our inception through December 31, 2020, we have received a total of $1.97 million in funding from the IIA, $1.57 million of which are royalty-bearing grants, while $400 thousand were received in

consideration for an investment in our preferred shares.

Out of the royalty-bearing grants received, we have paid royalties to the IIA in the total amount of $88 thousand.

The agreements with IIA require us to pay royalties at a rate of 3% on sales

of ReWalk systems and related services up to the total amount of funding received, linked to the dollar, and bearing interest at an annual rate of LIBOR applicable to dollar deposits.

If we transfer IIA-supported technology or know-how outside of

Israel, we will be liable for additional payments to IIA depending upon the value of the transferred technology or know-how, the amount of IIA support, the time of completion of the IIA-supported research project and other factors.

As of December 31,

2020, the aggregate contingent liability to the IIA was $1.6 million.

Israel Innovation Authority (formerly known as

the Office of the Chief Scientist)

From our inception through December 31, 2021, we have received

a total of $1.97 million in funding from the IIA, $1.57 million of which are royalty-bearing grants, while $400 thousand were received

in consideration for an investment in our preferred shares.

Out of the royalty-bearing grants received, we have paid royalties to the

IIA in the total amount of $99 thousand.

The agreements with IIA require us to pay royalties at a rate of 3% on sales of certain systems

and related services up to the total amount of funding received for the development of these systems, linked to the dollar, and bearing

interest at an annual rate of LIBOR applicable to dollar deposits.

If we transfer IIA-supported technology or know-how outside of Israel,

we will be liable for additional payments to IIA depending upon the value of the transferred technology or know-how, the amount of IIA

support, the time of completion of the IIA-supported research project and other factors.

As of December 31, 2021, the aggregate contingent

liability to the IIA was $1.5 million.

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

Risk Factors-We have received Israeli government grants for certain of our research and development activities and we may receive

additional grants in the future.

The terms of those grants restrict our ability to manufacture products or transfer technologies outside of Israel...”

Risk Factors-We have received Israeli government

grants for certain of our research and development activities and we may receive additional grants in the future.

The terms of those grants

restrict our ability to manufacture products or transfer technologies outside of Israel and we may be required to pay penalties in such

cases or upon the sale of our company.”

Results of Operations

Year Ended December 31, 2020 Compared to Year Ended December 31, 2019

Our revenues for 2020 and 2019 were as follows (dollars in thousands, except unit amounts)

Year Ended December 31, 2021 Compared

to Year Ended December 31, 2020

Our revenues for 2021 and 2020 were as follows (dollars in thousands,

except unit amounts)

Years Ended December 31,

1 unchanged sentence

Rehabilitation unit revenues

Revenues decreased by $480 thousand, or 10%, during 2020 compared to 2019.

The decrease in revenues for was driven primarily by the impact of the COVID-19 pandemic, as we had limited

market access which resulted in volume reduction of our Personal 6.0 devices.

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.

Personal unit revenues consist of ReWalk Personal 6.0 and Distributed

Products sale, rental, service and warranty revenue for individual use.

Rehabilitation unit revenues consist of ReStore, Distributed Products

and SCI Products sale, rental, service and warranty revenue to clinics and hospitals for treating patients with relevant medical conditions

or for usage by medical academic centers.

Revenues increased by $1.6 million, or 36%, during 2021 compared

The increase was driven primarily by higher number of rehabilitation units sold in the Unites States including a multiple unit

order to a medical academic center as well as an increase in personal unit revenues in Germany as we have seen reduced COVID-19 restrictions.

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 2021 and 2020 were as follows (in thousands):

Years Ended December 31,

Gross profit was 50% of revenue for 2020, compared to gross profit of 56% of revenue for 2019.

Our gross profit declined as our volume reduced due to the impact from COVID-19 (as

discussed under “Evolving COVID-19 Pandemic” and higher inventory write-off of our older designs that have reached end of production offset with increase in our average selling price.

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, Net

Our research and development expenses, net for 2020 and 2019 were as follows (in thousands):

Gross profit was 49% of revenue for 2021, compared to a gross profit of 50% of revenue for 2020.

Our gross profit declined because of

a higher inventory write-off of ReStore parts due to lower than expected sales during the pandemic and increased service expenses, partially

offset by a higher number of Personal 6.0 units sold and an increase in our average selling price due to a change in sales mix.

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

currently expect from ReStore and our Distributed Products as well as due to an increase in the cost of product parts, especially as long

as COVID-19 pandemic is affecting the market.

Research and Development

Expenses, Net

Our research and development expenses, net for 2021 and 2020 were

as follows (in thousands):

Years Ended December 31,

Research and development expenses, net

Research and development expenses, net, decreased by $1.9 million, or 35%, during 2020 compared to 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.

Research and development expenses, decreased by $520 thousand, or 15%, during 2021 compared

The decrease is attributable to decreased personnel and personnel related expenses partially offset with higher subcontractors’

We intend to focus our research and development expenses mainly

on our current products maintenance and improvement as well as developing our “soft suit” exoskeleton for additional indications

affecting the ability to walk or a home use design such as the ReBoot

Sales and Marketing Expenses

Our sales and marketing expenses for 2020 and 2019 were as follows (in thousands):

Our sales and marketing expenses for 2021 and 2020 were as follows

(in thousands):

Years Ended December 31,

Sales and marketing expenses

Sales and marketing expenses decreased by $413 thousand, or 7%, during 2020 compared to 2019.

The decrease is due to our Payment Protection Program (“PPP”) grant forgiveness that supported mainly our

personnel and personnel related costs.

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 2020 and 2019 were as follows (in thousands):

Sales and marketing expenses increased by $1.24 million, or 22%, during 2021 compared to 2020.

was driven by higher employee and employee related expenses including sales related compensation, travel and tradeshows activity as well

as our Payment Protection Program (“PPP”) grant forgiveness which reduced the expenses last year and higher professional

expense during 2021.

In the near term our sales and marketing expenses are expected to be driven by our efforts

expand our reimbursement coverage of our ReWalk Personal device and to expand our current product commercialization.

General and Administrative

Our general and administrative expenses for 2021 and 2020 were

as follows (in thousands):

Years Ended December 31,

General and administrative

General and administrative expenses decreased by $279 thousand, or 5%, during 2020 compared to 2019.

The decrease was driven by lower non-cash compensation expenses and professional services costs

offset by higher insurance costs.

Financial Expenses, Net

Our financial expenses, net for 2020 and 2019 were as follows (in thousands):

General and administrative expenses increased by $646 thousand,

or 13%, during 2021 compared to 2020.

The increase was driven by increased personnel and personnel related expenses, higher share-based

compensation expenses as well as professional services expenses.

Financial Expenses (income),

Our financial expenses, net for 2021 and 2020 were as follows (in

Years Ended December 31,

Financial expenses, net

Financial expenses, net, decreased by $575 thousand, or 62% during 2020 compared to 2019.

The decrease is attributable to lower interest expenses related to the Loan Agreement, as amended, with Kreos.

For further discussion of the Loan Agreement with Kreos, see “-Liquidity and Capital Resources” below and also Note 6 to our audited consolidated financial statements below.

Financial expenses (income), net

Financial expenses (income), net, decreased by $934 thousand, or

101% during 2021 compared to 2020.

The decrease is mainly due to lower interest expenses related to the Loan Agreement with Kreos, which

was fully repaid in December 2020.

For further discussion of the Loan Agreement with Kreos, see “-Liquidity and Capital Resources”

section below and Note 6 to our audited consolidated financial statements.

Our income tax for 2021 and 2020 was as follows (in thousands):

Years Ended December 31,

Taxes on income (tax benefit)

Income taxes increased by $44 thousand or 629% during 2020 compared to 2019 mainly due to temporary differences booked to deferred tax expense.

Taxes on income

Income taxes increased by $43 thousand or 84% during 2021 compared to 2020 mainly due

to our subsidiary’s activity in Germany.

Year Ended December 31, 2020 Compared to Year Ended December 31,

A discussion of changes in our results of operations in 2019 compared to 2018 has been omitted from this annual report on Form 10-K, but may be found in “Item 7.

Management's Discussion and Analysis of

Financial Condition and Results of Operations” of our Form 10-K for the fiscal year ended December 31, 2019, filed with the SEC on February 20, 2020, which is available free of charge on the SECs website at www.sec.gov and at www.rewalk.com ,

and is incorporated by reference herein.

A discussion of changes in our results of operations in 2020 compared

to 2019 has been omitted from this annual report on Form 10-K but may be found in “Item 7.

Management's Discussion and Analysis

of Financial Condition and Results of Operations” of our Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC

on February 18, 2021, which is available free of charge on the SECs website at www.sec.gov and at www.rewalk.com, and is incorporated

by reference herein.

Critical Accounting Policies

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.

See Note 2 to our audited consolidated

financial statements presented elsewhere in this annual report for a description of the significant accounting policies that we used to prepare our consolidated financial statements.

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.

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 presented elsewhere in this annual report for a description of the significant accounting

policies that we used to prepare our consolidated financial statements.

The critical accounting policies that were impacted by the estimates,

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Revenue Recognition

On January 1, 2018, we adopted Topic 606 using the modified retrospective method for contracts that were not completed as of January 1, 2018.

Under the modified retrospective method,

we recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings.

This adjustment did not have a material impact on our consolidated financial statements.

reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Revenue Recognition (“Topic 605”).

The adoption of Topic 606 represents a change in accounting principle that will provide financial statement readers with enhanced revenue recognition disclosures.

In accordance with

Topic 606, revenue is recognized when obligations under the terms of a contract with our customer are satisfied;

generally this occurs with the transfer of control of our products or services.

Revenue is measured as the amount of consideration to which

we expect to be entitled in exchange for transferring products or providing services.

On January 1, 2018, we adopted Topic 606 using the modified retrospective

method for contracts that were not completed as of January 1, 2018.

Under the modified retrospective method, we recognized the cumulative

effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings.

This adjustment did

not have a material impact on our consolidated financial statements.

Results for reporting periods beginning after January 1, 2018 are

presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting

under Revenue Recognition (“Topic 605”).

The adoption of Topic 606 represents a change in accounting principle that will provide

financial statement readers with enhanced revenue recognition disclosures.

In accordance with Topic 606, revenue is recognized when obligations

under the terms of a contract with our customer are satisfied;

generally, this occurs with the transfer of control of our products or

Revenue is measured as the amount of consideration to which we expect to be entitled in exchange for transferring products or

providing services.

To achieve this core principle, the Company applies the following five steps:

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Determine the transaction price

Allocate the transaction price to performance obligations in the contract

Recognize revenue when or as the Company satisfies a performance obligation

Provisions are made at the time of revenue recognition for any applicable warranty cost expected to be incurred.

The timing for revenue recognition among the various products and

customers is dependent upon satisfaction of such criteria and generally varies from either shipment or delivery to the customer depending on the specific shipping terms of a given transaction, as stipulated in the agreement with each customer.

than pricing terms which may differ due to the different volumes of purchases between distributors and end-users, there are no material differences in the terms and arrangements involving direct and indirect customers.

Our products sold through

agreements with distributors are non-exchangeable, non-refundable, non-returnable and without any rights of price protection or stock rotation.

Allocate the transaction price to performance obligations in

Recognize revenue when or as the Company satisfies a performance

Provisions are made at the time of revenue recognition for any

applicable warranty cost expected to be incurred.

The timing for revenue recognition among the various products and customers is dependent

upon satisfaction of such criteria and generally varies from either shipment or delivery to the customer depending on the specific shipping

terms of a given transaction, as stipulated in the agreement with each customer.

Other than pricing terms which may differ due to the

different volumes of purchases between distributors and end-users, there are no material differences in the terms and arrangements involving

direct and indirect customers.

Our products sold through agreements with distributors are non-exchangeable, non-refundable, non-returnable

and without any rights of price protection or stock rotation.

Accordingly, we consider all the distributors as end-users.

We generally do not grant a right of return for

our products.

do not grant a right of return for our products.

There have been a few occasions in which we experienced a return of our products.

Therefore, we recorded reductions to revenue for expected future product returns based on our historical experience.

For the majority of sales of Rehabilitation systems, we include training and consider the elements in the arrangement to be a single unit of accounting.

In accordance with ASC 606,

we have concluded that the training is essential to the functionality of our systems.

Therefore, we recognize revenue for the system and training only after delivery, in accordance with the agreement delivery terms, to the customer and after the

training has been completed, once all other revenue recognition criteria have been met.

For sales of Personal systems to end users, and for sales of Personal or Rehabilitation systems to third party distributors, we do not provide training to the end

user as this training is completed by the rehabilitation centers or by the distributor that have previously completed the ReWalk Training program.

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, we updated our service policy to include a five-year warranty compared to a period of two years that were included in the past for parts and services.

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.

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.

The Company also offers a rent-to-purchase option for its ReWalk Personal device.

Those transactions provide potential customers the option to use the device for a short term, after

which they can choose whether to purchase it.

we recorded reductions to revenue for expected future product returns based on our historical experience.

For the majority of sales of Rehabilitation systems, we include

training and consider the elements in the arrangement to be a single unit of accounting.

In accordance with ASC 606, we have concluded

that the training is essential to the functionality of our systems.

Therefore, we recognize revenue for the system and training only after

delivery, in accordance with the agreement delivery terms, to the customer and after the training has been completed, once all other revenue

recognition criteria have been met.

For sales of Personal systems to end users, and for sales of Personal or Rehabilitation systems to

third party distributors, we do not provide training to the end user as this training is completed by the rehabilitation centers or by

the distributor that have previously completed the ReWalk Training program.

Warranties are classified as either assurance type or service type

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, we updated our service policy 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

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.

The Company also offers a rent-to-purchase option for its ReWalk

Personal device.

Those transactions provide potential customers the option to use the device for a short term, after which they can choose

whether to purchase it.

In such cases we recognize revenue ratably according to the agreed rental monthly fee.

For units placed, we transfer control and recognize a sale when title has passed to our customer and rental revenue

ratably according to the agreed rental monthly fee.

For units placed, we transfer

control and recognize a sale when title has passed to our customer and rental revenue ratably according to the agreed rental monthly fee.

Each unit placed is considered an independent, unbundled performance obligation.

Share-Based Compensation – Option and Restricted Stock Units (“RSUs”) Valuations

We account for share-based compensation in accordance with ASC No.

Share-Based Compensation

– Option and Restricted Stock Units (“RSUs”) Valuations

We account for share-based compensation in accordance with ASC

718, “Compensation-Stock Compensation.” ASC No.

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payment awards on the date of grant using an Option-Pricing Model, or OPM.

The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in our consolidated statements of

We selected the Black-Scholes-Merton option pricing model as the most appropriate method for determining the estimated fair value of options.

The resulting cost of an equity

incentive award is recognized as an expense over the requisite service period of the award, which is usually the vesting period.

We recognize compensation expense over the vesting period using the straight-line method and classify these amounts in the

consolidated financial statements based on the department to which the related employee reports.

The determination of the grant date fair value of options using the Black-Scholes-Merton option pricing model is affected by estimates and assumptions regarding a number of complex

and subjective variables.

These variables include the expected volatility of our share price over the expected term of the options, share option exercise and cancellation behaviors, risk-free interest rates and expected dividends, which are estimated

The value of the portion of the award that is ultimately expected

to vest is recognized as an expense over the requisite service periods in our consolidated statements of operations.

We selected the Black-Scholes-Merton option pricing model as the

most appropriate method for determining the estimated fair value of options.

The resulting cost of an equity incentive award is recognized

as an expense over the requisite service period of the award, which is usually the vesting period.

We recognize compensation expense over

the vesting period using the straight-line method and classify these amounts in the consolidated financial statements based on the department

to which the related employee reports.

The determination of the grant date fair value of options using

the Black-Scholes-Merton option pricing model is affected by estimates and assumptions regarding a number of complex and subjective variables.

These variables include the expected volatility of our share price over the expected term of the options, share option exercise and cancellation

behaviors, risk-free interest rates and expected dividends, which are estimated as follows:

Risk-free Interest Rate.

The risk-free interest rate is based on the yield from U.S.

Treasury zero-coupon bonds with a term equivalent to the

contractual life of the options.

Treasury zero-coupon bonds with a term equivalent to the contractual life

of the options.

Dividend Yield.

We have never declared or paid any cash dividends and do not presently plan to pay cash dividends in the foreseeable future.

Consequently, we used an expected dividend yield of zero.

never declared or paid any cash dividends and do not presently plan to pay cash dividends in the foreseeable future.

Consequently, we

used an expected dividend yield of zero.

Expected Volatility.

We estimated the expected share price volatility for our ordinary shares by considering the historic price volatility

for industry peers based on price observations over a period equivalent to the expected term of the share option grants.

Industry peers consist of public companies in the medical device and healthcare industries.

We intend to continue to consistently

apply this process using the same or similar industry peers until a sufficient amount of historical information regarding the volatility of our ordinary share price becomes available, or unless circumstances change such that the identified companies

are no longer similar to us, in which case, more suitable companies whose share prices are publicly available would be utilized in the calculation.

estimated the expected share price volatility for our ordinary shares by considering the historic price volatility for industry peers

based on price observations over a period equivalent to the expected term of the share option grants.

Industry peers consist of public

companies in the medical device and healthcare industries.

We intend to continue to consistently apply this process using the same or

similar industry peers until a sufficient amount of historical information regarding the volatility of our ordinary share price becomes

available, or unless circumstances change such that the identified companies are no longer similar to us, in which case, more suitable

companies whose share prices are publicly available would be utilized in the calculation.

Expected Term .

The expected term of options granted represents the period of time that options granted are expected to be outstanding and is determined based on

the simplified method in accordance with ASC No.

term of options granted represents the period of time that options granted are expected to be outstanding and is determined based on the

simplified method in accordance with ASC No.

718-10-S99-1 (SAB No.

110), as adequate historical experience is not available to provide a reasonable estimate.

718 requires forfeitures to be estimated at the time of grant and revised,

if necessary, in subsequent periods if actual forfeitures differ from those estimates.

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

As part of the process of preparing our consolidated financial statements, we are required to estimate our taxes in each of the jurisdictions in which we operate.

We account for

income taxes in accordance with ASC Topic 740, “Income Taxes,” or ASC Topic 740.

ASC Topic 740 prescribes the use of an asset and liability method whereby deferred tax asset and liability account balances are determined based on the difference between

book value and the tax bases of assets and liabilities and carryforward tax losses.

Deferred taxes are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse.

We exercise judgment

and provide a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value if it is more likely than not that some portion or all of the deferred tax asset will not be realized.

We have established a full

valuation allowance with respect to our deferred tax assets.

ASU 2015-17, “Balance Sheet Classification of Deferred Taxes” provides presentation requirements to classify deferred tax assets and liabilities, along with any related valuation

allowance, are classified as non-current on the balance sheet.

We account for uncertain tax positions in accordance with ASC 740 and recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will

be sustained on examination by the taxing authorities, based on the technical merits of the position.

The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than

50% likelihood of being realized upon ultimate settlement.

Accordingly, we report a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return.

We recognize interest and penalties, if

any, related to unrecognized tax benefits in tax expense.

110), as adequate historical experience is not available

to provide a reasonable estimate.

718 requires forfeitures to be estimated at the time of grant and revised, if necessary,

in subsequent periods if actual forfeitures differ from those estimates.

The fair value of RSUs granted is determined based on the price

of the Company’s ordinary shares on the date of grant.

As part of the process of preparing our consolidated financial

statements, we are required to estimate our taxes in each of the jurisdictions in which we operate.

We account for income taxes in accordance

with ASC Topic 740, “Income Taxes,” or ASC Topic 740.

ASC Topic 740 prescribes the use of an asset and liability method whereby

deferred tax asset and liability account balances are determined based on the difference between book value and the tax bases of assets

and liabilities and carryforward tax losses.

Deferred taxes are measured using the enacted tax rates and laws that are expected to be

in effect when the differences are expected to reverse.

We exercise judgment and provide a valuation allowance, if necessary, to reduce

deferred tax assets to their estimated realizable value if it is more likely than not that some portion or all of the deferred tax asset

will not be realized.

We have established a full valuation allowance with respect to our deferred tax assets.

ASU 2015-17, “Balance Sheet Classification of Deferred Taxes”

provides presentation requirements to classify deferred tax assets and liabilities, along with any related valuation allowance, are classified

as non-current on the balance sheet.

We account for uncertain tax positions in accordance with ASC 740 and recognize the tax benefit

from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing

authorities, based on the technical merits of the position.

The tax benefits recognized in the financial statements from such a position

should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.

we report a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return.

We recognize interest and penalties, if any, related to unrecognized tax benefits in tax expense.

Recently Issued and Adopted Accounting Pronouncements

A discussion of recent accounting pronouncements is included in Note 2v, New Accounting Pronouncements to our consolidated financial statements in this annual report.

A discussion of recent accounting pronouncements is included in Note 2w, New

Accounting Pronouncements to our consolidated financial statements in this annual report.

Liquidity and Capital Resources

Sources of Liquidity and Outlook

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

offerings, cash exercises of outstanding warrants and the incurrence of bank debt.

For the full year ended December 31, 2020, the Company incurred a consolidated net loss of $13 million and has an accumulated deficit in the total amount of $181.4 million.

Our cash and cash equivalent on December 31, 2020, totaled $20.3 million, and in subsequent warrants exercise transactions the Company received a total of an additional $13.2 million in the beginning of 2021.

Sources of Liquidity and

Since inception, we have

funded our operations primarily through the sale of our equity securities and convertible notes to investors in private placements, the

sale of our equity securities in public offerings, cash exercises of outstanding warrants and the incurrence of bank debt.

For the full year ended

December 31, 2021, the Company incurred a consolidated net loss of $12.7 million and has an accumulated deficit in the total amount of

$194.2 million.

Our cash and cash equivalent on December 31, 2021, totaled $88.3 million.

The Company’s negative operating cash

flow for the full year ended December 31, 2021, was $11.5 million.

The Company has sufficient funds to support its operation for more than 12 months following the approval of our consolidated financial statements for the fiscal year ended

December 31, 2020.

We expect to incur future net losses and our transition to profitability is dependent upon, among other things, the successful development and commercialization of our

products and product candidates, the 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.

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.

The Company has sufficient funds to support its operation for more

than 12 months following the approval of our consolidated financial statements for the fiscal year ended December 31, 2021.

We expect to incur future

net losses and our transition to profitability is dependent upon, among other things, the successful development and commercialization

of our products and product candidates, the achievement of a level of revenues adequate to support our cost structure.

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.

We previously considered the Investment Agreement (as defined below) with Timwell (as

defined below) as a potential source of ongoing liquidity.

However, in March 2020, 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.

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.

New medical indications that affect the ability to walk may include multiple sclerosis, cerebral palsy, Parkinson’s disease, and elderly assistance.

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.

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 $20.0 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 the date on which all principal is repaid.

As of June 30, 2017, the Company raised more than

$20.0 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 of the Kreos Convertible Note on June 9, 2017.

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.

Pursuant to the terms of the warrant, in connection with the $20.0 million drawdown under the Loan Agreement on January 4, 2016, we issued

to Kreos the warrant to purchase up to 4,771 of our ordinary shares at an exercise price of $241.0 per share, increased to 6,679 ordinary shares on December 28, 2016.

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, under which $3.0 million of the outstanding principal under the

Loan Agreement became subject to repayment pursuant to the senior secured Kreos Convertible Note issued on June 9, 2017.

On November 20, 2018, the Company and Kreos entered into the Second Amendment of the Loan Agreement, in which the Company repaid Kreos the

$3.6 million other related payments, including prepayment costs and end of loan payments, terminating the Kreos Note, by issuing to Kreos 192,000 units and 288,000 pre-funded units as part of an underwritten public offering at the public offering

Our anticipated primary uses of cash are (i) sales, marketing and

reimbursement expenses related to market development activities of our ReStore and Personal 6.0 devices, broadening third-party payor

and CMS coverage for our ReWalk Personal device and commercializing our new product lines added through distribution agreements;

research and development of our lightweight exo-suit technology for potential home personal health utilization for multiple indications

and future generation designs for our spinal cord injury device;

(iii) routine product updates;

(iv) general corporate purposes, including

working capital needs;

and (v) potential acquisitions of business.

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.

Loan Agreement with Kreos

and Related Warrant to Purchase Ordinary Shares

Loan Agreement

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 $20.0 million, which was subsequently amended on June 9, 2017

whereby $3.0 million of the outstanding principal under the Loan Agreement became subject to repayment pursuant to the senior secured

Kreos Convertible Note issued on that date.

On November 20, 2018 we and Kreos entered into the Second Amendment to the Loan Agreement,

in which we repaid Kreos the $3.6 million other related payments, including prepayment costs and end of loan payments, terminating the

Kreos Note, by issuing to Kreos 192,000 units and 288,000 pre-funded units as part of an underwritten public offering at the public offering

prices, and the parties agreed to revise the principal and the repayment schedule under the Kreos Loan.

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 $7.5.

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 then-effective 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 with an exercise period of five years.

On December 29, 2020, the Company repaid in full the remaining loan principal amount to Kreos including end of loan payments and by that discharged all of its obligation to Kreos Accordingly, as of

December 31, 2020 the outstanding principal amount under the Kreos Loan Agreement was zero.

On December 29, 2020, we repaid

in full the remaining loan principal amount to Kreos including end of loan payments and by that discharged all of its obligation to Kreos

Accordingly, as of December 31, 2020 the outstanding principal amount under the Kreos Loan Agreement was zero.

Warrant to Purchase Ordinary Shares

Pursuant to the terms of the Loan Agreement, on January 4, 2016,

we issued to Kreos a warrant to purchase up to 4,771 of our ordinary shares at an exercise price of $241.0 per share, increased to 6,679

ordinary shares on December 28, 2016.

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 5, 2019 and June 6, 2019, we entered into warrant

exercise agreements with certain institutional investors of warrants to purchase our ordinary shares, pursuant to which, Kreos agreed

to exercise in cash their November 2018 warrants at the then-effective exercise price of $7.50 per share.

Under the exercise agreements,

we 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 with an

exercise period of five years.

Additionally, Kreos and we 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 $7.5.

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.

information see Note 10 to our consolidated financial statements set forth in “Part II.

Financial Statements and Supplementary Data” of this annual report.

On April 21, 2020, ReWalk Robotics Inc (“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.

For more information see Note

10 to our consolidated financial statements set forth in “Part II.

Financial Statements and Supplementary Data” of

this annual report.

Equity Raises

Use of Form S-3

Beginning with the filing of our Form 10-K on February 17, 2017, we were subject to limitations under the applicable rules of Form S-3, which constrained 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.

As of February 16, 2021, since our public float has reached at least $75 million in the preceding 60 days, these limitations will no longer apply to our primary offerings under Form S-3 until

the filing of our annual report on Form 10-K in 2022, when we will re-test our status under these rules.

If our public float subsequently drops below $75 million as of the filing of that or a subsequent annual report on Form 10-K, or at the time we

file a new Form S-3, we will become subject to these limitations again, until the date that our public float again reaches $75 million.

Additionally, we may not use our currently effective Form S-3 until April 1, 2021.

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 currently effective Form S-3

expires on May 23, 2022.

We have registered up to $100 million of ordinary shares warrants and/or debt securities and certain other outstanding securities with registration rights on the Form S-3.

Equity Offerings and Subsequent Warrant Exercises

On November 20, 2018, the Company completed a follow-on underwritten 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.

Each 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 million.

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

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

Beginning with the filing of our Form 10-K on February 17, 2017,

we were subject to limitations under the applicable rules of Form S-3, which constrained 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.

At the time of filing our annual report for the year ended December 31, 2020, we were no longer subject to these limitations, because

our public float had reached at least $75 million in the 60 days preceding the filing of that annual report.

Likewise, because our public

float was at least $75 million within the 60 days preceding the date of this annual report, we are not currently subject to these limitations.

Our currently effective registration statement on Form S-3 expires on May 23, 2022.

If we file a new registration statement on Form S-3

to replace our expiring registration statement, we will be required to re-test our compliance with these rules at that time.

we are not subject to these limitations at the time the new registration statement is filed, if we choose to do so, then we will not be

subject to these limitations for the remainder of the 2022 fiscal year and until such time as we file our next annual report for the year

ended December 31, 2022, at which time we will be required to re-test our status under these rules.

If our public float subsequently drops

below $75 million as of the filing of our next annual report on Form 10-K, or at the time we file a new Form S-3, we will become subject

to these limitations again, until the date that our public float again reaches $75 million.

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.

We have registered up to $100 million of ordinary shares warrants

and/or debt securities and certain other outstanding securities with registration rights on our current registration statement on Form

Equity Offerings and

Warrant Exercises

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.

As of December 31, 2020, all

pre-funded warrants to purchase ordinary shares had been exercised and 1,831,500 common warrants to purchase ordinary shares had been exercised.

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

On December 8, 2020, the Company entered into a private placement with certain institutional investors for the issuance and sale of 5,579,776 ordinary shares, par value NIS 0.25

per share, at $1.43375 per ordinary and warrants to purchase up to 4,184,832 ordinary shares with exercise price of $1.34 per share, exercisable from December 8, 2020 until June 8, 2026.

Additionally, the Company issued warrants to purchase up to

334,787 ordinary shares, with an exercise price of $1.7922 per share, exercisable from December 8, 2020 until June 8, 2026, to certain representatives of H.C.

Wainwright as compensation for its role as the placement agent in our December 2020 private

For information regarding exercises of these warrants after December 31, 2020, please see “—Subsequent Events.”

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

As of December 31, 2020, all pre-funded warrants to purchase ordinary shares had been exercised and 1,831,500 common warrants

to purchase ordinary shares had been exercised.

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.

On December 8, 2020, the Company entered into a private placement

with certain institutional investors for the issuance and sale of 5,579,776 ordinary shares, par value NIS 0.25 per share, at $1.43375

per ordinary and warrants to purchase up to 4,184,832 ordinary shares with exercise price of $1.34 per share, exercisable from December

8, 2020 until June 8, 2026.

Additionally, the Company issued warrants to purchase up to 334,787 ordinary shares, with an exercise price

of $1.7922 per share, exercisable from December 8, 2020, until June 8, 2026, to certain representatives of H.C.

Wainwright as compensation

for its role as the placement agent in our December 2020 private placement.

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 as compensation for its role as the placement agent in our February 2021 private placement

On September 27, 2021, we signed a purchase agreement with certain

institutional investors for the issuance and sale of 15,403,014 ordinary shares, pre-funded warrants to purchase up to an aggregate of

610,504 ordinary shares and ordinary warrants to purchase up to an aggregate of 8,006,759 ordinary shares at an exercise price of $2.00

The pre-funded warrants have an exercise price of $0.001 per ordinary share and are immediately exercisable and can be exercised

at any time after their original issuance until such pre-funded warrants are exercised in full.

Each ordinary share was sold at an offering

price of $2.035 and each pre-funded warrant was sold at an offering price of $2.034 (equal to the purchase price per ordinary share minus

the exercise price of the pre-funded warrant).

The offering of the ordinary shares, the pre-funded warrants and the ordinary shares that

are issuable from time to time upon exercise of the pre-funded warrants was made pursuant to our shelf registration statement on Form

S-3 initially filed with the SEC on May 9, 2019, and declared effective by the SEC on May 23, 2019, and the ordinary warrants were issued

in a concurrent private placement.

The ordinary warrants are 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.

All of the pre-funded warrants were exercised in full

on September 27, 2021, and the offering closed on September 29, 2021.

Additionally, we issued warrants to purchase up to 960,811 ordinary

shares, with an exercise price of $2.5438 per share, exercisable from September 27, 2021, until September 27, 2026, to certain representatives

Wainwright as compensation for its role as the placement agent in our September 2021 private placement offering.

During the twelve months ended December 31, 2021, we received a

total of 9,814,754 outstanding warrants exercises with exercise prices ranging from $1.25 to $1.79 were exercised, for total gross proceeds

of approximately $13.8 million.

ATM Offering Program

On May 10, 2016, we entered into our Equity Distribution Agreement with Piper Jaffray, as amended on May 9, 2019, 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 Agreement.

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.

We intend to continue using the at-the-market offering or similar continuous offering programs opportunistically to raise additional funds, although we are currently subject to

restrictions on using the ATM Offering Program with Piper Jaffray.

Under our December 2020 purchase agreement with certain investors, we agreed for a period of one year following December 3, 2020 not to (i) issue or agree to issue equity or debt

securities convertible into, or exercisable or exchangeable for, ordinary shares at a conversion price, exercise price or exchange price which floats with the trading price of the ordinary shares or which may be adjusted after issuance upon the

occurrence of certain events or (ii) enter into any agreement, including an equity line of credit, whereby the Company may issue securities at a future-determined price, other than an at–the-market facility with the placement agent, H.C.

& Co, LLC, beginning on February 1, 2021.

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

with Piper Jaffray, as amended on May 9, 2019, 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 Agreement.

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

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.

to continue using the at-the-market offering or similar continuous offering programs opportunistically to raise additional funds, although

we are currently subject to restrictions on using the ATM Offering Program with Piper Jaffray.

Under our September 2021 purchase

agreement with certain investors, equity or debt securities convertible into, or exercisable or exchangeable for, ordinary shares at a

conversion price, exercise price or exchange price which floats with the trading price of the ordinary shares or which may be adjusted

after issuance upon the occurrence of certain events or (ii) enter into any agreement, including an equity line of credit, whereby the

Company may issue securities at a future-determined price, other than an at–the-market facility with the placement agent, H.C.

& Co, LLC, beginning on March 29, 2022.

Such limitations may inhibit our ability to access capital efficiently.

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.

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.

Years Ended December 31,

5 unchanged sentences

Net Cash Used in Operating Activities

Net cash used in operating activities decreased by $2.2 million in 2020 compared to 2019 mainly due to our reduction in our net loss.

Net cash used in operating activities decreased by $1.1 million

in 2021 compared to 2020 mainly due to due to improvement in working capital as well as no interest payments to Kreos as we repaid our

debt under the Loan Agreement in full in December 2020.

Net Cash Used in Investing Activities

Net cash used in investing activities increased from $22 thousand in 2019 to $73 thousand in 2020, primarily as a result of increased use of cash for the purchase of property and

Net cash used in investing activities decreased from $73 thousand in 2020 to $47 thousand

in 2021, primarily as a result of decreased use of cash for the purchase of property and equipment.

Net Cash Provided by Financing Activities

We generated $16.7 million from financing activities in 2020 compared to $21.5 million in 2019.

Our fundraising activities remained generally flat with $23.3 million raised in 2020

and 2019 and the overall decrease is due to our Kreos loan repayment which was higher by $5.2 million in 2020.

We generated $79.5 million from financing activities in 2021 compared

to $16.7 million in 2020.

The increase is primarily due to the higher proceeds received through our first and third quarter equity raise

and warrants exercises, as well as the fact that we did not have any principal payments pursuant to the Loan Agreement with Kreos after

repaying our debt in full in December 2020.

Year Ended December 31, 2020 Compared to Year Ended December 31,

A discussion of changes in our cash flows in 2019 compared to 2018 has been omitted from this annual report on Form 10-K, but may be found in “Item 7.

Management's Discussion and

Analysis of Financial Condition and Results of Operations” of our Form 10-K for the fiscal year ended December 30, 2019, filed with the SEC on February 20, 2020, which is available free of charge on the SECs website at www.sec.go v and at www.rewalk.com ,

and is incorporated by reference herein.

A discussion of changes in our cash flows in 2020 compared to 2019 has been omitted

from this annual report on Form 10-K but may be found in “Item 7.

Management's Discussion and Analysis of Financial Condition and

Results of Operations” of our Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on February 18, 2021, which

is available free of charge on the SECs website at www.sec.gov and at www.rewalk.com, and is incorporated by reference herein.

Obligations and Commercial Commitments

5 unchanged sentences

Operating lease obligations (3)

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 December 31, 2020 has a remaining term of approximately 2.16 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 Harvard.

These product development

milestones have been met as of December 31, 2020.

There are commercialization milestones which depend on us reaching certain sales amounts some or all of which may not occur.

The Company depends on one contract manufacturer, Sanmina Corporation, 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

Our Collaboration Agreement was originally signed for a period of six years and as of December 31, 2021

has a remaining term of 0.25 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 Harvard.

product development milestones have been met as of December 31, 2021.

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.

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 3.215:$1.00, and the payments due

under our operating lease obligation for our German subsidiary that are to be paid in euros at a rate of exchange of €1.00:$1.227, both of which were the applicable exchange rates as of December 31, 2020.

We calculated the payments due under our Loan

Agreement with Kreos according to the current schedule of repayment of principal and interest, taking into account the two tranches of debt drawn down under the Loan Agreement.

For information on this repayment schedule, see “-Liquidity and Capital

Resources-Loan Agreement with Kreos and Related Warrant to Purchase Ordinary Shares” 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 3.11:$1.00, and the payments due under our operating lease

obligation for our German subsidiary that are to be paid in euros at a rate of exchange of €1.00:$1.13, both of which were the applicable

exchange rates as of December 31, 2021.

Off-Balance Sheet Arrangements

We had no off-balance sheet arrangements or guarantees of third-party obligations during the periods presented.

We had no off-balance sheet arrangements or guarantees of third-party

obligations during the periods presented.

Trend Information

For information on significant known trends, please see “Part I-Item 1.

“Business – Overview” in this annual report.

Subsequent Events

Following December 31, 2020, a total of 9,372,954 outstanding warrants with exercise prices ranging from $1.25 to $1.79 were exercised, for total gross proceeds to us of approximately $13.2

– Overview” in this annual report.

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What changed 10-K

Item 7. Management’s Discussion and Analysis