What changed in this filing

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Item 1. Business

2023-02-23 compared with 2022-02-24 · 2657 added, 667 removed, 615 unchanged (84% of the section changed)

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 our ReStore device, which we began commercializing

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 finalized and moved to implement two separate agreements to distribute additional

product lines in the United States.

We are the exclusive distributor of the MediTouch Tutor movement biofeedback systems in the United

States and 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.

We refer to the MediTouch and MyoCycle devices as

our “Distributed Products.” These Distributed 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 are in the research stage of ReBoot, a soft exoskeleton for

stroke home and community use.

This product is a complementary product to ReStore as it provides ankle support including plantar

flexion for gait and mobility improvement, and it received Breakthrough Device Designation from the U.S.

Food and Drug Administration

(“FDA”) in November 2021.

We are a medical device company that is designing, developing,

and commercializing innovative technologies that enable mobility and wellness in rehabilitation and daily life for individuals with neurological

Our initial product offerings were the ReWalk Personal and ReWalk Rehabilitation Exoskeleton devices for individuals

with spinal cord injury (“SCI Products”).

These devices are robotic exoskeletons that are designed for individuals with

paraplegia that use our patented tilt-sensor technology and an onboard computer and motion sensors to drive motorized legs that power

These SCI Products allow individuals with spinal cord injury the ability to stand and walk again during everyday activities

at home or in the community.

We have sought to expand our product offerings

beyond the SCI Products through internal development and distribution agreements.

We have developed our ReStore Exo-Suit device,

which we began commercializing in June 2019.

The ReStore is a powered, lightweight soft exo-suit intended for use during the rehabilitation

of individuals with lower limb disabilities due to stroke.

During the second quarter of 2020, we finalized and moved to implement two

separate agreements to distribute additional product lines in the United States.

We are the exclusive distributor of the MYOLYN MyoCycle

FES Pro cycles to U.S.

rehabilitation clinics and for the MyoCycle Home cycles available to US veterans through the U.S.

Department of

Veterans Affairs (“VA”) hospitals.

In the second quarter of 2020, we also became the exclusive distributor of the MediTouch

Tutor movement biofeedback systems in the United States;

however, due to unsatisfactory sales performance of the MediTouch product lines,

we terminated this agreement as of January 31, 2023.

We refer to the MediTouch and MyoCycle devices as our “Distributed Products.”

We will continue to evaluate other products for distribution or acquisition that can broaden our product offerings further to help individuals

with neurological injury and disability.

We are in the research stage of ReBoot, a personal

soft exo-suit for home and community use by individuals post-stroke, and we are currently evaluating the reimbursement landscape and the

potential clinical impact of this device.

This product would be a complementary product to ReStore as it provides active assistance to

the ankle during plantar flexion and dorsiflexion for gait and mobility improvement in the home environment, and it received Breakthrough

Device Designation from the U.S.

Food and Drug Administration (“FDA”) in November 2021.

Further investment in the development

path of the ReBoot has been temporarily paused in 2023 pending further determination about the clinical and commercial opportunity of

Our principal markets are the United States and Europe.

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We have in the past generated and expect to generate in the future

revenues from a combination of third-party payors (including private and government payors) and self-pay individuals.

revenue from a combination of third-party payors (including private and government payors) and self-pay individuals.

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

policy of coverage and reimbursement by third-party commercial payors currently does not exist in the United States for exoskeleton technologies

such as the ReWalk Personal Exoskeleton, we are pursuing various paths of reimbursement and support fundraising efforts by institutions

and clinics, such as the VA policy that was issued in December 2015 for the evaluation, training, and procurement of ReWalk Personal exoskeleton

systems for all qualifying veterans suffering from spinal cord injury (“SCI”) across the United States.

We have also been pursuing a coverage policy with the Centers

for Medicare and Medicaid Services (“CMS”), which”) reported in 2017 that it covers approximately 55% of the spinal

cord injury population which are at least five years post their injury date.

In July 2020, following a successful submission and hearing

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

We are currently seeking to identify the relevant Medicare product category with CMS.

In Germany, we continue to make progress toward achieving coverage

from the various government, private and worker’s compensation payors for our SCI products.

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 (“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 is 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 and 2021,

we announced several new agreements with German SHIs, including TK and DAK Gesundheit, as well as the first German Private Health Insurer

(“PHI”), which outline the process of obtaining our devices for eligible insured patients.

We are also currently working with

several additional SHIs 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.

Additionally, to date, several private insurers in the United States and Europe are

providing reimbursement for ReWalk in certain cases.

Evolving COVID-19 Pandemic

The impact of the COVID-19 pandemic has resulted in, and will likely

continue to result in, significant disruptions to the global economy and the capital markets, as well as our business.

In an effort to

halt the outbreak of COVID-19, a number of countries, including the United States and Germany as well as many other countries in Europe,

have implemented numerous measures to contain the pandemic, such as travel bans and restrictions, shelter-in-place orders and shutdowns.

In addition, a significant number of our global suppliers, vendors, distributors and manufacturing facilities are located in regions that

have been affected by the pandemic.

Those operations have been materially adversely affected by restrictive government and private enterprise

measures implemented in response to the pandemic, which in turn, has negatively impacted our operations.

Despite the distribution

of COVID-19 vaccines, new and occasionally more virulent variants of the virus that causes COVID-19, including the Delta and Omicron variants,

have emerged and there is significant uncertainty as to how the countries in which we do business will continue to respond to such outbreaks,

including whether there will be future partial or total shutdowns, which would adversely affect our business.

the Delta and recently Omicron

variant are emerging.

The COVID-19 pandemic has affected our ability to engage with our

SCI Products, ReStore and Distributed Products existing customers, conduct trials of candidates, deliver ordered units or repair existing

systems and provide training of our products to new patients who have largely remained at home due to local movement restrictions and

to rehabilitation centers, which have temporarily shifted priorities and responses to pandemic-related medical equipment.

staffing shortages within the healthcare system itself has resulted in a diminished demand for our SCI Products, as the attention of healthcare

workers and potential patients has turned elsewhere.

As a result, our sales and results of operations have been adversely impacted.

believe that these adverse impacts may continue as long as the pandemic continues to impact our key markets which are Germany and the

United States, especially as long as our ability to conduct trials of product candidates is limited or if our existing customers can’t

train with our SCI Products and as long as capital budgets for rehabilitation devices such as the ReStore remain reduced or on-hold.

Additionally,

some clinics, such as VA clinics, and many other healthcare facilities are enforcing in-clinic restrictions that affect our ability to

demonstrate our devices to patients or start training for qualified potential customers.

We continue to monitor our sales pipeline on

a day-to-day basis in order to assess the effect of these limitations as some have short term effects and some affect our future pipeline

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

delays, component shortages have had a limited impact on our manufacturing, and are also leading to price increases of specific parts.

Other adverse impacts on our production capacity as a result of government directives or health protocols can occur.

Moreover, the current

limitations on our sales activities has made it difficult to effectively forecast our future requirements for systems.

For more information,

see “Part II, Item 1A.

Risk Factors.”

In addition, our future results of operations and liquidity could

be adversely impacted by delays in payments of outstanding receivable amounts beyond normal payment terms, supply chain disruptions and

operational challenges faced by our customers.

The occurrence of new outbreaks of COVID-19 could result in a widespread health crisis

that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn or a global recession

that could cause significant volatility or decline in the trading price of our securities, affect our ability to execute strategic business

activities such as business combination, affect demand for our products and likely impact our operating results.

These may further limit

or restrict our ability to access capital on favorable terms, or at all, lead to consolidation that negatively impacts our business, weaken

demand, increase competition, cause us to reduce our capital spend further, or otherwise disrupt our business.

During the pandemic, we have implemented remote working procedures in the United States,

Germany and Israel and are establishing in-office measures to contain the spread of COVID-19 according to local regulations.

vaccination of most of our employees we have gradually returned to work from our offices during 2021 but are currently facing another

disruption with the spread of the Omicron variant.

Despite this current situation and the challenges it imposes, we have developed several

methods to continue to engage with our current and prospective customers with some success through video conferencing, virtual training

events, and online education demos to offer our support and showcase the value of our products.

We have also been pursuing updates with the

Centers for Medicare and Medicaid Services (“CMS”), to clarify the Medicare coverage category (i.e., benefit category) applicable

for personal exoskeletons.

In 2021, the National Spinal Cord Injury Statistical Center (“NSCISC”) reported the Medicare and

Medicaid are the primary payors for approximately 56% of the spinal cord injury population which are at least five years post their injury

In July 2020, following a successful submission and hearing process, a code was issued for ReWalk Personal Exoskeleton (effective

October 1, 2020), which may be used for purposes of claim submission to Medicare, Medicaid, and other payors.

We are currently seeking

a nationwide Medicare benefit category determination from CMS to designate the relevant Medicare benefit category.

CMS has stated

that, until a nationwide benefit category determination is issued, coverage and payment can be adjudicated on a case-by-case basis by

the Medicare Administrative contractors (“MACs”).

In Germany, we continue to make progress toward

achieving coverage from the various government, private and worker’s compensation payors for our SCI products.

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.

2018, the head office of German Statutory Health Insurance (“SHI”) Spitzenverband (“GKV”) confirmed their decision

to list the ReWalk Personal Exoskeleton system in the German Medical Device Directory.

This decision means that ReWalk is listed among

all medical devices for compensation, which SHI providers can procure for any approved beneficiary on a case-by-case basis.

year 2020 and 2021, we announced several new agreements with German SHIs, including TK and DAK Gesundheit, as well as the first German

Private Health Insurer (“PHI”), which outline the process of obtaining our devices for eligible insured patients.

currently working with several additional SHIs on securing a formal operating contract that will establish the process of obtaining a

ReWalk Personal Exoskeleton for their beneficiaries within their system.

Additionally, to date, several private insurers in the

United States and Europe are providing reimbursement for ReWalk in certain cases.

COVID-19 Pandemic Impact

The impact of the COVID-19

pandemic resulted in significant disruptions to the global economy and the capital markets, as well as our business.

A significant

number of our global suppliers, vendors, distributors, and manufacturing facilities are located in regions that were affected by the pandemic.

Those operations were materially adversely affected by restrictive government and private enterprise measures implemented in response

to the pandemic, which in turn, negatively impacted our operations.

Shut-downs and other limitations

imposed in response to the COVID-19 pandemic adversely affected our ability to identify potential new customers through trade shows and

events, engage with our existing customers, conduct product trials with prospective users, deliver ordered units or repair existing systems

and provide training for our products to new patients, who largely remained at home during local movement restrictions, and to rehabilitation

centers, which temporarily shifted priorities and responses to pandemic-related medical equipment.

In addition, staffing shortages within

the healthcare system itself resulted in a diminished demand for our SCI Products as the attention of healthcare workers and potential

patients turned elsewhere.

Some clinics, such as VA clinics, and many other healthcare facilities, enforced in-clinic restrictions, which

affected our ability to demonstrate our devices to patients or start training for qualified potential customers,

Although these restrictions

have now mostly been lifted, allowing us to restart market development and access programs, we have not seen a full return to pre-pandemic

levels, and we believe that our business will continue to be adversely impacted by the effects of the pandemic-related restrictions and

ReWalk Personal and ReWalk Rehabilitation Products

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Personal 6.0 product sold with multiple sizes of our adjustable parts to allow different users the ability to train within a clinic.

ReWalk Personal is a novel product that seeks to fundamentally

change the health and life experiences of users.

Designed for all-day use, the device is battery-powered and consists of a light, wearable

exoskeleton with integrated motors at the joints, an array of sensors and a computer-based control system to power knee and hip movement.

The device controls movement using subtle shifts in the user’s center of gravity.

A forward tilt of the upper body is sensed by

the system, which initiates the first step.

Repeated body shifting generates a sequence of steps that results in a functional walking

Because the exoskeleton supports its own weight and facilitates the user’s gait, users do not expend unnecessary energy while

While ReWalk Personal does not allow side-to-side actuation, users are able to turn by shifting their weight to the side.

ReWalk Personal also allows users to sit, stand and depending on local regulatory approvals, climb and descend stairs.

Use on stairs is

currently not cleared by the FDA in the United States;

Upon completion of training, which generally consists of approximately 15

one-hour sessions, most users are able to put on and remove the device by themselves while sitting, typically in less than 15 minutes,

to operate the device independently and most are able to put on and remove the device by themselves.

Safety measures include crutches,

which provide additional stability, fall protection, which lowers users slowly and safely in the event of a malfunction, and the secure

“stand” mode, which automatically initiates if the user does not begin walking within two seconds.

ReWalk Personal is also

equipped with maintenance alarms, warnings, and backup batteries.

The rechargeable batteries are easily accessible and can be recharged

in any standard power outlet.

Our product labeling, however, requires users to be accompanied by a trained companion at all times when

using the ReWalk Personal.

ReWalk Personal 6.0

ReWalk Personal 6.0 Exoskeleton is a novel product that seeks to

fundamentally change the health and life experiences of users.

Designed for daily use, the device is battery-powered and consists of a

light, wearable exoskeleton with integrated motors at the joints, an array of sensors and a computer-based control system to power knee

and hip movement.

The user controls the device movement using a combination of user inputs on the wrist-worn controller, as well as through

subtle weight shifts of the upper body.

Because the exoskeleton supports its own weight and facilitates the user’s gait, users do

not expend unnecessary energy while walking.

The ReWalk Personal Exoskeleton also allows users to sit, stand and depending on local regulatory

approvals, climb and descend stairs and curbs.

This stair ascend/descend function is currently under review by the FDA in the United States.

Personal 6.0 :

intended for everyday use at home, at work or in the community with a trained companion.

We began marketing ReWalk Personal

in Europe with CE mark clearance at the end of 2012.

We received FDA clearance to market ReWalk Personal in the United States in June

We began marketing ReWalk

Personal Exoskeleton in Europe with CE mark clearance at the end of 2012.

We received FDA clearance to market ReWalk Personal in the United

States in June 2014.

ReWalk Personal units are all manufactured according to the same mechanical specifications.

Each unit is then permanently sized

to fit the individual user and the software is configured for the user’s specifications by the rehabilitation center, clinic or

Each unit is then permanently

sized to fit the individual user and the software is configured for the user’s specifications by the rehabilitation center, clinic,

or distributor.

We are currently offering our 6 th generation

Rehabilitation :

the current offering for clinics who wish to implement exo-skeleton training is comprised of our Personal 6.0 unit

along with multiple sizing of different parts, enabling multiple patient use.

The replacement of parts for different sizing is done by

the clinic team and can take between 5 to 15 minutes.

ReWalk Rehabilitation provides a valuable means of exercise and therapy.

enables individuals to evaluate their capacity for using ReWalk Personal in the future.

We began marketing a unique design for use in

hospitals, rehabilitation centers and stand-alone training centers in the United States and Europe in 2011 and in December 2020, we decided

to end the production of this unique design.

Additionally, we have received regulatory approval to sell the

ReWalk Personal device in other countries.

In the future we intend to seek approval from the applicable regulatory agencies in other jurisdictions

where we may seek to market ReWalk Personal.

For more information about the safety of using our SCI products see “Part I, Item 1A.

Risk Factors—Risks Related to our Business and our Industry— Defects in our products or the software that drives them could

adversely affect the results of our operations.

Overview of Spinal Anatomy and Spinal Cord Injury

Spinal Anatomy

the current offering for clinics who wish to implement exoskeleton

training is composed of our Personal 6.0 unit along with multiple sizing of different parts, enabling multiple patient use.

ReWalk Rehabilitation

provides a valuable means of exercise and therapy.

It also enables individuals to evaluate their capacity for using ReWalk Personal in

We began marketing a unique design for use in hospitals, rehabilitation centers and stand-alone training centers in the United

States and Europe in 2011 and, as of December 2020, we have eliminated the need for a unique design for the rehabilitation units and instead

shifted to offering a sizing and accessory kit that adapts the Personal 6.0 base unit to enable fitting across multiple users in a clinic

ReWalk Personal 6.0

Additionally, we have received regulatory approval

to sell the ReWalk Personal device in other countries.

In the future we intend to seek approval from the applicable regulatory agencies

in other jurisdictions where we may seek to market ReWalk Personal.

For more information about the safety of using our SCI products see

“Part I, Item 1A.

Risk Factors—Risks Related to our Business and our Industry— Defects in our products or the software

that drives them could adversely affect the results of our operations.”

Overview of Spinal Cord Injury

Spinal Cord Injury

The spine is the central core of the human skeleton and provides

structural support, alignment, and flexibility to the body.

It consists of 24 interlocking bones, called vertebrae, which are stacked

on top of one another.

The spine is comprised of five regions, of which there are three primary regions:

cervical, thoracic, and lumbar.

In addition, there is also the sacral region, or sacrum, a triangular-shaped bone, and the coccyx, or “tailbone,” the bottom

portion of the spine.

The spinal cord, housed inside the bony spinal column, is a complex

The spinal cord, housed inside the bones of the spinal column, is a complex

bundle of nerves serving as the main pathway for information connecting the brain, and nervous system.

The spinal cord is divided into

31 segments that feed sensory impulses into the spinal cord, which in turn relays them to the brain.

Conversely, motor impulses generated

in the brain are relayed by the spinal cord to the spinal nerves, which pass the impulses to muscles and glands.

The spinal cord mediates

the reflex responses to some sensory impulses directly, without recourse to the brain, for example, when a person’s leg is tapped,

producing the knee jerk reflex.

Spinal Cord Injury

Spinal cord injury is the result of a direct trauma to the nerves

themselves or damage to the surrounding bones and soft tissues which ultimately impacts the spinal cord.

Spinal cord damage results in

a loss of function, such as mobility or feeling.

Spinal cord injury is a serious

medical condition that occurs as a result of physical damage to the nerves of the spinal cord,.

resulting in a loss of function, such

as mobility or feeling.

In most people who have spinal cord injury, the spinal cord is intact.

Spinal cord injury

is not the same as back injury, which may result from pinched nerves or ruptured disks.

Even when a person sustains a break in a vertebra

or vertebrae, there may not be any spinal cord injury if the spinal cord itself is not affected.

There are two types of spinal cord injury

– complete and incomplete.

In a complete injury, a person loses all ability to feel and voluntarily move below the level of the

In an incomplete injury, there is some functioning below the level of the injury.

Spinal cord injury is not the same as back

injury, which may result from pinched nerves or ruptured disks.

Even when a person sustains a break in a vertebra or vertebrae, there

may not be any spinal cord injury if the spinal cord itself is not affected.

There are two types of spinal cord injury – complete

and incomplete.

In a complete injury, a person loses all ability to feel and voluntarily move below the level of the injury.

In an incomplete

injury, there is some functioning below the level of the injury.

Upon examination, a patient is assigned a level of injury depending

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Clinical evidence

Published clinical studies indicate ReWalk Personal’s ability to deliver a functional

walking speed.

In addition, certain potential secondary health benefits have been reported by healthcare practitioners and ReWalk users,

including study participants.

Although these benefits have not been established as conclusive clinical data in randomized controlled trials,

these reported secondary health benefits include:

Published clinical studies indicate ReWalk Personal’s ability

to deliver a functional walking speed.

In addition, certain potential secondary health benefits have been reported by healthcare practitioners

and ReWalk users, including study participants.

Although these benefits have not been established as conclusive clinical data in randomized

controlled trials, these reported secondary health benefits include:

reduced pain;

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increase in oxygen uptake and heart rate as a result of walking as opposed to sitting and standing;

ability to ambulate at a speed greater than 0.4 meters per second, which is considered

to be conducive to outdoor related community ambulation;

ability to ambulate at a speed greater than 0.4 meters per second, which is considered to be conducive to outdoor related community

reduced hospitalizations.

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The young average age at time of

injury and significant remaining life expectancy, the likelihood of living at home and lifetime cost of treatment highlight the need for

an out-of-hospital solution with demonstrated health and social benefits.

The NSCISC estimates according to their 2021 report that there were 296,000 people in

the United States living with SCI, with an annual incidence of approximately 17,900 new cases per year.

According to the VA data there

are approximately 42,000 of such patients are veterans and are eligible for medical care and other benefits from the VA out of which 27,000

are receiving treatment annually.

With 25 VA spinal cord injury centers, the VA has the largest single network of spinal cord injury care

in the United States.

injury and significant remaining life expectancy, the likelihood of living at home, and the lifetime cost of treatment highlight the need

for an out-of-hospital solution with demonstrated health and social benefits.

The NSCISC estimates according to their 2021 report that there

were 296,000 people in the United States living with SCI, with an annual incidence of approximately 17,900 new cases per year.

to the VA data there are approximately 42,000 of such patients who are veterans and are eligible for medical care and other benefits from

the VA, out of which the VA states that 27,000 veterans are receiving SCI treatment annually.

With 25 VA spinal cord injury centers designated

SCI/D Hub locations, the VA has the largest single network of spinal cord injury care in the United States.

The University of Alabama-Birmingham Department of Physical Medicine

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discharge, 87% of persons with spinal cord injuries are sent to private, non-institutional residence (in most cases, their homes prior

Based on information from a 2017 report by the NSCISC, 40.4% of the total U.S.

of SCI patients suffered injuries between levels T4 and L5.

Four published ReWalk trials for SCI patients had an aggregate screening acceptance

rate of 50% considering all current FDA limitations, resulting in an estimated 20.2% of the total population of SCI patients can be considered

as candidates for current ReWalk Personal 6.0 product according to the device instructions for use.

For important qualifying information

about this determination, see “Part I, Item 1A.

Risk Factors—Risks Related to our Business and our Industry—The market

for medical exoskeletons, including soft suit devices, remains relatively new and unproven, and important assumptions about the potential

market for our current and future products may be inaccurate.”

Based on information from a 2021 report by the

NSCISC, 40% of the total U.S.

population of SCI patients suffered injuries between levels T4 and L5.

Four published ReWalk trials for

SCI patients had an aggregate screening acceptance rate of 50% considering all current FDA limitations, resulting in an estimated 20.2%

of the total population of SCI patients can be considered as candidates for current ReWalk Personal Exoskeleton according to the device

instructions for use.

For important qualifying information about this determination, see “Part I, Item 1A.

Risk Factors—Risks

Related to our Business and our Industry—The market for medical exoskeletons, including soft exo-suit devices, remains relatively

new and unproven, and important assumptions about the potential market for our current and future products may be inaccurate.”

Sales and Marketing activities

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As our business

has developed, we have shifted our commercialization efforts to marketing of our ReWalk Personal with insurance companies, physicians,

and physical therapists as a standard of care that can be used routinely at home, at work or in the community under the supervision of

a trained companion in accordance with the user assessment and training certification program.

We market and sell our products directly to third party payers,

institutions, including rehabilitation centers, individuals and through third-party distributors.

We sell our products directly in Germany

and the United States and primarily through distributors in our other markets.

has developed, we have shifted our commercialization efforts to also include marketing of our ReWalk Personal Exoskeleton with patients,

physicians, and physical therapists as a medically necessary intervention that can be used to enable a home-based functional ambulation

regimen that elevates the health and wellness of individuals living with SCI.

We market and sell our products directly to third

party payors, institutions, including rehabilitation centers, individuals and through third-party distributors.

We sell our products directly

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

In our direct markets, we have established relationships

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United States

In the United States rehabilitation centers generally purchase

the ReWalk Rehabilitation unit and then charge patients for ReWalk therapy on a per-session basis.

These institutions may then seek reimbursement

from insurance companies for each session.

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.

In June 2018 the VA has updated this policy to include more training options for individuals who could not complete the training due to

distance from a VA site.

As of December 31, 2021, we had placed 25 units as part of the VA policy.

The VA accounted for 6.97% of our total

revenues for the year ended December 31, 2021.

We continue to work with the VA to accelerate the pace of implementation of the VA

policy including by accelerating the usage of the “Choice” program which allows training for our devices in additional sites

besides the VA regional hub sites.

In the U.S., individuals typically

obtain a ReWalk Personal Exoskeleton for home use through third-party medical coverage.

For an individual who suffered an SCI through

a work-related incident, workers’ compensation insurance can be a source of funding to purchase the device.

Similarly, for

veterans, an individual may be covered by the VA for the purchase of the device regardless of whether the SCI occurred during active

military service.

In December 2014, the VA issued a national policy or standard

operating procedure (SOP) for the evaluation, training, and procurement of ReWalk Personal exoskeleton systems for all qualifying veterans

across the United States and U.S.

The VA SOP is the first national coverage policy in the United States for qualifying

individuals who have suffered spinal cord injury.

In June 2018, the VA updated the SOP, in part, to expand training options for individuals

who could not complete the mandatory training due to excessive distance/drive times from a VA-designated site.

As of December 31, 2022,

we had placed 34 units as part of the VA policy.

The VA accounted for 14% of our total revenue for the year ended December 31, 2022.

We continue to work with the VA to both accelerate the pace of

implementation of the current VA policy nationally, and to again expand opportunities for veterans to gain access to assessments, training,

and devices in facilities outside VA’s traditional spinal cord injury “hub and spoke” infrastructure.

Community-based,

non-VA clinics are also being leveraged to allow veterans to be trained in communities closer to their homes, while still being reimbursed

by the VA as part of the VA’s Community Care Network program.

Successful commercialization depends in significant part on adequate

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the use of funds from insurance and/or accident settlements.

As of December 31, 2021, we had 15 cases pending in the United States for insurance

coverage decisions.

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

Risk Factors—Risks Related to our Business and our Industry—

We may fail to secure or maintain adequate insurance coverage or reimbursement for our products by third-party payors, which risk may

be heightened if insurers find the products to be investigational or experimental or if new government regulations change existing reimbursement

Additionally, such coverage or reimbursement, even if maintained, may not produce revenues that are high enough to allow us

to sell our products profitably.”

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 order to be covered and reimbursed by Medicare, the ReWalk Personal

6.0 must, among other things, be classified into an applicable Medicare benefit category.

In December 2021, CMS established a new

process for issuing Medicare benefit category determinations.

Until CMS issues a benefit category determination for a given product,

the product’s Medicare benefit category is evaluated by CMS contractors on a case-by-case basis as part of adjudicating individual

Medicare claims.

Medicare benefit categories include, but are not limited to, prosthetics, orthotics, and durable medical equipment.

In general, each Medicare benefit category has distinct coverage and payment rules and requirements.

As of December 31, 2022, we had 13 cases pending

in the United States for insurance coverage decisions.

According to the NSCISC report, approximately 56%

of the spinal cord injury population received primary coverage from Medicare and Medicaid within five years after their injury date, with

Medicare representing the larger primary payor.

In order to be covered and reimbursed by Medicare,

the ReWalk Personal Exoskeleton must, among other things, be classified into an applicable Medicare benefit category.

2021, CMS established a new process for issuing Medicare benefit category determinations.

Until CMS issues a nationwide benefit

category determination for a given product, the product’s Medicare benefit category is evaluated by CMS contractors on a case-by-case

basis as part of adjudicating individual Medicare claims.

Medicare benefit categories include, but are not limited to, prosthetics,

orthotics, and durable medical equipment.

In general, each Medicare benefit category has distinct coverage and payment rules and

requirements.

In December 2019, we submitted the first application

for a unique code to describe the ReWalk Personal 6.0 and, in July 2020, a unique code was issued for ReWalk Personal 6.0 (effective October

With the issuance of a unique code, we are currently seeking clarity from CMS as the applicable Medicare benefit category.

Depending on the specific Medicare benefit category determination by CMS, Medicare coverage and payment for a product could be more or

less favorable.

If CMS determines that no Medicare benefit category is available, this would mean that a product is not covered

While we believe that a positive response from CMS as to the applicable Medicare benefit category for the ReWalk Personal

6.0 may broaden coverage by commercial payors, we cannot currently predict how long it would take for us to receive a decision from CMS,

the outcome of any such decision or other business elements that may be decided by CMS in evaluating Medicare coverage or reimbursement

such as Medicare reimbursement per unit or Medicare coverage restrictions based on product labeling.

Nor can we predict how other

third-party payors will respond to any decision by CMS regarding Medicare coverage and reimbursement.

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

Risk Factors—Risks

Related to our Business and our Industry— We may fail to secure or maintain adequate insurance coverage or reimbursement for our

products by third-party payors, which risk may be heightened if insurers find the products to be investigational or experimental or if

new government regulations change existing reimbursement policies.

Additionally, such coverage or reimbursement, even if maintained, may

not produce revenues that are high enough to allow us to sell our products profitably.”

As part of our plan for growth, we intend to continue working with

both national and regional commercial insurance companies, health care practitioners, physicians, researchers, and the SCI community to

support efforts to demonstrate the benefits of our SCI Products.

In addition, we plan to pursue potential coverage policies with third

party payors based on supportive data and appeal rulings that have deemed exoskeleton devices a “medically necessary” under

the standard of care for individuals with SCI.

for a unique code to describe the ReWalk Personal Exoseleton and, in July 2020, a unique code was issued for ReWalk Personal Exoskeleton

(effective October 1, 2020).

With the issuance of a unique code, we are currently seeking clarity from CMS as to the applicable

Medicare benefit category.

The Medicare benefit category determination by CMS is a significant factor affecting the coverage and

payment level for a product.

If CMS determines that no Medicare benefit category is available, this results in the product not being

covered by Medicare.

While we believe that a determination from CMS as to the applicable Medicare benefit category for the ReWalk Personal

Exoskeleton may result in greater access to our exoskeletons by SCI patients, we cannot currently predict how long it would take for us

to receive a decision from CMS, the outcome of any such decision or other business elements that may be decided by CMS in evaluating Medicare

coverage or reimbursements such as Medicare reimbursement per unit or Medicare coverage restrictions based on product labeling.

can we predict how other third-party payors will respond to any decision by CMS regarding Medicare coverage and reimbursement.

In June 2022, ReWalk Robotics presented our request for CMS to

issue a nationwide Medicare benefit category determination for the ReWalk Personal exoskeleton system as part of CMS’s Bi-Annual

Healthcare Common Procedural Coding System (“HCPCS”) Public Meeting.

In September 2022, CMS issued a statement that

it intends to provide more information on the topic of the benefit category for personal exoskeletons in the near future and re-affirmed

that, in the meantime, coverage and payment decisions can be adjudicated by the MACs on a case-by-case basis.

ReWalk is continuing

to work with CMS and the Durable Medical Equipment Prosthetics/Orthotics & Supplies (“DMEPOS”) MACs to pursue both a nationwide

benefit category determination from CMS and prompt and appropriated case-by-case adjudication of coverage while a nationwide benefit determination

For more information about coverage and reimbursement risk factors, see “Part

Risk Factors—Risks Related to our Business and our Industry.”

As part of our plan for growth, we intend to continue

working with both national and regional commercial insurance companies, health care practitioners, physicians, researchers, and the SCI

community to support efforts to demonstrate the benefits of our SCI Products.

In addition, we plan to pursue potential coverage policies

with third party payors based on supportive data and appeal rulings that have deemed exoskeleton devices a “medically necessary”

under the standard of care for individuals with SCI.

Our efforts in the future will be focused on continued education of third-party payors

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groups, ongoing communication as well continuing to seek greater clarity regarding Medicare coverage and reimbursement standards applicable

to the ReWalk Personal 6.0 device.

to the ReWalk Personal Exosleleton.

Reimbursement for ReWalk in Europe varies by country and historically

certain third-party payors have provided reimbursement for our products in certain cases in Germany and Italy.

We initially focused our European efforts in Germany where we continue

to make progress toward achieving ReWalk coverage from the various government, private, and worker’s compensation payers.

We initially focused our European efforts in Germany

where we continue to make progress toward achieving ReWalk coverage from the various government, private, and workers’ compensation

Specifically:

In September 2017, Barmer confirmed it will provide ReWalk systems to all qualifying

beneficiaries.

Barmer provides insurance coverage for nearly nine million people in Germany, as a member of the SHI network and one of

the most significant national insurers in the country.

Exoskeletons are provided to users that meet certain inclusion criteria and assessment

by the German Health Insurance Medical Service (Medizinischer Dienst der Krankenversicherungen) before and after training.

discussion with Barmer regarding a contract based on their 2017 decision.

In September 2017, the German insurer BARMER confirmed it will provide ReWalk systems to all qualifying beneficiaries.

BARMER provides

coverage for nearly nine million people in Germany, as a member of the SHI network and one of the most significant national insurers in

Exoskeletons are provided to users that meet certain inclusion criteria and assessment by the German Health Insurance Medical

Service (Medizinischer Dienst der Krankenversicherungen) before and after training.

We remain in discussion with BARMER regarding a contract

based on their 2017 decision.

In September 2017 Germany’s national social accident insurance provider, DGUV,

indicated that the DGUV’s member payers, including the health insurance association Berufsgenossenschaft

(also known as BG) and state insurers, will approve the supply of exoskeleton systems for qualifying beneficiaries on a case-by-case

indicated that the DGUV’s member payors, including the health insurance association Berufsgenossenschaft (also

known as BG) and state insurers, will approve the supply of exoskeleton systems for qualifying beneficiaries on a case-by-case basis.

DGUV is comprised of 36 different insurers, which provide coverage for more than 80 million individuals in Germany.

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In May 2020 the DGUV agreed to a binding offer

to the evaluation, training, and supply of the ReWalk Personal 6.0 device to qualified individuals.

In February 2018, the GKV-Spitzenverband (Central Federal Association of (the) Statutory

Health Insurance Funds) confirmed its decision to list the ReWalk Personal system in the German MDD, a comprehensive list of all medical

devices which are principally and regularly reimbursed by German SHI and PHI providers.

The ReWalk Personal was added to the official

German list of medical aids, code number 23.29.01.2001, in June 2018.

This decision means that ReWalk Personal is 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 have announced several new agreements with 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 with us that

outline the process to obtaining a device for eligible insured patients.

In March 2021 we entered into a contract with BKK Mobile Oil health insurance to supply ReWalk’s

Personal 6.0 System to eligible persons in Germany.

In June 2020, a certain SHI has appealed the decision of the State Social Court, which

ordered the supply of the SHI’s insured SCI person with ReWalk.

The State Social Court ruled and deemed ReWalk as the medical aid

which will directly compensate the plaintiff’s disability.

The SHI appealed this ruling with the Federal Social Court ( Bundessozialgericht ),

which now has to decide whether an exoskeleton, as an orthopedic aid that replaces the function of the legs and enables independent walking

and standing, serves to directly compensate for disability.

The cost-effectiveness of an aid that serves to directly compensate for a

disability is generally to be assumed and only examined if two actually equivalent but differently priced aids are available for selection.

The 3rd Senate of the Federal Social Court is expected to announce the hearing date in the coming months.

Patients who are covered under these contracts and policies

must be medically evaluated for their eligibility to use the ReWalk Personal device.

If medically qualified, the patient, along with his

or her physician, must apply for coverage of the device.

If a patient is found eligible and medically fit to use our Personal 6.0 device,

we first enter into a rental agreement which allows the patient the necessary period to train on how to use the device which usually takes

between 3 to 6 months and then after approval from the insurer the patient receives a personal device to use at home or in the community.

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.

to the evaluation, training, and supply of the ReWalk Personal Exoskeleton to qualified individuals.

In February 2018, the GKV-Spitzenverband (Central Federal Association of (the) Statutory Health Insurance Funds) confirmed its decision

to list the ReWalk Personal system in the German MDD, a comprehensive list of all medical devices which are principally and regularly

reimbursed by German SHI and PHI providers.

The ReWalk Personal was added to the official German list of medical aids, code number 23.29.01.2001,

in June 2018.

This decision means that ReWalk Personal is 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 SHIs such as TK and DAK-Gesundheit

and others as well as the first German Private Health Insurer (“PHI”) that chose to enter into an agreement with us that outline

the process to obtaining a device for eligible insured patients.

In March 2021 we entered into a contract with BKK Mobile Oil health insurance to supply

ReWalk’s Personal Exoskeleton to eligible persons in Germany.

In June 2020, BARMER appealed the decision of the State Social Court, which ordered the

supply of the SHI’s insured SCI person with ReWalk.

The State Social Court ruled and deemed ReWalk as the medical aid which will

directly compensate the plaintiff’s disability.

BARMER initially appealed this ruling with the Federal Social Court ( Bundessozialgericht ),

but later, in November 2022, withdrew its pending case and accepted the prior ruling from the state court that exoskeletons are considered

as a direct disability compensation.

This outcome means that an

eligible insured person with spinal cord injury (SCI) in Germany has a legal basis for the supply of an exoskeleton as an orthopedic aid

for direct disability compensation .

Patients in Germany who are covered under these contracts and policies must be medically evaluated

for their eligibility to use the ReWalk Personal device.

If medically qualified, the patient, along with his or her physician, must apply

for coverage of the device.

If a patient is found eligible and medically fit to use our Personal 6.0 device, we first enter into a rental

agreement which allows the patient the necessary period to train on how to use the device which usually takes between 3 to 6 months and

then after approval from the insurer the patient receives a personal device to use at home or in the community.

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

Exoskeleton for their beneficiaries within their system.

As of December 31, 2022, there were 47 insurance cases pending

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Additionally, such coverage or reimbursement, even if maintained, may

not produce revenues that are high enough to allow us to sell our products profitably.”

not produce revenue that is high enough to allow us to sell our products profitably.”

We continue to support clinical research and academic publications,

which we believe will further support the case for coverage.

We have distribution agreements in several European countries where

we also had success with reimbursement by private insurers, worker’s compensation.

One of the examples was achieved in March 2018,

when the Italian Ministry of Labor and Social Policy’s statutory insurance corporation put in place a coverage policy that will

provide exoskeleton systems for all qualifying beneficiaries.

This policy, the first of its kind in Italy, will provide individuals with

spinal cord injury access to obtain their own ReWalk Personal device so that they can stand and walk again.

Since the initiation of coverage,

we have supplied 10 units through our Italian distributor to individuals covered by this policy.

We have distribution agreements in several European

countries where we also had success with reimbursement by private insurers and worker’s compensation.

One of the examples was achieved

in March 2018, when the Italian Ministry of Labor and Social Policy’s statutory insurance corporation put in place a coverage policy

that will provide exoskeleton systems for all qualifying beneficiaries.

This policy, the first of its kind in Italy, provides individuals

with spinal cord injury access to obtain their own ReWalk Personal device so that they can stand and walk again.

Since the initiation

of coverage, we have supplied 10 units through our Italian distributor to individuals covered by this policy.

Other Funding Sources

In addition to being funded by third-party payors, including private

insurance plans, government programs such as the VA, and worker’s compensation, ReWalk Personal is also funded by self-payers.

includes individuals who purchase ReWalk with funds from legal settlements with insurance companies or third parties.

In addition to being funded by third-party payors,

including private insurance plans, government programs such as the VA, and workers’ compensation plans, ReWalk Personal is also

funded by self-payors.

This includes individuals who purchase ReWalk with funds from legal settlements with insurance companies or third

In June 2017 we unveiled our lightweight exo-suit ReStore system

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The ReStore product is comprised of a soft, fabric-based design

which connects to a lightweight waist pack and mechanical cables that help lift the patient’s affected leg in synchronized timing

that connects to a lightweight waist pack and mechanical cables that help lift the patient’s affected leg in synchronized timing

with their natural walking pattern.

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and cable, along with sensors attached to a stable point on the user’s calf and footplate in the user’s shoe.

transfers forces in a controlled manner and provides targeted assistance to the patient ankle during forward propulsion (plantarflexion)

and ground clearance (dorsiflexion), two key phases of the gait cycle.

The ReStore system is designed to provide advantages to stroke

rehabilitation clinics and therapists as compared to other traditional therapies and devices by improving the quality and pace of care,

supplying real-time analytics to optimize session productivity, and generating ongoing data reports to assist with tracking patient progress.

Published clinical trials that were conducted at Harvard using

the soft-suit design on stroke patients have shown varying levels of improvements, with the main ones being improved forward propulsion,

reductions in compensatory behaviors including paretic hip hiking and circumduction as well as reduction in metabolic burden associated

with post stroke walking.

There are currently two studies on-going with the ReStore device.

that are measuring the improvement in walking

speed following training with the soft suit as well as comparing the results of traditional training with soft suit training.

The main market for ReStore is rehabilitation clinics with a stroke

therapy program or clinics that would like to broaden their stroke presence.

This product is marketed and sold directly to rehabilitation

clinics for use during the course of the treatment of their patients which is generally reimbursed by commercial and government payors.

During the second half of 2019 we expanded our sales and marketing presence in the United States in order to accelerate product penetration

after receiving received FDA and CE clearance.

These efforts were impacted by the COVID-19 pandemic, as clinics and hospitals shifted

resources and attention during the pandemic.

Geographically we see our priorities as the United States and Europe.

Stroke incidence rate in the United States is 795,000 incidences

per year and the survival rate is approximately 80%.

provides targeted mechanical assistance to the patient’s ankle during forward propulsion (plantarflexion) and ground clearance (dorsiflexion),

two key phases of the gait cycle.

The ReStore system is designed to provide advantages to stroke rehabilitation clinics and therapists

as compared to other traditional therapies and devices by enabling the therapist to specifically target and train for improved propulsion

symmetry, which is a key contributor to improved walking speed and efficiency for patients recovering from stroke.

Published clinical trials using the soft exo-suit design on stroke

patients have shown varying levels of improvements, with the main ones being improved walking speed, improved propulsion symmetry, reductions

in compensatory behaviors including paretic hip hiking and circumduction as well as reduction in metabolic burden associated with post

stroke walking.

There are additional studies on-going with the ReStore device that examine the improvement in walking speed following

training with the soft exo-suit as well as comparing the results of traditional training with soft exo-suit training.

The main market for ReStore is rehabilitation clinics

with a stroke therapy program or clinics that would like to broaden their stroke presence.

This product is marketed and sold directly

to rehabilitation clinics for use during the treatment of their patients which is generally reimbursed by commercial and government payors.

During the second half of 2019 we expanded our sales and marketing presence in the United States to accelerate product penetration after

receiving FDA and CE clearance.

These efforts were adversely impacted by the COVID-19 pandemic, as clinics and hospitals shifted resources

and attention during the pandemic.

While we have seen some recovery as the COVID-19 pandemic has abated, we are still experiencing adverse

impacts from these resource shifts.

Geographically, we see our commercial priorities for the ReStore device as being the United States

Stroke incidence rate in the United States is 795,000

incidences per year and the survival rate is approximately 80%.

Of this stroke population, 80% are left with some type of lower limb disability.

This patient population seeks treatment in one of the approx.

1,600 primary and comprehensive inpatient, outpatient, and rehabilitation

This patient population seeks treatment in one of the approximately 1,600 primary and comprehensive inpatient, outpatient, and rehabilitation

clinics providing therapy to stroke patients.

With the clinical evidence we have to date on ReStore, its unique design and its cost-effectiveness

compared to other products, we believe the ReStore soft-suit has an opportunity to be adopted in multiple clinics during their

stroke patients therapy.

However, we also recognize that the process to achieve that might be long and will likely only occur once

national or regional healthcare providers include the device within their stroke therapy programs.

We also believe that in order to accelerate

adoption, further clinical evidence is required as well as continued education on the new ReStore design and its unique advantages compared

to current therapies and products.

compared to other products, we believe the ReStore soft exosuit has an opportunity to be adopted by clinics for use in therapy of their

stroke patients.

However, we also recognize that the process to achieve that might be long and will likely only occur once national

or regional healthcare providers include the device within their stroke therapy programs.

We also believe that to accelerate adoption,

further clinical evidence is required as well as continued education on the new ReStore design and its unique advantages compared to current

therapies and products.

As of December 31, 2022, and December 31, 2021, we had placed 33

and 30 ReStore units, respectively.

We are also in the stage of research with ReBoot, a soft exoskeleton

for stroke home and community use.

This product is a complementary product to ReStore, and it received Breakthrough Device Designation

from the FDA in November 2021.

The ReBoot is a lightweight, battery-powered orthotic exo-suit intended to assist ambulatory functions

in individuals with reduced ankle function related to neurological injuries, such as stroke.

The ReBoot is a customizable personalized

device intended for home and community use with an estimated market of 500,000 annual stroke patients who require walking assistance after

being discharged home.

We are currently finalizing the design which

will be followed by development of the ReBoot device and we will then potentially submit a premarket notification for regulatory clearance

with the FDA and other regulatory agencies after the completion of necessary clinical studies and market assessment.

We are also in the research stage of ReBoot, a soft exoskeleton

for stroke home and community use, and are currently evaluating the reimbursement landscape and the potential clinical impact of this

This product would be a complementary product to ReStore, and it received Breakthrough Device Designation from the FDA in November

The ReBoot is a lightweight, battery-powered exo-suit intended to assist ambulatory functions in individuals with reduced

ankle function related to neurological injuries, such as stroke.

The ReBoot is a customizable personalized device intended for home

and community use with an estimated market of approximately 400,000 annual stroke patients who require walking assistance after being

discharged home.

Further investment in the development path of the ReBoot has been temporarily paused in 2023 pending further determination

about the clinical and commercial opportunity of this device.

The market in which we operate is characterized by active competition

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prosthetic devices used in the clinic and/or home settings.

We are aware of a number of other companies developing competing

technology and devices, and some of these competitors may have greater resources, greater name recognition, broader product lines, or

larger customer bases than we do.

We are aware of several other companies developing competing technology

and devices, and some of these competitors may have greater resources, greater name recognition, broader product lines, or larger customer

bases than we do.

Our principal competitors in the medical exoskeleton market consist

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EKSO), Rex Bionics Pty, Cyberdyne (Tokyo Stock Exchange:

7779), FREE Bionics, DIH (formerly known as Hocoma),

AlterG, Wandercraft, and Bioness (acquired by Bioventus (NASDAQ:

Parker Hannifin (NYSE:

PH), FREE Bionics, Hocoma,

AlterG and Bioness (acquired by Bioventus (NASDAQ:

These products may also compete with the ReStore exo-suit, as well as manual

forms of gait training which do not involve robotic assistive devices.

PH) was a prior competitor but exited the

exoskeleton market in December 2022 with its divestiture of its Human Motion and Control business unit, which includes the Indego lower

limb exoskeleton line of products, to Ekso Bionics.

The competitors’ products may also compete with the ReStore soft exo-suit, as

well as manual forms of gait training which do not involve robotic assistive devices.

We believe that our ReWalk Personal device possesses key competitive

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We are also looking into

ways to promote the ReStore device through different advocacy groups to accelerate adoption and support the uniqueness of this technology

when compared to current therapies and products.

To date, multiple advocacy groups have issued public endorsements of the ReWalk Personal device, including

leading United States-based national organizations such as the United Spinal Association and the Dana and Christopher Reeves Foundation,

as well as others.

In addition, the National Institute for Health and Care excellence in the United Kingdom (also known as “NICE”),

has issued a public announcement regarding the ReStore device.”).

ways to promote the ReStore device through different neurorehabilitation conferences and professional organizations to accelerate adoption

and support the uniqueness of this technology when compared to current therapies and products.

To date, multiple advocacy groups have issued public endorsements

of the ReWalk Personal device, including leading United States-based national organizations such as the United Spinal Association and

the Dana and Christopher Reeves Foundation, as well as others.

In addition, the National Institute for Health and Care excellence in the

United Kingdom (also known as “NICE”), has issued a public announcement regarding the ReStore device.

Services and Customer Support

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regulatory clearance for, and commercialize new products and penetrate new product and geographic markets.”

We plan to focus our research and development efforts in the future

by continually improving and potentially expanding our functional technological platform, by expanding the indication of use of our lightweight

“soft suit” exoskeleton to other medical conditions, as well as home therapy with the ReBoot device or adding a new indication

Regarding our ReWalk Personal 6.0 product we are working on product improvement and expanded labeling which we plan to launch

following regulatory approval, and in the longer term by developing our next generation device with design improvements.

New medical indications

impacting the ability to walk that we may pursue include multiple sclerosis, cerebral palsy, Parkinson’s disease, and elderly assistance.

We are working on product design improvements and expanded labeling

for the ReWalk Personal 6.0 product which we plan to launch following regulatory approvals.

In the longer term we are conducting research

for our next generation device with design improvements and advanced robotic technologies as part of the Human Robot Interaction Consortium

research program.

New medical indications impacting the ability to walk that we may pursue include multiple sclerosis, cerebral palsy,

Parkinson’s disease, and elderly assistance.

We conduct our research and development efforts mainly at our facility

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Research and Development Collaborations

On April 1, 2022, we entered a research and development cooperation

agreement with several companies and universities in the Human Robot Interaction (HRI) Consortium, part of the Israel Innovation Authority’s

MAGNET incentive program.

This incentive program provides grants for R&D collaboration as part of a consortium comprised of private

businesses and leading academic centers.

The goals of the HRI consortium are to “develop advanced technologies aimed at providing

robots with social capabilities, enabling them to carry out various tasks and effective interactions with different users in diverse operational

environments.” The total program has a budget of NIS 57 million, which includes funding for research and development grants

to help drive technological innovation.

The Consortium is a 3-year program which has allocated NIS 1.745 million to fund ReWalk-specific

projects over the first 18-month period of the program.

As a member of the HRI Consortium, we collaborate with several universities to

develop advanced technologies aimed at improving the human-exoskeleton interaction.

This research collaboration with top researchers

in the fields of robotics, behavioral sciences and human-computer interaction will seek to make the use of exoskeletons easier and more

natural to promote wider adoption of the technology.

On May 16, 2016, we entered into the Research Collaboration

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for the elderly and other medical applications.

Under the Collaboration Agreement, we pay Harvard quarterly installment payments to help

Under the Collaboration Agreement, we paid Harvard quarterly installment payments to help

fund the research.

Subject to the terms of the Collaboration Agreement, we and Harvard are required to report our respective research

Subject to the terms of the Collaboration Agreement, we and Harvard were required to report our respective research

results and findings to each other on a regular basis.

The Collaboration Agreement governs ownership of the research results and inventions

generated in performance of the research collaboration and provides us the option to negotiate with Harvard for a license to certain new

The Collaboration Agreement governed ownership of the research results and inventions

generated in performance of the research collaboration and provided us the option to negotiate with Harvard for a license to certain new

inventions of Harvard conceived in performance of the collaboration.

The Collaboration Agreement, as amended, expires on March 31, 2022.

We and Harvard might

consider a new arrangement to support our research efforts in the future.

Under applicable circumstances, we may terminate the Collaboration

Agreement if there is a loss of Harvard’s principal investigator or if we do not believe that we have or can secure sufficient funding

The Collaboration Agreement may also be terminated by either Harvard or us due to a material uncured breach by the other party

or upon termination of the Harvard License Agreement.

If the Collaboration Agreement terminates, other than in connection with a termination

of the Harvard License Agreement, the Harvard License Agreement will continue in full force and effect.

We may amend the Collaboration

Agreement in the future depending on our commercialization focus, market conditions, spending plan, and other factors.

Under the Harvard License Agreement, we have been granted

an exclusive, worldwide royalty-bearing license under certain patents of Harvard relating to lightweight “soft suit” exoskeleton

system technologies for lower limb disabilities, a royalty-free license under certain related know-how and the option to obtain a license

to certain inventions conceived under our joint research collaboration.

Harvard retains the right to practice the patents for research,

educational and scholarly purposes.

We are required to use commercially reasonable efforts to develop products under the Harvard License

Agreement in accordance with an agreed-upon development plan and to introduce and market such products commercially.

In addition to an

upfront fee and royalties on net sales, we are obligated to pay Harvard certain milestone payments upon the achievement of certain product

development and commercialization milestones.

We have also agreed to reimburse Harvard for expenses incurred in connection with the filing,

prosecution, and maintenance of the licensed patents.

The Collaboration Agreement concluded on March 31, 2022.

Under the Harvard License Agreement, we have been granted an exclusive,

worldwide royalty-bearing license under certain patents of Harvard relating to lightweight “soft suit” exoskeleton system

technologies for lower limb disabilities, a royalty-free license under certain related know-how and the option to obtain a license to

certain inventions conceived under our joint research collaboration.

Harvard retains the right to practice the patents for research, educational

and scholarly purposes.

We are required to use commercially reasonable efforts to develop products under the Harvard License Agreement

in accordance with an agreed-upon development plan and to introduce and market such products commercially.

In addition to an upfront fee

and royalties on net sales, we are obligated to pay Harvard certain milestone payments upon the achievement of certain product development

and commercialization milestones.

We have also agreed to reimburse Harvard for expenses incurred in connection with the filing, prosecution,

and maintenance of the licensed patents.

The Harvard License Agreement will continue in full force and effect

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to the other party’s material uncured breach.

The Collaboration Agreement and Harvard License Agreement contain,

as applicable, customary representations and warranties and customary enforcement, indemnification, and insurance provisions.

discussion of the Collaboration Agreement and Harvard License Agreement, see Note 9 to our consolidated financial statements for the fiscal

year ended December 31, 2021.

In September 2013, we entered into a strategic alliance with Yaskawa

Electric Corporation (“Yaskawa”), pursuant to which, among other arrangements, we granted Yaskawa the exclusive right to market,

distribute and commercialize our products in Japan, China and other East Asian countries.

In connection with the closing of the first

tranche of a private placement of our ordinary shares to Timwell Corporation Limited, a Hong Kong corporation (“Timwell”),

on May 15, 2018 we terminated the distribution rights granted to Yaskawa in China (including Hong Kong and Macau).

We terminated all other

distribution rights granted to Yaskawa effective September 24, 2020.

For more information on the Timwell private placement, see

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and

Capital Resources—Timwell Private Placement.”

The Harvard License Agreement contains, as applicable, customary

representations and warranties and customary enforcement, indemnification, and insurance provisions.

For further discussion of the Collaboration

Agreement and Harvard License Agreement, see Note 9 to our consolidated financial statements for the fiscal year ended December 31, 2022.

Intellectual Property

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was filed in May 2001 in the United States and would typically expire in May 2021.

However, this patent actually expires in April of 2022

due to patent term adjustment (PTA) of 689 days for delays in examination by the United States Patent and Trademark Office.

The corresponding

European patent to this United States patent was filed in February of 2002 and expires in February of 2022.

However, this patent actually will expire in April

of 2023 due to patent term adjustment (PTA) of 689 days for delays in examination by the United States Patent and Trademark Office.

We currently hold a registered trademark in the United States,

Europe and Israel as well as pending trademark application in the United Kingdom, for the mark “ReWalk”.

We currently hold

a registered trademark in United States, Europe and the United Kingdom for the mark “ReStore”.

Europe, Israel, and the United Kingdom, for the mark “ReWalk”.

We currently hold a registered trademark in United States,

Europe and the United Kingdom for the mark “ReStore”.

We cannot be sure that our intellectual property will provide

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in the United States requires either FDA clearance of a 510(k) premarket notification, approval of a premarket approval application (PMA),

or issuance of a de novo order.

Under the FFDCA, medical devices are classified into one of three classes—Class I, Class II or Class

III—depending on the degree of risk associated with each medical device and the extent of control needed to provide reasonable assurance

of safety and effectiveness.

Classification of a device is important because the class to which a device is assigned determines, among

other things, the necessity and type of FDA review required prior to marketing the device.

Class I devices are those for which reasonable

assurance of safety and effectiveness can be assured by adherence to general controls that include compliance with the applicable portions

of the FDA’s Quality System Regulation, or QSR, facility registration and product listing, reporting of adverse medical events,

and appropriate, truthful and non-misleading labeling, advertising, and promotional materials.

Class I also includes devices for which

there is insufficient information to determine that general controls are sufficient to provide reasonable assurance of the safety and

effectiveness of the device or to establish special controls to provide such assurance, but that are not life-supporting or life-sustaining

or for a use which is of substantial importance in preventing impairment of human health, and that do not present a potential unreasonable

risk of illness of injury.

or issuance of a de novo classification order.

Under the FFDCA, medical devices are classified into one of three classes—Class I,

Class II or Class III—depending on the degree of risk associated with each medical device and the extent of control needed to provide

reasonable assurance of safety and effectiveness.

Classification of a device is important because the class to which a device is assigned

determines, among other things, the necessity and type of FDA review required prior to marketing the device.

Class I devices are those

for which reasonable assurance of safety and effectiveness can be assured by adherence to general controls that include compliance with

the applicable portions of the FDA’s Quality System Regulation, or QSR, facility registration and product listing, reporting of

adverse medical events, and appropriate, truthful and non-misleading labeling, advertising, and promotional materials.

Class I also includes

devices for which there is insufficient information to determine that general controls are sufficient to provide reasonable assurance

of the safety and effectiveness of the device or to establish special controls to provide such assurance, but that are not life-supporting

or life-sustaining or for a use which is of substantial importance in preventing impairment of human health, and that do not present a

potential unreasonable risk of illness of injury.

Class II devices are those for which general controls alone are

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As a result, manufacturers of most Class II devices are required to submit

to the FDA premarket notifications under Section 510(k) of the FFDCA requesting classification of their devices in order to market

or commercially distribute those devices.

To obtain a 510(k), a substantial equivalence determination for their devices, manufacturers

must submit to the FDA premarket notifications demonstrating that the proposed device is “substantially equivalent” to a predicate

device already on the market.

A predicate device is a legally marketed device that is not subject to premarket approval, or PMA, meaning,

(i) a device that was legally marketed prior to May 28, 1976 (pre-amendments device) and for which a PMA is not required, (ii) a

device that has been reclassified from Class III to Class II or I, or (iii) a device that was found substantially equivalent through the

510(k) process.

If the FDA agrees that the device is substantially equivalent to a predicate device currently on the market, it will grant

510(k) clearance to commercially market the device.

If the device is not “substantially equivalent” to a previously cleared

device, the device is automatically a Class III device.

The device sponsor must then fulfill more rigorous premarket approval requirements

or can request a risk-based classification determination for the device in accordance with the “de novo” process, which is

a route to market for medical devices that are low to moderate risk but are not substantially equivalent to a predicate device.

to the FDA premarket notifications under Section 510(k) of the FFDCA in order to market or commercially distribute those devices.

To obtain 510(k) clearance, a substantial equivalence determination for their devices, manufacturers must submit to the FDA a premarket

notification demonstrating that the proposed device is “substantially equivalent” to a predicate device already on the market.

A predicate device is a legally marketed device that is not subject to premarket approval, or PMA, meaning, (i) a device that was legally

marketed prior to May 28, 1976 (pre-amendments device) and for which a PMA is not required, (ii) a device that has been reclassified

from Class III to Class II or I, (iii) a device that was found substantially equivalent through the 510(k) process or (iv) a device that

was granted marketing authorization through the de novo classification process under section 513(f)(2) of the FFDCA.

If the FDA agrees

that the device is substantially equivalent to a predicate device currently on the market, it will grant 510(k) clearance to commercially

market the device.

If the device is not “substantially equivalent” to a previously cleared device, the device is automatically

a Class III device.

The device sponsor must then fulfill more rigorous premarket approval requirements or can request a risk-based classification

determination for the device in accordance with the “de novo” classification process, which is a route to market for medical

devices that are low to moderate risk but are not substantially equivalent to a predicate device.

Devices that are intended to be life sustaining or life supporting,

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If the FDA accepts the application for review, it has 180 days under the FFDCA to complete its review

of a PMA, although in practice, the FDA’s review often takes significantly longer, and can take up to several years.

of a PMA, although in practice, the FDA’s review often takes significantly longer, and can take one year or even longer.

Clinical trials are almost always required to support PMAs and

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IDE will automatically become effective 30 days after receipt by the FDA, unless the FDA denies the application or notifies the company

that the investigation is on hold and may not begin.

If the FDA determines that there are deficiencies or other concerns with an IDE that

require modification of the study, the FDA may permit a clinical trial to proceed under a conditional approval.

In addition, the study

must be approved by, and conducted under the oversight of, an Institutional Review Board, or IRB, for each clinical site.

If the device

presents a non-significant risk to the patient, a sponsor may begin the clinical trial after obtaining approval for the trial by one or

more IRBs without separate approval from the FDA, but must still comply with abbreviated IDE requirements, such as monitoring the investigation,

ensuring that the investigators obtain informed consent, and labeling and record-keeping requirements.

that the investigation may not begin.

If the FDA determines that there are deficiencies or other concerns with an IDE that require modification

of the study, the FDA may permit a clinical trial to proceed under a conditional approval.

In addition, the study must be approved by,

and conducted under the oversight of, an Institutional Review Board, or IRB, for each clinical site.

If the device presents a non-significant

risk to the patient, a sponsor may begin the clinical trial after obtaining approval for the trial by one or more IRBs without separate

approval from the FDA, but must still comply with abbreviated IDE requirements, such as monitoring the investigation, ensuring that the

investigators obtain informed consent, and labeling and record-keeping requirements.

In June 2014, the FDA granted our petition for “de novo”

classification, which provides a route to market for medical devices that are low to moderate risk, but are not substantially equivalent

to a predicate device, and classified ReWalk as Class II subject to special controls.

The ReWalk is intended to enable individuals with

spinal cord injuries to perform ambulatory functions under supervision of a specially trained companion, and inside rehabilitation institutions.

The special controls established in the de novo order include the following:

compliance with medical device consensus standards;

testing to demonstrate safe and effective use considering the level of supervision necessary and the use environment;

non-clinical performance

testing, including durability testing to demonstrate that the device performs as intended under anticipated conditions of use;

classification, and classified ReWalk as a Class II powered exoskeleton device subject to special controls.

The ReWalk is intended to

enable individuals with spinal cord injuries to perform ambulatory functions under supervision of a specially trained companion, and inside

rehabilitation institutions.

The special controls established in the de novo classification order for all powered exoskeleton devices

include the following:

clinical testing to demonstrate safe and effective use considering the level of supervision necessary and the use

non-clinical safety and performance testing, including durability testing to demonstrate that the device performs as intended

under anticipated conditions of use;

a training program;

and labeling related to device use and user training.

The special controls of this de novo order also apply to competing products

seeking FDA clearance.

The special controls of

this de novo order also apply to competing powered exoskeleton products seeking FDA clearance.

In June 2019, the FDA issued a 510(k) clearance for ReStore which

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ReStore complies with special controls

includes the following:

compliance with medical device consensus standards;

clinical testing to demonstrate safe and effective use considering

the level of supervision necessary and the use environment;

non-clinical performance testing, including durability testing, to demonstrate

that the device performs as intended under anticipated conditions of use;

a training program;

and labeling related to device use and user

In order for us to market ReStore, we must comply with both general controls, including controls related to quality, facility

registration, reporting of adverse events and labeling, and the special controls established for the device.

Failure to comply with the

general and special controls could lead to removal of ReStore from the market, which would have a material adverse effect on our business.

for powered exoskeletons as described above.

In order for us to market ReStore and ReWalk, we must comply with both these special controls

as well as general controls, including controls related to quality, facility registration, reporting of adverse events and labeling.

to comply with the general and special controls could lead to removal of ReStore or ReWalk from the market, which would have a material

adverse effect on our business.

In June 2022, ReWalk submitted a 510(k) premarket notification

for ReWalk Personal 6.0 seeking to enable the stairs functionality and add uses on stairs and curbs to the indication for use for the

device in the US.

FDA issued a request for additional information, to which ReWalk responded and is pending FDA review.

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

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Post-market Regulatory Requirements

After a device is cleared for marketing, and prior to marketing,

numerous regulatory requirements apply.

After a device is cleared for marketing, numerous regulatory requirements

These include:

establishment registration and device listing;

development of a quality assurance system, including establishing and implementing

procedures to design and manufacture devices;

labeling regulations that prohibit the promotion of products for unapproved or “off-label”

uses and impose other restrictions on labeling;

FDA’s Unique Device Identification requirements that call for a unique device

identifier (UDI) on device labels and packages and submission of data to the FDA’s Global Unique Device Identification Database

medical device reporting regulations that require manufacturers to report to the FDA

if a device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute

to a death or serious injury if it were to recur;

and corrections and removal reporting regulations that require manufacturers report

to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy

a violation of the FFDCA that may present a risk to health;

development of a quality assurance system, including establishing and implementing procedures to design and manufacture devices;

labeling regulations that prohibit the promotion of products for unapproved or “off-label” uses and impose other restrictions

FDA’s Unique Device Identification requirements that call for a unique device identifier (UDI) on device labels and packages

and submission of data to the FDA’s Global Unique Device Identification Database (GUDID);

medical device reporting regulations that require manufacturers to report to the FDA if a device may have caused or contributed to

a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur;

and corrections and removal reporting regulations that require manufacturers report to the FDA field corrections and product recalls or

removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FFDCA that may present a risk to

Post-market surveillance.

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report, and that ReWalk had fulfilled the 522 postmarket study requirement.

In accordance with FDA’s request, ReWalk will

submit a 510(k) Postmarket Surveillance Study Labeling Update to modify the device labeling to reflect the findings of the study.

In accordance with FDA’s request, ReWalk submitted

a 510(k) amendment to our original submission to reflect the findings of the study.

FDA acknowledged and closed the amendment in

Our manufacturing processes are required to comply with the applicable

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operating restrictions or partial suspension or total shutdown of production;

refusing or delaying requests for approval of pre-market approval applications relating

to new products or modified products;

refusing or delaying requests for approval of pre-market approval applications relating to new products or modified products;

withdrawing PMA approval;

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Sales in other jurisdictions are subject to the foreign government

regulations of the relevant jurisdiction, and in most cases we must obtain approval by the appropriate regulatory authorities before we

can commence clinical trials or marketing activities in those countries.

regulations of the relevant jurisdiction, and in most cases, we must obtain approval by the appropriate regulatory authorities before

we can commence clinical trials or marketing activities in those countries.

The approval process varies from country to country, and the

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requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly from country to country.

The policies of the FDA and foreign regulatory authorities may change, and additional government regulations

may be enacted that could prevent or delay regulatory approval of our products and could also increase the cost of regulatory compliance.

We cannot predict the likelihood, nature, or extent of adverse governmental regulation that might arise from future legislative or administrative

action, either in the United States or abroad.

of the FDA and foreign regulatory authorities may change, and additional government regulations may be enacted that could prevent or delay

regulatory approval of our products and could also increase the cost of regulatory compliance.

We cannot predict the likelihood, nature,

or extent of adverse governmental regulation that might arise from future legislative or administrative action, either in the United States

Anti-kickback, False Claims and Other

Healthcare Fraud and Abuse Laws

In the United States, there are federal and state anti-kickback laws that prohibit the

payment or receipt of kickbacks, bribes or other remuneration intended to induce the purchase or recommendation of healthcare products

and services.

Violations of these laws can lead to civil and criminal penalties, including exclusion from participation in federal healthcare

These laws apply to manufacturers of products, such as us, with respect to our financial relationship with hospitals, physicians

and other potential purchasers or acquirers of our products.

government has published regulations that identify “safe harbors”

or exemptions for certain practices from enforcement actions under the federal anti-kickback statute, and we will seek to comply with

the safe harbors where possible.

To qualify for a safe harbor, the activity must fit squarely within the safe harbor.

Arrangements that

do not meet a safe harbor are not necessarily illegal but must be evaluated on a case-by-case basis.

The Patient Protection and Affordable Care Act, as amended by the

Health Care and Education Affordability Reconciliation Act, or collectively, the PPACA, among other things, amends the intent requirement

of the federal anti-kickback and criminal healthcare fraud statutes.

A person or entity no longer needs to have actual knowledge of these

statutes or specific intent to violate them.

In addition, the PPACA provides that the government may assert that a claim that includes

items or services resulting from a violation of the federal anti-kickback statute constitutes a false or fraudulent claim for purposes

of the False Claims Act.

The PPACA also imposes new reporting and disclosure requirements on device manufacturers for any “transfer

of value” made or distributed to physicians and teaching hospitals.

Device manufacturers will also be required to report and disclose

any investment interests held by physicians and their immediate family members during the preceding calendar year.

A number of provisions

of PPACA also reflect increased focus on and funding of healthcare fraud enforcement.

The federal civil Falls Claims Act (“FCA”) prohibits,

among other things, any person or entity from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment

to, or approval by, the federal government, knowingly making, using, or causing to be made or used a false record or statement material

to a false or fraudulent claim to the federal government, or avoiding, decreasing, or concealing an obligation to pay money to the federal

A claim includes “any request or demand” for money or property presented to the U.S.

The civil FCA

has been used to assert liability on the basis of kickbacks and other improper referrals, improper use of Medicare provider or supplier

numbers when detailing a provider of services, improper promotion of off-label uses not covered by a device’s clearance or approval,

and allegations as to misrepresentations with respect to products, contract requirements, and services rendered.

In addition, private

payors have been filing follow-on lawsuits alleging fraudulent misrepresentation, although establishing liability and damages in these

cases is more difficult than under the FCA.

Intent to deceive is not required to establish liability under the civil FCA.

Civil FCA actions

may be brought by the government or may be brought by private individuals on behalf of the government, called “qui tam” actions.

If the government decides to intervene in a qui tam action and prevails in the lawsuit, the individual will share in the proceeds from

any fines or settlement funds.

If the government declines to intervene, the individual may pursue the case alone.

The civil FCA provides

for treble damages and a civil penalty for each false claim, such as an invoice or pharmacy claim for reimbursement, which can aggregate

into millions of dollars.

For these reasons, since 2004, FCA lawsuits against biopharmaceutical companies have increased significantly

in volume and breadth, leading to several substantial civil and criminal settlements, as much as $3.0 billion, regarding certain

sales practices and promoting off label uses.

Civil FCA liability may further be imposed for known Medicare or Medicaid overpayments that

are not refunded within 60 days of discovering the overpayment, even if the overpayment was not caused by a false or fraudulent act.

In addition, conviction or civil judgment for violating the FCA may result in exclusion from federal health care programs, and suspension

and debarment from government contracts, and refusal of orders under existing government contracts.

In the United States, there are federal and state anti-kickback

laws that prohibit the payment or receipt of kickbacks, bribes or other remuneration intended to induce the purchase or recommendation

of healthcare products and services.

Violations of these laws can lead to civil and criminal penalties, including exclusion from participation

in federal healthcare programs.

These laws apply to manufacturers of products, such as us, with respect to our financial relationship

with hospitals, physicians and other potential purchasers or acquirers of our products.

government has published regulations

that identify “safe harbors” or exemptions for certain practices from enforcement actions under the federal anti-kickback

statute, and we will seek to comply with the safe harbors where possible.

To qualify for a safe harbor, the activity must fit squarely

within the safe harbor.

Arrangements that do not meet a safe harbor are not necessarily illegal but must be evaluated on a case-by-case

A person or entity may be found to violate the anti-kickback statute even absent actual knowledge of this statute or specific intent

to violate it.

In addition, the government may assert that a claim that includes items or services resulting from a violation of the federal

anti-kickback statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act (“FCA”).

The civil FCA prohibits, among other things, any person or entity

from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment to, or approval by, the federal government,

knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal

government, or avoiding, decreasing, or concealing an obligation to pay money to the federal government.

A claim includes “any request

or demand” for money or property presented to the U.S.

The civil FCA has been used to assert liability on the basis

of kickbacks and other improper referrals, improper use of Medicare provider or supplier numbers when detailing a provider of services,

improper promotion of off-label uses not covered by a device’s clearance or approval, and allegations as to misrepresentations with

respect to products, contract requirements, and services rendered.

In addition, private payors have been filing follow-on lawsuits alleging

fraudulent misrepresentation, although establishing liability and damages in these cases is more difficult than under the FCA.

to deceive is not required to establish liability under the civil FCA.

Civil FCA actions may be brought by the government or may be brought

by private individuals on behalf of the government, called “qui tam” actions.

If the government decides to intervene in a

qui tam action and prevails in the lawsuit, the individual will share in the proceeds from any fines or settlement funds.

If the government

declines to intervene, the individual may pursue the case alone.

The civil FCA provides for treble damages and a civil penalty for each

false claim, such as an invoice or pharmacy claim for reimbursement, which can aggregate into millions of dollars.

For these reasons,

FCA lawsuits against biopharmaceutical and device companies have increased significantly in volume and breadth, leading to several substantial

civil and criminal settlements, as much as $3.0 billion, regarding certain sales practices and promoting off label uses.

liability may further be imposed for known Medicare or Medicaid overpayments that are not refunded within 60 days of discovering

the overpayment, even if the overpayment was not caused by a false or fraudulent act.

In addition, conviction or civil judgment for violating

the FCA may result in exclusion from federal health care programs, and suspension and debarment from government contracts, and refusal

of orders under existing government contracts.

The government may further prosecute conduct constituting a false

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false, fictitious, or fraudulent and, unlike the civil FCA, requires proof of intent to submit a false claim.

The civil monetary penalties statute is another potential statute

under which medical device companies may be subject to enforcement.

The civil monetary penalties statute is another statute under which

medical device companies may potentially be subject to enforcement.

Among other things, the civil monetary penalties statue imposes fines

against any person who is determined to have knowingly presented, or caused to be presented, claims to a federal healthcare program that

the person knows, or should know, is for an item or service that was not provided as claimed or is false or fraudulent.

against any person who offers to provide remuneration to any individual eligible for benefits under Medicare or Medicaid that the offerer

knows or should know is likely to influence the individual to order or receive from a particular provider or supplier of any item or service

reimbursable under those programs.

The federal Health Insurance Portability and Accountability Act

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no longer needs to have actual knowledge of the statute, or the specific intent to violate it, to have committed a violation.

The ACA further created new federal requirements for reporting,

by applicable drug manufacturers of covered products, payments and other transfers of value to physicians and teaching hospitals, and

ownership and investment interests held by physicians and other healthcare providers and their immediate family members, including the

Physician Payments Sunshine Act.

The Physician Payments Sunshine Act (“Sunshine Act”)

requires annual reporting, by applicable device and drug manufacturers, of covered products, payments and other transfers of value to

certain health care providers, and ownership and investment interests held by physicians and their immediate family members.

Further, we may be subject to data privacy and security regulation

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on marketing practices;

or require companies to track and report information related to payments, gifts, and other items of value to physicians

or require companies to track and report information related to payments, and other items of value to physicians

and other healthcare providers.

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civil FCA if the violations are alleged to have caused the government to pay a false or fraudulent claim.

To the extent that any of our products are sold in a foreign country, we may be subject

to similar foreign laws and regulations, which may include, for instance, applicable post-marketing requirements, including safety surveillance,

anti-fraud and abuse laws, and implementation of corporate compliance programs and reporting of payments or transfers of value to healthcare

professionals.

To the extent that any of our products are sold in a foreign country,

we may be subject to similar foreign laws and regulations, which may include, for instance, applicable post-marketing requirements, including

safety surveillance, anti-fraud and abuse laws, and implementation of corporate compliance programs and reporting of payments or transfers

of value to healthcare professionals.

Coverage and Reimbursement

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In the United States, it is also common for government and private health plans to

use coverage determinations to leverage rebates from labelers in order to reduce the plans’ net costs.

use coverage determinations to leverage rebates from labelers to reduce the plans’ net costs.

These restrictions and limitations

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The cost containment measures that healthcare payors and providers are instituting

and any healthcare reform could significantly reduce our revenues from the sale of any approved product candidates.

and any healthcare reform could significantly reduce our revenue from the sale of any approved product candidates.

Healthcare Reform Measures

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The Patient Protection and Affordable Care Act, as amended by the

Health Care and Education Affordability Reconciliation Act, or collectively the Affordable Care Act, substantially changed the way healthcare

is financed by both governmental and private insurers, and significantly impacts the pharmaceutical industry.

The Affordable Care Act

is intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against healthcare

fraud and abuse, add new transparency requirements for healthcare and health insurance industries, impose new taxes and fees on pharmaceutical

and medical device manufacturers, and impose additional health policy reforms.

The Affordable Care Act has been subject to challenges in the courts.

On December 14, 2018, a Texas U.S.

District Court Judge ruled that the Affordable Care Act is unconstitutional in its entirety because

the “individual mandate” was repealed by Congress.

Health Care and Education Affordability Reconciliation Act, or collectively the ACA, substantially changed the way healthcare is financed

by both governmental and private insurers, and significantly impacts the pharmaceutical industry.

The ACA is intended to broaden access

to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against healthcare fraud and abuse, add new

transparency requirements for healthcare and health insurance industries, impose new taxes and fees on pharmaceutical and medical device

manufacturers, and impose additional health policy reforms.

The ACA has been subject to challenges in the courts.

December 14, 2018, a Texas U.S.

District Court Judge ruled that the ACA is unconstitutional in its entirety because the “individual

mandate” was repealed by Congress.

On December 18, 2019, the Fifth Circuit U.S.

Court of Appeals held

that the individual mandate is unconstitutional and remanded the case to the Texas District Court to reconsider its earlier invalidation

of the entire Affordable Care Act.

Court of Appeals held that the individual

mandate is unconstitutional, but did not invalidate the entire law, and remanded the case to the Texas District Court to reconsider its

earlier invalidation of the entire ACA.

An appeal was taken to the U.S.

Supreme Court.

On June 17, 2021, the Supreme Court ruled that

the plaintiffs lacked standing to challenge the law as they had not alleged personal injury traceable to the allegedly unlawful conduct.

As a result, the Supreme Court did not rule on the constitutionality of the ACA or any of its provisions.

Supreme Court, which ruled on June 17, 2021, that the plaintiffs

lacked standing to challenge the law as they had not alleged personal injury traceable to the allegedly unlawful conduct.

the Supreme Court did not rule on the constitutionality of the ACA or any of its provisions.

Other legislative changes have been proposed and adopted since

passage of the Affordable Care Act.

The Budget Control Act of 2011, among other things, created the Joint Select Committee on Deficit

Reduction to recommend proposals in spending reductions to Congress.

The Joint Select Committee did not achieve its targeted deficit reduction

of an amount greater than $1.2 trillion for the fiscal years 2012 through 2021, triggering the legislation’s automatic reductions

to several government programs.

These reductions included aggregate reductions to Medicare payments to healthcare providers of up to 2.0%

per fiscal year.

The Bipartisan Budget Act of 2018 retained the federal budget “sequestration” Medicare payment reductions

of 2%, and extended it through 2027 unless congressional action is taken, and also increased labeler responsibility for prescription costs

in the Medicare Part D coverage gap.

On January 2, 2013, the American Taxpayer Relief Act was signed into law, which, among other

things, reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and

increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

Further legislative and regulatory changes under the Affordable

Care Act remain possible, although the Biden Administration has signaled that it plans to build on the Affordable Care Act and expand

the number of people who are eligible for subsidies under it.

President Biden indicated that he intends to use executive orders

to undo changes to the Affordable Care Act made by the Trump administration and would advocate for legislation to build on the Affordable

It is unknown what form any such changes or any law would take, and how or whether it may affect our business in the future.

We expect that changes or additions to the Affordable Care Act, the Medicare and Medicaid programs, changes allowing the federal government

to directly negotiate drug prices and changes stemming from other healthcare reform measures, especially with regard to healthcare access,

financing or other legislation in individual states, could have a material adverse effect on the healthcare industry.

passage of the ACA.

The Budget Control Act of 2011, among other things, created the Joint Select Committee on Deficit Reduction to recommend

proposals in spending reductions to Congress.

The Joint Select Committee did not achieve its targeted deficit reduction of an amount greater

than $1.2 trillion for the fiscal years 2012 through 2021, triggering the legislation’s automatic reductions to several government

These reductions included aggregate reductions to Medicare payments to healthcare providers of up to 2.0% per fiscal year.

The Bipartisan Budget Act of 2018 retained the federal budget “sequestration” Medicare payment reductions of 2% and extended

it through 2027 unless congressional action is taken, and also increased labeler responsibility for prescription costs in the Medicare

Part D coverage gap.

On January 2, 2013, the American Taxpayer Relief Act was signed into law, which, among other things, reduced

Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased the

statute of limitations period for the government to recover overpayments to providers from three to five years.

Further legislative and regulatory changes under the ACA remain

possible, although President Biden indicated that he intends to use executive orders to undo changes to the ACA made by the Trump administration

and would advocate for legislation to build on the ACA.

It is unknown what form any such changes or any law would take, and how

or whether it may affect our business in the future.

We expect that changes or additions to the ACA or the Medicare and Medicaid programs,

changes allowing the federal government to directly negotiate drug prices and changes stemming from other healthcare reform measures,

especially with regard to healthcare access, financing or other legislation in individual states, could have a material adverse effect

on the healthcare industry.

At the state level, legislatures have increasingly passed legislation

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We have contracted with Sanmina for the sourcing of all components

and raw materials necessary for the manufacture of our products although there are instances that we purchase raw material ourselves.

and raw materials necessary for the manufacture of our products although there are instances that we purchase raw materials ourselves.

Components of our products and raw materials come from suppliers in the United States, Europe, China, and Israel, and we depend on certain

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However, during the pandemic we have seen several specific

parts, mainly electronic parts, suffer price increase.

parts, mainly electronic parts, suffer price increases.

Such prices are subject to a number of factors, including purchase volumes, general

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Compensation and Benefits

We provide our employees with competitive salaries and bonuses, opportunities for equity

ownership, and a robust employment package that promotes well-being across all aspects of our employees’ lives, including health

care, retirement planning, and paid time off.

We also invest in the ongoing development of our employees through our internal training

We provide our employees with competitive salaries and bonuses,

opportunities for equity ownership, and a robust employment package that promotes well-being across all aspects of our employees’

lives, including health care, retirement planning, and paid time off.

We also invest in the ongoing development of our employees through

our internal training programs.

Diversity and Inclusion

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to diversity and inclusion across all levels of our organizational structure.

We encourage a diversity of views and strive to create

an equal opportunity workplace, including working with managers to develop strategies for building diverse teams and promoting the advancement

We encourage a diversity of views and strive to create an

equal opportunity workplace, including working with managers to develop strategies for building diverse teams and promoting the advancement

of employees from diverse backgrounds.

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The following table sets forth the geographical breakdown of our

revenues for each of the years ended December 31, 2021, and 2020 (in thousands):

revenue for each of the years ended December 31, 2022, and 2021 (in thousands):

Year Ended December 31,

Revenues based on customer’s location:

Revenue based on customer’s location:

United States

Latin America

Total revenues

Total revenue

Additional discussion of financial information by reportable segment

and geographic area and sales in excess of 10% of total revenues to certain of our customers is contained in Note 13 to our consolidated

and geographic area and sales in excess of 10% of total revenue to certain of our customers is contained in Note 13 to our consolidated

financial statements set forth in “Part II.

Financial Statements and Supplementary Data” of this annual report.

Recent Developments

Annual revenue of $6.0 million in 2021 represents 36% year over year growth;

Fourth quarter 2021 revenues were $1.2 million, up by 2% compared to previous year quarter;

Strong cash position with $88.3 million as of December 31, 2021;

New DMEPOS rules issued in December 2021 will advance consideration of the ReWalk benefit category and

German court case on ReWalk Personal 6.0 direct compensation decision expected later this year.

Revenue for the fourth quarter of 2022 was $2.2 million, compared to $1.2 million in the fourth quarter of 2021, an increase of 75%;

ReWalk submitted first case for Medicare coverage through the Medicare Administrative Contractors (“MACs”) in Q4’22;

ReWalk advanced its commercial readiness and finalized plans for expanded Medicare patient access following the satisfactory resolution

of the first submitted claim;

Since the initiation of share repurchase program in Q3’22, ReWalk has repurchased $3.3 million of ordinary shares;

The cash position remained strong with $67.9 million as of December 31, 2022, with no debt.

Our business faces significant risks.

carefully consider all of the information set forth in this annual report and in our other filings with the SEC, including the following

risk factors which we face and which are faced by our industry.

Our business, financial condition and results of operations could be materially

and adversely affected by any of these risks.

In that event, the trading price of our ordinary shares would likely decline and you might

lose all or part of your investment.

This report also contains forward-looking statements that involve risks and uncertainties.

could materially differ from those anticipated in these forward-looking statements, as a result of certain factors including the risks

described below and elsewhere in this report and our other SEC filings.

See also “Special Note Regarding Forward-Looking Statements

and Risk Factors Summary” on page (ii).

Risks Related to Our Business and Our Industry

Global, regional, and local economic weakness

and uncertainty could adversely affect our demand for our products and services and our business and financial performance.

Our business and financial performance depends on worldwide economic

conditions and the demand for our products and services in the markets in which we compete.

Ongoing economic weakness, including an economic

slowdown or recession, uncertainty in markets throughout the world and other adverse economic conditions, including inflation, changes

in monetary policy and increased interest rates, have resulted, and may result in the future, in decreased demand for our products and

services and increased expenses and difficulty in managing inventory levels and accurately forecasting revenue, gross margin, cash flows

and expenses.

federal government spending limits may continue to reduce demand for our products and services from organizations

that receive funding from the U.S.

government and could negatively affect macroeconomic conditions in the United States, which could further

reduce demand for our products and services.

Prolonged or more severe economic weakness and uncertainty could

also cause our expenses to vary materially from our expectations.

Any financial turmoil affecting the banking system and financial markets

or any significant financial services institution failures could negatively impact our treasury operations, as the financial condition

of such parties may deteriorate rapidly and without notice.

Poor financial performance of asset markets and the adverse effects of fluctuating

currency exchange rates could lead to higher pension and post-retirement benefit expenses.

Interest and other expenses could vary materially

from expectations depending on changes in interest rates, borrowing costs, currency exchange rates, costs of hedging activities and the

fair value of derivative instruments.

Economic downturns also may lead to future restructuring actions and associated expenses.

pandemic has adversely affected and may continue to materially and adversely impact our business, our operations, and our financial results.

The impact of the COVID-19 pandemic resulted in significant disruptions

to the global economy and the capital markets, as well as our business.

A significant number of our global suppliers, vendors, distributors,

and manufacturing facilities are located in regions that were affected by the pandemic.

Those operations were materially adversely affected

by restrictive government and private enterprise measures implemented in response to the pandemic, which in turn, negatively impacted

our operations.

Shut-downs and other limitations imposed in response to the COVID-19

pandemic adversely affected our ability to identify potential new customers through trade shows and events, engage with our existing customers,

conduct product trials with prospective users, deliver ordered units or repair existing systems and provide training for our products

to new patients, who largely remained at home during local movement restrictions, and to rehabilitation centers, which temporarily shifted

priorities and responses to pandemic-related medical equipment.

In addition, staffing shortages within the healthcare system itself resulted

in a diminished demand for our SCI Products as the attention of healthcare workers and potential patients turned elsewhere.

Some clinics,

such as VA clinics, and many other healthcare facilities, enforced in-clinic restrictions, which affected our ability to demonstrate our

devices to patients or start training for qualified potential customers,

Although these restrictions have now mostly been lifted, allowing

us to restart market development and access programs, we have not seen a full return to pre-pandemic levels, and we believe that our business

will continue to be adversely impacted by the effects of the pandemic-related restrictions and shut-downs.

We may not have sufficient funds to meet certain

future operating needs or capital requirements, which could impair our efforts to develop and commercialize existing and new products,

and as a result, we may in the future consider one or more capital-raising transactions, including future equity or debt financings, strategic

transactions, or borrowings which may also further dilute our shareholders or place us under restrictive covenants limiting our ability

to operate freely.

We intend to finance our business by close management of our operating

expenses until we reach profitable operation using existing cash on hand, issuances of equity and/or debt securities, and other future

public or private issuances of securities, cash exercised of outstanding warrants, or through a combination of the foregoing, though we

may also consider additional capital raising alternatives, such as entering into a credit facility, if the foregoing alternatives are

not available to us or unavailable on reasonable terms.

Although we had a cash and cash equivalent of $67.9 million as of December 31,

2022, which we believe will be sufficient to fund our planned operations through at least the next twelve months from the date of this

report, if we are incorrect in our assumptions, we may need to raise additional capital sooner than expected or on less favorable terms

than what might otherwise be available.

Raising additional capital through one or more of these alternatives may further dilute our shareholders

or place us under restrictive covenants limiting our ability to operate freely.

Raising additional capital in the public markets

could also entail certain downsides.

Although we are currently eligible to use our Form S-3, we are limited to selling no more than

one-third of our unaffiliated market capitalization, or public float, on Form S-3 in a 12-month period unless our public float rises above

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

Item 2, Management’s Discussion and Analysis

of Financial Condition and Results of Operations—Liquidity and Capital Resources—Equity Raises” below.

Additionally,

due to these limitations on our use of Form S-3, we may be required to seek other methods for access to capital, such as a registration

statement on Form S-1.

The preparation of a registration statement on Form S-1 is, and has in the past, been more time-consuming

and costly than using Form S-3.

We may also conduct fundraising transactions in the form of private placements, potentially with registration

rights or priced at a discount to the market value of our ordinary shares, which could require shareholder approval under the rules of

The Nasdaq Stock Market LLC (“Nasdaq”), or other equity raise transactions such as equity lines of credit.

In addition to

entailing increased capital costs, any such transactions have historically resulted in and could result in substantial dilution of our

shareholders’ interests and may also transfer control to a new investor or diminish the value of an investment in our ordinary shares.

We may also need to pursue strategic transactions, such as joint

ventures, in-licensing transactions, or the sale of our business, or all, or substantially all, of our assets if our financial stability

is uncertain, and we are unable to raise additional capital effectively.

These strategic transactions have in the past and could in the

future require significant management attention, disrupt our business, adversely affect our financial results, be unsuccessful or fail

to achieve the desired results.

Overall, if we cannot raise the required funds, or cannot raise

them on terms acceptable to us or investors, we may be forced to curtail substantially our current operations or cease operations altogether.

We do not satisfy all listing requirements

for the Nasdaq Capital Market.

We can provide no assurance that we will be able to comply with the continued listing requirements over

time and that our common stock will continue to be listed on the Nasdaq Capital Market.

As previously disclosed, on October 10, 2022, we received a notification

letter (the “Bid Price Letter”) from Nasdaq indicating that we did not satisfy the requirement for continued listing on The

Nasdaq Capital Market under Nasdaq Listing Rule 5550(a) (“Rule 5550(a)”) to maintain a minimum bid price of $1.00 per share.

We became deficient with Rule 5550(a) as of October 10, 2022 as our closing bid price was less than $1.00 per share for 30 consecutive

business days.

As in the past, the Bid Price Letter is a notice of deficiency, not delisting, and does not currently affect the listing

or trading of ReWalk ordinary shares on The Nasdaq Capital Market.

We have 180 calendar days, or until April 10, 2023, to regain compliance

with Rule 5550(a).

If at any time before April 10, 2023, the bid price of our ordinary shares closes at $1.00 per share or more for a

minimum of 10 consecutive business days, Nasdaq will provide written confirmation that we have regained compliance.

Additionally, we may

be eligible for a second 180-day period to satisfy the minimum bid price requirement of Rule 5550(a), if, as of April 10, 2023, we continue

to have a market value of publicly held shares of at least $1 million, meet all other initial listing standards of the Nasdaq Capital

Market (with the exception of the bid price requirement) and provide written notice of our intention to cure the deficiency during such

second compliance period.

We intend to monitor closely the closing bid price of our ordinary shares and to consider plans for regaining

compliance with Rule 5550(a).

While we plan to review all available options, there can be no assurance that we will be able to regain

compliance with the applicable rules during the 180-day compliance period, any subsequent extension period, or at all.

If we do not regain compliance with Rule 5550(a) during the applicable

cure period, Nasdaq will notify us that our ordinary shares are subject to delisting.

We would then be permitted to appeal any delisting

determination to a Nasdaq Hearings Panel, and our ordinary shares would remain listed on the Nasdaq Capital Market pending the panel's

decision after the hearing.

If we do not appeal the delisting determination or do not succeed in such an appeal, our ordinary shares would

be removed from trading on the Nasdaq Capital Market.

Any delisting determination could seriously decrease or eliminate the value of an

investment in our ordinary shares and other securities linked to our ordinary shares.

While an alternative listing on an over-the-counter

exchange could maintain some degree of a market in our ordinary shares, we could face substantial material adverse consequences, including,

but not limited to, the following:

limited availability for market quotations for our ordinary shares;

reduced liquidity with respect

to our ordinary shares;

a determination that our ordinary shares are “penny stock” under SEC rules, subjecting brokers trading

our ordinary shares to more stringent rules on disclosure and the class of investors to which the broker may sell the ordinary shares;

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

decreased ability to issue additional securities

or obtain additional financing in the future;

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

large shareholders, strategic investors and banks.

The perception among investors that we are at heightened risk of delisting could also

negatively affect the market price of our securities and trading volume of our ordinary shares.

In the event of a delisting, we can provide

no assurance that any action taken by us to restore compliance with listing requirements would allow our common stock to become listed

again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the Nasdaq

minimum bid price requirement, or prevent future non-compliance with Nasdaq’s listing requirements.

Our future growth and operating results will

depend on our ability to develop, receive regulatory clearance for and commercialize new products and penetrate new product and geographic

We are currently engaged in research and development

efforts to address the needs of patients with mobility impairments besides paraplegia, such as stroke, and, in the future, we may engage

in efforts to address these needs in patients with other conditions such as multiple sclerosis, cerebral palsy, Parkinson’s disease

and elderly assistance.

In 2019, we commercialized our first product for stroke patients, the ReStore Exo-Suit.

For more information,

see “Part, Item 1.

Business—ReStore Products” above.

While our Collaboration Agreement with Harvard for the design,

research and develop lightweight exoskeleton system technologies for lower limb disabilities intended to treat stroke, multiple sclerosis,

mobility limitations for the elderly and other medical applications successfully concluded on March 31, 2022, Harvard has licensed to

us certain of its intellectual property relating to lightweight exoskeleton system technologies for lower limb disabilities.

We are obligated

to use commercially reasonable efforts to develop products under the license in accordance with an agreed-upon development plan and to

introduce and market such products commercially.

We expect that a portion of our revenue will be

derived, in the next few years, from the ReStore soft exo-suit product and, in later years, if we choose to advance the current designs,

from other potential new products, such as ReBoot, a home use device for stroke patients, or new products aimed at addressing other medical

indications which affect the ability to walk, including multiple sclerosis, cerebral palsy, Parkinson’s disease and elderly assistance.

As such, our future results will depend on our ability to successfully develop and commercialize such new products and to penetrate our

targeted markets with our existing ReStore product in larger scale than we have done to date.

We cannot ensure that we will be able to

introduce new products, products currently under development or products contemplated for future development for additional indications

in a timely manner, or at all, as it depends on our available resources to fund such projects, as well as our ability to conduct clinical

trials and testing.

While we received governmental clearance to market our ReStore product on the anticipated timetable in 2019, obtaining

clearance for any other products we may develop could be an extensive, costly, and time-consuming process, which could delay any planned

commercialization timelines.

For more information on the clearance processes for our products, see “Part I, Item 1.

Business—Government

Regulation” above.

Harvard may terminate its License Agreement with us if we fail

to maintain the requisite insurance or become insolvent.

Any such termination of this aspect of the collaboration with Harvard could impair

our research and development efforts into lightweight soft suit exoskeleton system technologies for lower limb disabilities such as the

ReBoot device which is intended to be used at home by people who suffered a stroke.

In addition, we may not be able to clinically demonstrate

the medical benefits of our products for new indications.

We have limited clinical data demonstrating the benefits of our products and

we might not be able to support the economic benefits our products have for our potential customers.

We may also be unable to gain necessary

regulatory clearances or approvals to enable us to market new products for additional indications or the regulatory process may be more

costly and time-consuming than expected, which could adversely impact us given our cash position and ongoing capital requirements.

Even if we are successful in the design and development of new

products, our growth and results of operations will depend on our ability to penetrate new markets and gain acceptance and reimbursement

coverage in non-SCI markets such as the stroke rehabilitation market, and, in the longer term, the home use device market for stroke-caused

lower limb disability, multiple sclerosis, elderly assistance and cerebral palsy patients.

We may not be able to gain such market acceptance

and coverage for these indications in a timely manner, or at all.

While our new products currently under development will share some

aspects of the core technology platform of our current products, their design features and components may differ from our current products.

Accordingly, these products will also be subject to the risks described under the Risk Factor titled “We rely on sales of our ReWalk

and ReStore systems and related service contracts and extended warranties for our revenue.

We may not be able to achieve or maintain market

acceptance of our ReWalk or ReStore systems, or to generate sufficient revenue from these current and future products to sustain our operations.”

To the extent we are unable to successfully develop and commercialize products to address indications other than paraplegia, we will not

meet our projected results of operations and future growth.

We rely on sales of our ReWalk and ReStore systems and related service

contracts and extended warranties for our revenue.

We may not be able to achieve or maintain market acceptance of our ReWalk or ReStore

systems, or to generate sufficient revenue from these current and future products to sustain our operations.

We currently rely, and expect in the future to rely, on sales of

our ReWalk Personal, ReWalk Rehabilitation and ReStore systems and related service contracts and extended warranties for our revenue.

We began marketing the ReStore lightweight soft exo-suit in 2019 in the United States and the EU (following the receipt of FDA and CE

mark clearance) to support mobility for individuals suffering from other lower limb disabilities.

Several factors could negatively affect

our ability to achieve and maintain market acceptance of our ReWalk system or our ReStore system, which could in turn materially impair

our business, financial condition, and operating results.

We have sold a limited number of ReWalk systems, and market acceptance and adoption

depend on educating people with limited upright mobility and health care providers as to the distinct features, ease-of-use, positive

lifestyle impact, and other benefits of ReWalk compared to alternative technologies and treatments.

ReWalk may not be perceived to have

sufficient potential benefits compared with these alternatives.

Users may also choose other therapies due to disadvantages of ReWalk,

including the time it takes for a user to put on the device, the slower pace of ReWalk compared to a wheelchair, the weight of ReWalk

when carried, which makes it more burdensome for a companion to transport than a wheelchair, the required training, and the requirement

that users be accompanied by a trained companion.

Also, we believe that healthcare providers tend to be slow to change their medical treatment

practices because of perceived liability risks arising from the use of new products and the uncertainty of third-party reimbursement.

Accordingly, healthcare providers may not recommend ReWalk until there is sufficient support for the device to convince them to alter

the treatment methods they typically recommend, such as expanded reimbursement coverage by payors, and/or recommendations by prominent

healthcare providers or other key opinion leaders in the spinal cord injury community that ReWalk is effective in providing identifiable

immediate and long-term health benefits.

In the United States, many private third-party

payors use coverage decisions and payment amounts determined by CMS as guidelines in setting their coverage and reimbursement policies.

We have started the process of obtaining coverage and reimbursement from CMS, and in July 2020, CMS issued a Healthcare Common Procedure

Coding System Level II Code for ReWalk Personal Exoskeleton (effective October 1, 2020).

These codes are used to identify medical products

and supplies and to facilitate insurance claim submissions and processing for these items.

However, while we believe that any potential

positive coverage and reimbursement response by CMS will result in a response of expanded coverage by private insurers, we cannot currently

predict how long it would take for us to receive a coverage decision from CMS for any of our products, or if at all.

Additionally, we

cannot predict other approval terms that will be decided by CMS such as the price per unit or product labeling requirements should we

achieve approval.

Even with a positive coverage and reimbursement response from CMS regarding a product of ours, future action by CMS

or other government agencies may diminish possible payments to physicians, outpatient centers and/or hospitals that purchase our products

for use by their patients and possible payments to individuals who purchase the ReWalk Personal for their own use.

Additionally, a decision

by CMS to provide reimbursement could influence other payors, including private insurers.

If CMS declines to provide for reimbursements

of our products or if its reimbursement price is lower than that of other payors, our products may not be reimbursed at a cost-effective

level or at all.

Those private third-party payors that do not follow the Medicare guidelines may adopt different coverage and reimbursement

policies for purchase of our products or their use in a hospital or rehabilitative setting.

In addition, we expect that the purchase of

ReWalk Rehabilitation systems and the ReStore system, as it is currently being sold for use in rehabilitative settings, will require the

approval of senior management at hospitals or rehabilitation facilities, inclusion in the hospitals’ or rehabilitation facilities’

budget process for capital expenditures, and in the case of ReWalk Personal, fundraising, and financial planning or assistance.

The ReStore system is designed to provide advantages to stroke rehabilitation clinics

and therapists as compared to other traditional therapies and devices by minimizing setup time, improving patients’ clinical results

during therapy, supplying real-time analytics to optimize session productivity, and generating ongoing data reports to assist with tracking

patient progress Since the ReStore device is currently only indicated for use in the rehabilitative clinical setting, its market reception

will depend heavily on our ability to demonstrate to clinics and therapists the systemic and economic benefits of using the ReStore device,

its clinical advantage when compared to other devices or manual therapy, the functionality of the device for a significant portion of

the patients that they treat and the overall advantages that the device provides to their patients compared to other technologies.

the ReStore system is only indicated for use in a clinical setting and we received FDA approval and CE clearance in 2019, close in time

to the start of the COVID-19 pandemic, the overall sales of the system have been lower than originally anticipated, as many healthcare

providers and rehabilitation centers have shifted focus from the clinical setting to at-home therapies and are generally less open for

introduction of new technologies such as the ReStore.

As a general matter, achieving and maintaining market acceptance

of our current or future products could be negatively impacted by many other factors, including, but not limited to the following:

to death or serious injury or malfunction, results of clinical studies relating to our or similar products;

claims that our products,

or any of their components, infringe on patent or other intellectual property rights of third parties;

our ability to support financially

and leverage our sales, marketing and training infrastructure, as well as our level of research and development efforts;

our ability to

enhance and broaden our research and development efforts and product offerings in response to the evolving demands of people with paraplegia

and lower limb disability and healthcare providers;

our estimates regarding our current or future addressable market;

perceived risks

associated with the use of our products or similar products or technologies;

the introduction of new competitive products or greater acceptance

of competitive products;

adverse regulatory or legal actions relating to our products or similar products or technologies;

arising from the outsourcing of our manufacturing capabilities, or our existing manufacturing and supply relationships.

Any or all of

these factors could materially and negatively impact our business, financial condition and operating results.

The market for medical exoskeletons, including

soft suit devices, remains relatively new and unproven, and important assumptions about the potential market for our current and future

products may be inaccurate.

The market for medical exoskeletons, including lightweight exo-suit

devices, remains relatively new and unproven.

Accordingly, it is difficult to predict the future size and rate of growth of the market.

We cannot be certain whether the market will continue to develop or if medical exoskeletons will achieve and sustain a level of market

acceptance and demand sufficient for us to continue to generate revenue and achieve profitability.

We obtained FDA clearance for our ReWalk Personal device in June

This clearance permits us to market the device for use by individuals with spinal cord injury at levels T7 to L5 and for use by

individuals in rehabilitation institutions with spinal cord injury at levels T4 to L5.

The FDA’s instructions for use requires users

of the device to meet the following criteria:

healthy hands and shoulders that can support crutches, healthy bone density, no skeletal

fractures, in good general health, ability to stand with a stander device, weight of less than 220 pounds/100 kilograms and height between

5 feet 3 inches and 6 feet 2 inches/1.60 meters and 1.88 meters.

Additionally, the FDA clearance contraindicates psychiatric or cognitive

conditions that could interfere with a user’s proper operation of the device and various other clinical conditions, including pregnancy,

severe concurrent medical diseases, a history of severe neurological injuries other than spinal cord injury, impaired joint mobility,

unhealed limbs or pelvic fractures or unstable spine, severe spasticity and significant and chronic loss of joint mobility due to structural

changes in non-bony tissue.

We obtained FDA clearance for our ReStore system in June 2019.

This instructions for use permit us to market the device to be used to assist ambulatory functions in rehabilitation institutions for

people with hemiplegia or hemiparesis due to stroke who can ambulate at least 1.5m (5ft) with no more than minimal to moderate levels

of assistance.

The FDA’s clearance requires users of the device to meet the following criteria:

height between 4 feet 8 inches and

6 feet 3 inches/1.42 meters and 1.92 meters and weight of less than 264 pounds/120 kilograms.

Additionally, the FDA clearance mandates

that persons with the following conditions should not use the Restore:

serious co-morbidities that may interfere with ability to safely

use ReStore, severe peripheral artery disease (“PAD”), unresolved deep vein thrombosis (“DVT”), range of motion

(“ROM”) restrictions at the ankle that preclude safe walking, cognitive impairments that may interfere with safe operation

of the device, presence of open wounds or broken skin at device locations, urethane allergy or current pregnancy.

Future products for those with paraplegia or other mobility impairments

or spinal cord injuries, may have the same or other restrictions.

Our business strategy is based, in part, on our estimates of the

number of mobility-impaired individuals and the incurrence of spinal cord injuries and strokes in our target markets, and the percentage

of those groups that would be able to use our current and future products.

Limited sources exist to obtain reliable market data with respect

to the number of mobility-impaired individuals and the incurrence of spinal cord injuries and strokes in our target markets.

there are no third-party reports or studies regarding what percentage of those with limited mobility and/or spinal cord injuries would

be able to use exoskeletons, in general, or our current or planned future products, in particular.

Our assumptions may be inaccurate and

The National Spinal Cord Injury Statistical Center (“NSCISC”)

estimates that as of 2021 there were 296,000 people in the United States living with SCI, and that the annual incidence of SCI cases is

approximately 17,900 new cases per year.

Based on information from a 2021 report by the NSCISC, 40% of the total U.S.

population of SCI

patients suffered injuries between levels T4 and L5.

Four published ReWalk trials with respect to such eligible SCI patients had

an aggregate screening acceptance rate of 50% considering all current FDA limitations, resulting in an estimated 20% of the total population

of SCI patients being qualified candidates for current ReWalk products under its medical labeling criteria.

There may be other permanent

or short-term factors that affect the market size such as the ability to participate in the training program, the ability to use the device

in the user’s current home environment as well as available companion support.

With regards to our ReStore product for stroke rehabilitation,

as the indication of use is currently in rehabilitation clinics our target market is based on the number of current and future clinics

who treat stroke patients.

Although there are thousands of inpatient, outpatient and rehabilitation clinics providing therapy in the U.S.

for example, we currently see that only a limited portion of the clinics have decided to include ReStore in their stroke rehab program.

For more information on our expectations regarding these plans, see “—Our future growth and operating results will depend

on our ability to develop and commercialize new products and penetrate new markets” below.

For more information regarding the potential

market for future products, including our lightweight soft suit exoskeleton, see “Part I, Item 1.

Business—ReWalk Personal

and ReWalk Rehabilitation Products—Market Opportunity” above.

We cannot assure you that our estimate regarding our current products

is accurate or that our estimate regarding future products will remain the same.

FDA or CE mark clearance for such products, if received

at all, may contain different limitations from the ones the FDA or EU has placed on the devices we currently market for paraplegia.

our estimates of our current or future addressable market are incorrect, our business may not develop as we expect, and the price of our

securities may suffer.

We may fail to secure or maintain adequate

insurance coverage or reimbursement for our products by third-party payors, which risk may be heightened if insurers find the products

to be investigational or experimental or if new government regulations change existing reimbursement policies.

Additionally, such coverage

or reimbursement, even if maintained, may not produce revenue that are high enough to allow us to sell our products profitably.

We expect that in the future a significant source of payment for

ReWalk systems will be private insurance plans and managed care programs, government programs such as the VA, CMS, workers’ compensation

plans, and other third-party payors.

In December 2015, the VA issued a national reimbursement

policy for the ReWalk system, which entails the evaluation, training and procurement of ReWalk Personal exoskeleton systems for all qualifying

veterans across the United States.

Additionally, in September 2017, German insurer Barmer signed a confirmation and letter of agreement

regarding the provision of ReWalk systems for all qualifying beneficiaries and the German national social accident insurance provider

DGUV indicated that its member payors will approve the supply of exoskeleton systems for qualifying beneficiaries on a case-by-case basis.

However, no broad uniform policy of coverage and reimbursement for electronic exoskeleton medical technology exists among third-party

payors in the United States, although reimbursement may be achieved on a case-by-case basis.

To date, payments for our products, which

are largely for our ReWalk systems, have been made primarily through case-by-case determinations by third-party payors (including several

private insurers in the United States), by self-payors and, to a lesser extent, through the use of funds from insurance and/or accident

Generally, private insurance companies in the United States do

not cover or provide reimbursement for any medical exoskeleton products for personal use, including ReWalk Personal, and may ultimately

provide no coverage at all.

Additionally, there is limited clinical data related to the ReWalk and ReStore systems, and third-party payors

may consider use of them to be experimental and therefore refuse to cover any or all of them.

Additionally, the majority of independent

medical review decisions to date made following the denial of ReWalk coverage have determined that ReWalk is experimental and/or investigational,

citing a lack of clinical data.

In the United States, many private third-party

payors use coverage decisions and payment amounts determined by CMS as guidelines in setting their coverage and reimbursement policies.

We have started the process of obtaining coverage and reimbursement from CMS, and in July 2020, CMS issued a Healthcare Common Procedure

Coding System Level II Code for ReWalk Personal Exoskeleton (effective October 1, 2020).

These codes are used to identify medical products

and supplies and to facilitate insurance claim submissions and processing for these items.

However, while we believe that any potential

positive coverage and reimbursement response by CMS will result in a response of expanded coverage by private insurers, we cannot currently

predict how long it would take for us to receive a coverage decision from CMS for any of our products, or if at all.

Additionally, we

cannot predict other approval terms that will be decided by CMS such as the price per unit or product labeling requirements should we

achieve approval.

Even with a positive coverage and reimbursement response from CMS regarding a product of ours, future action by CMS

or other government agencies may diminish possible payments to physicians, outpatient centers and/or hospitals that purchase our products

for use by their patients and possible payments to individuals who purchase the ReWalk Personal for their own use.

Additionally, a decision

by CMS to provide reimbursement could influence other payors, including private insurers.

If CMS declines to provide for reimbursements

of our products or if its reimbursement price is lower than that of other payors, our products may not be reimbursed at a cost-effective

level or at all.

Those private third-party payors that do not follow the Medicare guidelines may adopt different coverage and reimbursement

policies for purchase of our products or their use in a hospital or rehabilitative setting.

In addition, we expect that the purchase of

ReWalk Rehabilitation systems and the ReStore system, as it is currently being sold for use in rehabilitative settings, will require the

approval of senior management at hospitals or rehabilitation facilities, inclusion in the hospitals’ or rehabilitation facilities’

budget process for capital expenditures, and in the case of ReWalk Personal, fundraising, and financial planning or assistance.

Third-party payors are developing increasingly sophisticated methods

of controlling healthcare costs.

These cost control methods include prospective payment systems, capitated rates, benefit redesigns and

an exploration of other cost-effective methods of delivering healthcare.

These cost control methods potentially limit the amount that

healthcare providers may be willing to pay for electronic exoskeleton medical technology if they provide coverage at all.

We may be unable

to sell our products on a profitable basis if third-party payors deny coverage or provide insufficient levels of reimbursement.

Future legislation could result in modifications to the existing

public and private health care insurance systems that would have a material adverse effect on the reimbursement policies discussed above.

If enacted and implemented, any measures to restrict health care spending could result in decreased revenue from our products and decrease

potential returns from our research and development initiatives.

Defects in our products or the software that

drives them could adversely affect the results of our operations.

The design, manufacture and marketing of our products involve certain

inherent risks.

Manufacturing or design defects, unanticipated use of ReWalk or ReStore, or inadequate disclosure of risks relating to

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

In addition, because the manufacturing of our products is outsourced

to Sanmina, our original equipment manufacturer, we may not be aware of manufacturing defects that could occur.

Such adverse events could

lead to recalls or safety alerts relating to our products (either voluntary or required by the FDA or similar governmental authorities

in other countries), and could result, in certain cases, in the removal of our products from the market.

A recall could result in significant

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

therefore we could be required to incur the majority of related costs.

Product defects or recalls could also result in negative publicity,

damage to our reputation or, in some circumstances, delays in new product clearances or approvals.

When an exoskeleton is used by a paralyzed individual to walk,

the individual relies completely on the exoskeleton to hold him or her upright.

Between 2013 and 2021, we submitted medical device reports,

or MDRs, to the FDA (and equivalent authorities outside of the United States) relating to reports of falls and fractures of individuals

using the ReWalk Personal system.

We conducted a voluntary correction related to certain use instructions in the device’s

labeling, which the FDA classified as a Class II recall.

The recall was closed in November 2019, and the FDA cleared our 510(k)

containing revised instructions for use in May 2020.

In addition, our products incorporate sophisticated computer software

and hardware.

Complex software frequently contains errors, especially when first introduced.

Our software may experience errors or performance

problems in the future.

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

For example, in 2021 ReWalk submitted medical device reports to the FDA and medical device vigilance reports to the European regulatory

authorities and initiated a correction in response to two complaints regarding battery thermal runaway events.

The correction that includes

clarification of previous instructions and additional information on battery operation and storage is closed in Europe and in the United

ReWalk has separately initiated a design project to improve power management and battery operation during charge and discharge,

and this project remains in process.

Additionally, users may not use or maintain our products in accordance with safety, storage, and

training protocols, which could enhance the risk of death or injury.

Any such occurrence could cause delay in market acceptance of our

products, damage to our reputation, the need for additional regulatory filings, product recalls, increased service and warranty costs,

product liability claims, and loss of revenue relating to hardware or software defects.

The medical device industry has historically been subject to extensive

litigation over product liability claims.

We have been and anticipate that as part of our ordinary course of business we may be, subject

to product liability claims alleging defects in the design, manufacture, or labeling any of our products which has resulted in an injury

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

high punitive damage payments.

Although we maintain product liability insurance, the coverage is subject to deductibles and limitations,

and may not be adequate to cover future claims.

Additionally, we may be unable to maintain our existing product liability insurance in

the future at satisfactory rates or adequate amounts.

Any alleged defect that has resulted in an adverse event involving our products

could result in future voluntary corrective actions, such as recalls or customer letters, or in an FDA enforcement action, such as a mandatory

recall, notification to healthcare professionals and users, warning letter, seizure, injunction or import alert.

In addition, failure

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

Any action, whether voluntary or involuntary, as well as defending ourselves in a lawsuit, will require financial resources and distract

management, and may harm our reputation and financial results.

We have a limited operating history and sales

experience upon which you can evaluate our business plan and prospects in comparison to larger, more established companies developing

products to treat spinal cord injuries or rehabilitative treatments for lower limb disability due to stroke.

Although we were incorporated in 2001, we did not begin selling

ReWalk Rehabilitation until 2011, and we did not begin selling ReWalk Personal in Europe until 2012.

We began selling ReWalk Personal

in the United States in the third quarter of 2014, after receiving FDA clearance to do so in June 2014.

We began selling our ReStore product

in the United States and Europe in June 2019 following receipt of FDA clearance and CE mark, respectively.

However, due to a shift to

at-home therapies brought on by the ongoing COVID-19 pandemic and the challenges associated with marketing and selling our products during

the pandemic, as described elsewhere in this report, we have had a limited ability to engage with potential SCI Product and ReStore purchasers

over the past three years, which has resulted in lower sales than originally anticipated.

In addition, we are actively working toward,

but have not yet achieved, meaningful coverage and reimbursement for our SCI products from third party payors, which is generally a barrier

to wider market acceptance.

Due to the challenges brought on by the COVID-19 pandemic and those associated with entry into the markets

in which we operate, although we have been a revenue generating company since 2011, we have a limited operating history and sales experience

upon which you can evaluate our business plan and prospects in comparison to other larger or more established companies developing products

to treat spinal cord injuries or rehabilitative treatments for lower limb disability due to stroke.

Our business plan and prospects must

be considered in light of the potential problems, delays, uncertainties and complications encountered in connection with a more newly

established business in comparison to larger or more established companies that operate in our targeted markets.

The risks include, but

are not limited to, that:

a market will not sufficiently develop for our products;

we will not be able to develop scalable products and services, or that, although scalable, our products and services will not be

economical to market nor will we get sufficient reimbursement coverage;

we will not be able to establish brand recognition and competitive advantages for our products;

we will not receive necessary regulatory clearances or approvals for our products;

our competitors market an equivalent or superior product or hold proprietary rights that preclude us from marketing our products.

There are no assurances that we can successfully address these

If we are unsuccessful, our business, financial condition and operating results could be materially and adversely affected.

If we are unable to leverage our sales, marketing,

and training infrastructure we may fail to increase our sales.

A key element of our long-term business strategy is the continued

leveraging of our sales, marketing, training, and reimbursement infrastructure, through the training, retention, and motivation of skilled

sales and marketing representatives and reimbursement personnel with industry experience and knowledge.

Our ability to derive revenue

from sales of our products depends largely on our ability to market the products and obtain reimbursements for them.

In order to continue

growing our business efficiently, we must therefore coordinate the development of our sales, marketing, training and reimbursement infrastructure

with the timing of regulatory approvals, decisions regarding reimbursements, limited resources consideration and other factors in various

Managing and maintaining our sales and marketing infrastructure is expensive and time consuming, and an inability to leverage

such an organization effectively, or in coordination with regulatory or other developments, could inhibit potential sales and the penetration

and adoption of our products into both existing and new markets.

However, certain decisions we make regarding staffing in these areas

in our efforts to maintain an adequate spending level could have unintended negative effects on our revenue, such as by weakening our

sales infrastructure, impairing our reimbursement efforts and/or harming the quality of our customer service.

Additionally, we expect to face significant challenges as we manage

and continue to improve our sales and marketing infrastructure and work to retain the individuals who make up those networks.

sales representatives require training and take time to achieve full productivity.

If we fail to train new hires adequately, or if we

experience high turnover in our sales force in the future, we cannot be certain that new hires will become as productive as may be necessary

to maintain or increase our sales.

In addition, if we are not able to retain existing and recruit new trainers to our clinical staff,

we may not be able to successfully train customers on the use of ReWalk or ReStore, which could inhibit new sales and harm our reputation.

If we are unable to expand our sales, marketing, and training capabilities, we may not be able to effectively commercialize our products,

or enhance the strength of our brand, which could have a material adverse effect on our operating results.

The health benefits of our products have not

been substantiated by long-term clinical data, which could limit sales of such products.

Although published research and users of our ReWalk products have

reported the secondary health benefits of our ReWalk products such as a reduction in pain and spasticity, improved bowel and urinary tract

functions and emotional and psychosocial benefits, among others, currently there is no large scale, randomized clinical trial establishing

the secondary health benefits of ReWalk products due to the relatively small size of the applicable user population.

There is also a lack

of randomized clinical data for such health benefits of the ReStore-specifically its long-term benefits following the usage of the product

within the clinic as the trials conducted to date using this product are limited.

As a result, potential customers and healthcare providers may be

slower to adopt or recommend ReWalk products or ReStore and third-party payors may not be willing to provide coverage or reimbursement

for our products.

In addition, future studies or clinical experience may indicate that treatment with our current or future products is

not superior to treatment with alternative products or therapies.

Such results could slow the adoption of our products and significantly

reduce our sales.

We depend on a single third-party supplier

to manufacture our products, and we rely on a limited number of third-party suppliers for certain components of our products.

We have contracted with Sanmina Corporation (“Sanmina”),

a well-established contract manufacturer with expertise in the medical device industry, for the manufacture of all our products and the

sourcing of all of our components and raw materials.

Pursuant to this contract, Sanmina manufactures ReWalk and ReStore, pursuant to our

specifications, at its facility in Ma’alot, Israel.

We may terminate our relationship with Sanmina at any time upon written notice.

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

our business strategy to be successful, Sanmina must be able to manufacture our products in sufficient quantities, in compliance with

regulatory requirements and quality control standards, in accordance with agreed upon specifications, at acceptable costs and quality

levels, and on a timely basis.

Increases in our product sales, whether forecasted or unanticipated, could strain the ability of Sanmina

to manufacture an increasingly large supply of our current or future products in a manner that meets these various requirements.

although we are not restricted from engaging an alternative manufacturer, and potentially have the capabilities to manufacture our products

in-house, the process of moving our manufacturing activities would be time consuming and costly, and may limit our ability to meet our

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

Moreover, the failure

of Sanmina to comply with applicable regulatory requirements could expose us to regulatory action including warning letters, product recalls,

termination of distribution, product seizures or civil penalties.

We also rely on third-party suppliers, which contract directly

with Sanmina, to supply certain components of our products, and in some cases, we purchase these components ourselves.

Sanmina does not

have long-term supply agreements with most of its suppliers and, in many cases, makes purchases on a purchase order basis.

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

Suppliers may encounter problems that limit their ability to manufacture

components for our products, including financial difficulties or damage to their manufacturing equipment or facilities.

If Sanmina fails

to obtain sufficient quantities of high-quality components to meet demand on a timely basis, we could lose customer orders, our reputation

may be harmed, and our business could suffer.

Our results of operations and liquidity could be adversely impacted

by supply chain disruptions and operational challenges faced by our manufacturer or suppliers.

Sanmina generally uses a small number of

suppliers for ReWalk and ReStore.

Depending on a limited number of suppliers exposes us to risks, including limited control over pricing,

availability, quality, and delivery schedules.

Such risks are heightened in light of the interruptions in supply chains and distribution

networks related to the COVID-19 pandemic.

For example, as a result of the COVID-19 pandemic, we have seen several components, mainly

electronic parts, experience price increases.

If any one or more of our suppliers ceases to provide sufficient quantities of components

in a timely manner or on acceptable terms, Sanmina would have to seek alternative sources of supply or accept price increase as we have

seen during the pandemic.

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

Failure of these suppliers

to deliver products at the level our business requires would limit our ability to meet our sales commitments, which could harm our reputation

and could have a material adverse effect on our business.

Sanmina also may have difficulty obtaining similar components from other acceptable

suppliers, which could require Sanmina to cease using the components, seek alternative components or technologies and we could be forced

to modify our products to incorporate alternative components or technologies, which could result in a requirement to seek additional regulatory

clearances or approvals.

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

our operating results.

All manufacturing and assembly of our products is conducted at

a single facility run by Sanmina in Ma’alot, Israel.

Accordingly, we are highly dependent on the uninterrupted and efficient operation

of this facility.

If operations at this facility were to be disrupted as a result of equipment failures, earthquakes and other natural

disasters, fires, accidents, work stoppages, power outages, acts of war or terrorism or other reasons such as a local shutdown as we have

seen during the pandemic, our business, financial condition and results of operations could be materially adversely affected.

In particular,

this facility is located in the north of Israel within range of rockets that have from time to time been fired into the country during

armed conflicts with Hezbollah and other armed groups in Lebanon, Syria or other countries in the region.

Although our manufacturing and

assembly operations could be transferred elsewhere, either in-house or to an alternative Sanmina facility, the process of relocating these

operations would cause delays in production.

Lost sales or increased costs that we may experience during the disruption, or a forced relocation,

of operations may not be recoverable under our insurance policies, and longer-term business disruptions could result in a loss of customers.

If this were to occur, our business, financial condition and operations could be materially negatively impacted.

Additionally, our reliance

on Sanmina as a contract manufacturer or any other contract manufacturer makes us vulnerable to possible capacity constraints and reduced

control over component availability, delivery schedules, manufacturing yields and costs.

We operate in a competitive industry that is

subject to rapid technological change, and we expect competition to increase.

There are several other companies developing technology and devices

that compete with our products.

Our principal competitors in the medical exoskeleton market consist of Ekso Bionics, Rex Bionics, Cyberdyne,

FREE Bionics, Wandercraft, and others.

These companies have products currently available for institutional use and in some cases personal

We expect some of such products to become available for personal use in the next few years especially as we continue to expand coverage

by different payors and geographies.

In addition, we compete with alternative devices and alternative therapies, including treadmill-based

gait therapies, such as those offered by DIH (formerly known as Hocoma), AlterG, Aretech, Reha Technology, and Bioness, which is a unit

of Bioventus.

Our competitor base may change or expand as we continue to develop and commercialize our soft suit exoskeleton product in

These or other medical device or robotics companies, academic and research institutions, or others, may develop new technologies

or therapies that provide a superior walking and usage experience, are more effective in treating the secondary medical conditions that

we target or are less expensive than ReWalk, ReStore or future products.

Our technologies and products could be rendered obsolete by such

developments.

We may also compete with other treatments and technologies that address the secondary medical conditions that our products

seek to mitigate.

Our competitors may respond more quickly to new or emerging technologies,

undertake more extensive marketing campaigns, have greater financial, marketing, and other resources than we do or may be more successful

in attracting potential customers, employees, and strategic partners.

In addition, potential customers, such as hospitals and rehabilitation

centers, could have long-standing or contractual relationships with competitors or other medical device companies.

Potential customers

may be reluctant to adopt ReWalk or ReStore, particularly if it competes with or has the potential to compete with or diminish the need/utilization

of products or treatments supported through these existing relationships.

If we are not able to compete effectively, our business and

results of operations will be negatively impacted.

In addition, because we operate in a new market, the actions of

our competitors could adversely affect our business.

Adverse events such as product defects or legal claims with respect to competing

or similar products could cause reputational harm to the exoskeleton market on the whole.

Further, adverse regulatory findings or reimbursement-related

decisions with respect to other exoskeleton products could negatively impact the entire market and, accordingly, our business.

We utilize independent distributors who are

free to market other products that compete with ours.

While we expect that the percentage of our sales generated from

independent distributors will decrease over time as we continue to focus our resources on achieving reimbursement within our direct markets

in the United States and Europe, we believe that some percentage of our sales will continue to be generated by independent distributors

in the future.

None of our independent distributors has been required to sell our products exclusively.

Our distributor agreements generally

have one-year initial terms and automatic renewals for an additional year.

If any of our key independent distributors were to cease to

distribute our products, our sales could be adversely affected.

In such a situation, we may need to seek alternative independent distributors

or increase our reliance on our other independent distributors or our direct sales representatives, which may not prevent our sales from

being adversely affected.

Additionally, to the extent that we enter into additional arrangements with independent distributors to perform

sales, marketing, or distribution services, the terms of the arrangements could cause our product margins to be lower than if we directly

marketed and sold our products.

We may receive a significant number of warranty

claims or our ReWalk and ReStore systems may require significant amounts of service after sale.

Sales of ReWalk generally include a five-year warranty for parts

and services, other than for normal wear and tear.

Some of our active devices were delivered prior to 2018 with two years warranty so

we provide these customers with the option to purchase an extended warranty for up to an additional three years.

Our ReStore product

offering includes a two-year warranty for parts and services.

If product returns or warranty claims are significant or exceed our expectations,

we could incur unanticipated expenditures for parts and services, which could have a material adverse effect on our operating results.

We may not be able to enhance our product offerings through our

research and development efforts.

In order to increase our sales and our market share in the exoskeleton

market, we are working to enhance and broaden our research and development efforts and product offerings in response to the evolving demands

of people with paraplegia, paralysis, other medical conditions and healthcare providers, as well as competitive technologies.

currently involved in ongoing research and development efforts directed to the needs of patients with other mobility impairments, such

as stroke, and began commercializing our ReStore product for stroke patients in 2019.

Depending on our future resources and business focus,

we plan to address these needs in patients with other conditions or devices for stroke patients to be used at home, improving our current

products, or developing products to address additional medical conditions such as multiple sclerosis, Parkinson’s disease or cerebral

palsy and support elderly assistance.

We may decide to invest our business development resources in partnerships, licensing agreements,

business acquisition and other ways that will provide us new product offerings without significant research and development activities.

We may not be successful in developing, obtaining regulatory approval for, or marketing our currently proposed products, or our approved

products for additional indications, products proposed to be created in the future or products that will be available for us through business

acquisitions.

In addition, notwithstanding our market research efforts, our future products may not be accepted by consumers, their caregivers,

healthcare providers or third-party payors who reimburse consumers for our products.

The success of any proposed product offerings will

depend on numerous factors, including our ability to:

identify the product features that people with paraplegia or paralysis, their caregivers, and healthcare providers are seeking in

a medical device that restores upright mobility and successfully incorporate those features into our products;

identify the product features that people with stroke, multiple sclerosis or other similar indications require while the products

are used at home as well as what items are valuable to the clinics that provide them rehabilitation;

develop and introduce proposed products in sufficient quantities and in a timely manner;

adequately protect our intellectual property and avoid infringing upon the intellectual property rights of third-parties;

demonstrate the safety, efficacy, and health benefits of proposed products;

obtain the necessary regulatory clearances and approvals for proposed products.

If we fail to generate demand by developing products that incorporate

features desired by consumers, their caregivers or healthcare providers, or if we do not obtain regulatory clearance or approval for proposed

products in time to meet market demand, we may fail to generate sales sufficient to achieve or maintain profitability.

We have in the

past experienced, and we may in the future experience, delays in various phases of product development, including during research and

development, manufacturing, limited release testing, marketing, and customer education efforts.

Such delays could cause customers to delay

or forgo purchases of our products, or to purchase our competitors’ products.

Even if we are able to successfully develop proposed

products when anticipated, these products may not produce sales in excess of the costs of development, and they may be quickly rendered

obsolete by changing consumer preferences or the introduction by our competitors of products embodying new technologies or features.

We may enter into collaborations, in-licensing

arrangements, joint ventures, strategic alliances, business acquisitions or partnerships with third parties that may not result in the

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

In the ordinary course of our business, we may enter into collaborations,

in-licensing arrangements, joint ventures, strategic alliances, business acquisitions, partnerships or other arrangements to develop our

products and to pursue new geographic or product markets.

Proposing, negotiating, and implementing collaborations, in-licensing arrangements,

joint ventures, strategic alliances, or partnerships may be a lengthy and complex process.

Other companies, including those with substantially

greater financial, marketing, sales, technology or other business resources, may compete with us for these opportunities or arrangements.

We may not identify, secure, or complete any such transactions or arrangements in a timely manner, on a cost-effective basis, on acceptable

terms or at all.

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

may also not realize the anticipated benefits of any such transaction or arrangement.

In particular, these collaborations may not result

in the development of products that achieve commercial success or result in significant revenue and could be terminated prior to developing

any products.

For example, we have entered into agreements with MediTouch and MYOLYN for the distribution of their products in the U.S.

After several years of commercial collaboration, we determined that the agreement with MediTouch would not yield commercially acceptable

results for us and we terminated the agreement as of January 31, 2023.

Similarly, the distribution arrangement with MYOLYN or other new

future arrangements may not be as productive or successful as we hope.

On May 16, 2016, we entered into the Collaboration Agreement

and License Agreement with Harvard.

Pursuant to the Collaboration Agreement, we have agreed to collaborate with Harvard for the research,

design, development, and commercialization of lightweight exoskeleton system technologies for lower limb disabilities, aimed to treat

stroke, multiple sclerosis, mobility limitations for the elderly and other medical applications.

The Collaboration Agreement concluded

on March 31, 2022.

The License Agreement will continue in full force and effect until the expiration of the last-to-expire valid

claim of the licensed patents.

For more information on the collaboration with Harvard, see “Research and Development-Research and

Development Collaborations”.

Additionally, as we pursue these arrangements and choose to pursue

other collaborations, in-licensing arrangements, joint ventures, strategic alliances, or partnerships in the future, we may not be in

a position to exercise sole decision-making authority regarding the transaction or arrangement.

This could create the potential risk of

creating impasses on decisions, and our collaborators may have economic or business interests or goals that are, or that may become, inconsistent

with our business interests or goals.

It is possible that conflicts may arise with our collaborators.

Our collaborators or any future

collaborators may act in their self-interest, which may be adverse to our best interest, and they may breach their obligations to us.

Disputes between us and our collaborators or any future collaborators may result in litigation or arbitration which would increase our

expenses and divert the attention of our management.

Further, these transactions and arrangements are contractual in nature and may be

terminated or dissolved under the terms of the applicable agreements.

Our collaborators or any future collaborators may allege that we

have breached our agreement with them, and accordingly seek to terminate such agreement, which could adversely affect our competitive

business position and harm our business prospects.

We may seek to grow our business through acquisitions

of businesses, products or technologies, and the failure to manage acquisitions, or the failure to integrate them with our existing business,

could have a material adverse effect on our business, financial condition, and operating results.

From time to time, we may consider opportunities to acquire or

license other products or technologies that may enhance our product platform or technology, expand the breadth of our markets or customer

base, or advance our business strategies.

Potential acquisitions involve numerous risks, including:

problems assimilating the acquired products or technologies;

issues maintaining uniform standards, procedures, controls and policies;

problems integrating employees from an acquired organization into our company and integrating each company’s accounting, management

information, human resources and other administrative systems;

unanticipated costs associated with acquisitions;

diversion of management’s attention from our existing business operations;

potential incurrence of debt, contingent liabilities or amortization expenses, or write-offs of goodwill;

risks associated with entering new markets in which we have limited or no experience;

increased legal and accounting costs relating to the acquisitions or compliance with regulatory matters.

We have no current commitments with respect to any acquisition

or licensing.

We do not know if we will be able to identify such acquisitions or licensing we deem suitable, whether we will be able to

successfully complete any such transactions on favorable terms, or at all, or whether we will be able to successfully integrate any acquired

products or technologies.

Our potential inability to integrate any acquired products or technologies effectively may adversely affect

our business, operating results, and financial condition.

Risks Related to Government Regulation

Although the FDA granted Breakthrough Device

Designation status to both our new ReBoot device and the ReWalk with stair functionality, this designation does not guarantee regulatory

clearance, or a speedier clearance timeline.

In November 2021, the FDA granted Breakthrough Device Designation

status to ReBoot, a personal soft exo-suit for home and community use by individuals post-stroke.

In May 2021, the FDA granted Breakthrough

Device Designation status to the ReWalk with stair functionality.

The Breakthrough Devices Program is a voluntary program for certain

medical devices and device-led combination products that provide for more effective treatment or diagnosis of life-threatening or irreversibly

debilitating diseases or conditions.

It is available for devices and device-led combination products which are subject to review under

a PMA, 510(k), or de novo classification request.

The Breakthrough Devices Program offers manufacturers an opportunity to interact

with the FDA's experts through several different program options to efficiently address topics as they arise during the premarket review

phase, which can help them receive feedback from the FDA and identify areas of agreement in a timely way.

The program also provides manufactures

prioritized review of their premarket submission.

However, achieving Breakthrough Device Designation status does

not guarantee regulatory clearance or approval or a speedier clearance or approval timeline.

We have not yet submitted a premarket

submission to the FDA or any foreign regulatory agency for clearance or other marketing authorization of ReBoot.

healthcare reform measures and other potential

legislative initiatives could adversely affect our business.

Recent political changes in the United States could

result in significant changes in, and uncertainty with respect to, legislation, regulation, global trade, and government policy that could

substantially impact our business and the medical device industry generally.

Certain proposals, if enacted into law, could impose limitations

on the prices we will be able to charge for our ReWalk system or any products we may develop and offer in the future, or the amounts of

reimbursement available for such products from governmental agencies or third-party payors.

Additionally, any reduction in reimbursement

from Medicare or other government-funded federal programs, including the VA, or state healthcare programs could lead to a similar reduction

in payments from private commercial payors.

The FDA’s policies may also change, and additional government regulations may be issued

that could prevent, limit, or delay regulatory approval of our future products, or impose more stringent product labeling and post-marketing

testing and other requirements.

Further legislative and regulatory changes under the ACA remain

possible, although President Biden indicated that he intends to use executive orders to undo changes to the ACA made by the Trump administration

and would advocate for legislation to build on the ACA.

It is unknown what form any such changes or any law would take, and how

or whether it may affect our business in the future.

We expect that changes or additions to the ACA or the Medicare and Medicaid programs,

changes allowing the federal government to directly negotiate drug prices and changes stemming from other healthcare reform measures,

especially with regard to healthcare access, financing or other legislation in individual states, could have a material adverse effect

on the healthcare industry.

In January 2021, CMS issued a rule creating a new pathway for Medicare

coverage of medical devices designed by FDA as breakthrough.

This pathway, the “Medicare Coverage of Innovative Technology

(MCIT),” provided for national coverage for on-label uses of such devices for four years.

However, in November 2021, CMS reversed

course, and rescinded the rule due primarily to clinical evidence concerns.

Other legislative changes have been proposed and adopted since

passage of the ACA.

The Budget Control Act of 2011, among other things, created the Joint Select Committee on Deficit Reduction to recommend

proposals in spending reductions to Congress.

The Joint Select Committee did not achieve its targeted deficit reduction of an amount greater

than $1.2 trillion for the fiscal years 2012 through 2021, triggering the legislation’s automatic reductions to several government

These reductions included aggregate reductions to Medicare payments to healthcare providers of up to 2% per fiscal year.

2% reduction was temporarily suspended during the pandemic, but has since been reinstated and, unless Congress and/or the Administration

take additional action, will begin to increase gradually starting in April 2030, reaching 4% in April 2031, until sequestration ends in

October 2031.

The Bipartisan Budget Act of 2018 increased labeler responsibility for prescription costs in the Medicare Part D coverage

On January 2, 2013, the American Taxpayer Relief Act was signed into law, which, among other things, reduced Medicare payments

to several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations

period for the government to recover overpayments to providers from three to five years.

The implementation of cost containment measures or other healthcare

reforms may thus prevent us from being able to generate revenue, attain profitability or further commercialize our existing ReWalk systems

or future ReWalk products.

We are currently unable to predict what additional legislation or regulation, if any, relating to the health

care industry may be enacted in the future or what effect recently enacted federal legislation or any such additional legislation or regulation

would have on our business.

The pendency or approval of such proposals or reforms could result in a decrease in our stock price or limit

our ability to raise capital or to enter into collaboration agreements for the further development and commercialization of our programs

and products.

Our devices are subject to the FDA’s

regulations pertaining to marketing and promotional communications, among others.

Failure to comply with such regulations may give rise

to a number of potential FDA enforcement actions, any of which could have a material adverse effect on our business.

Our sales and marketing efforts, as well as promotions, are subject

to various laws and regulations.

Medical device promotions must be consistent with and not contrary to labeling and the indication for

use, be truthful and not false or misleading, and be adequately substantiated.

In addition to the requirements applicable to 510(k)-cleared

products, we may also be subject to enforcement action in connection with any promotion of an investigational new device.

investigator, or any person acting on behalf of a sponsor or investigator, may not represent in a promotional context that an investigational

new device is safe or effective for the purposes for which it is under investigation or otherwise promote the device.

Our marketing and promotional materials are subject to FDA scrutiny

to ensure that the device is being marketed in compliance with these requirements.

If the FDA investigates our marketing and promotional

materials and finds that any of our current or future commercial products were being marketed for unapproved or uncleared uses or in a

false or misleading manner, we could be subject to FDA enforcement and/or false advertising consumer lawsuits, each of which could have

a material adverse effect on our business.

We are subject to extensive governmental regulations

relating to the manufacturing, labeling, and marketing of our products, and a failure to comply with such regulations could lead to withdrawal

or recall of our products from the market.

Our medical products and manufacturing operations are subject to

regulation by the FDA, the European Union, and other governmental authorities both inside and outside of the United States.

These agencies

enforce laws and regulations that govern the development, testing, manufacturing, labeling, storage, installation, servicing, advertising,

promoting, marketing, distribution, import, export and market surveillance of our products.

Our products are regulated as medical devices in the United States

under the FFDCA as implemented and enforced by the FDA.

Under the FFDCA, medical devices are classified into one of three classes (Class

I, Class II or Class III) depending on the degree of risk associated with the medical device, what is known about the type of device,

and the extent of control needed to provide reasonable assurance of safety and effectiveness.

Classification of a device is important

because the class to which a device is assigned determines, among other things, the necessity and type of FDA review required prior to

marketing the device.

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

Business-Government Regulation” above.

In June 2014, the FDA granted our petition for “de novo”

classification, which provides a route to market for medical devices that are low to moderate risk, but are not substantially equivalent

to a predicate device, and classified ReWalk as Class II powered exoskeleton device subject to certain special controls.

The ReWalk is

intended to enable individuals with spinal cord injuries to perform ambulatory functions under supervision of a specially trained companion,

and inside rehabilitation institutions.

The special controls established in the de novo order for all powered exoskeletons include the

clinical testing to demonstrate safe and effective use considering the level of supervision necessary and the use environment;

non-clinical safety and performance testing, including durability testing to demonstrate that the device performs as intended under anticipated

conditions of use;

a training program;

and labeling related to device use and user training.

In order for us to market ReWalk, we must

comply with both general controls, including controls related to quality, facility registration, reporting of adverse events and labeling,

and the special controls established for the device.

Failure to comply with these requirements could lead to an FDA enforcement action,

which would have a material adverse effect on our business.

In June 2019, the FDA issued a 510(k) clearance for our ReStore

ReStore is intended to be used to assist ambulatory functions in rehabilitation institutions under the supervision of a trained

therapist for people with hemiplegia or hemiparesis due to stroke who have a specified amount of ambulatory function.

In order for us

to market ReStore and ReWalk, we must comply with both general controls, including controls related to quality, facility registration,

reporting of adverse events and labeling, and the special controls established for powered exoskeleton devices as described above.

to comply with these requirements could lead to an FDA enforcement action, which would have a material adverse effect on our business.

we are subject to regulations and standards regulating

the design, manufacture, clinical trials, labeling and adverse event (i.e., vigilance) reporting for medical devices.

The Medical Devices

Regulation (EU) 2017/745 (MDR) became fully applicable on May 26, 2021, repealing and replacing the pre-existing E.U.

Medical Devices

Directive 93/42/EEC.

Devices that comply with the requirements of the MDR, subject to certain transitional provisions that allow continued

compliance of certain products to the Directive until May 2024 at the latest, are entitled to bear the CE mark, indicating that the device

conforms to the essential requirements of the MDR and, accordingly, can be commercially distributed throughout the European Economic Area

(i.e., the E.U.

Member States plus Norway, Iceland, and Lichtenstein).

We comply with the E.U.

requirements and have received the CE mark

for all of our ReWalk systems including the ReStore device which are distributed in the E.U.

As compared with the Directive, the MDR includes

additional premarket and post-market requirements, as well as potential product reclassifications and more stringent commercialization

requirements that could adversely affect our CE mark.

Failure to comply with these new requirements could lead to substantial penalties,

including fines, revocation or suspension of CE mark and criminal sanctions.

Following the introduction of a product, the governmental agencies

will periodically inspect our manufacturing processes and quality controls, and we are under a continuing obligation to ensure that all

applicable regulatory requirements continue to be met.

The process of complying with the applicable good manufacturing practices, adverse

event reporting and other requirements can be costly and time consuming, and could delay or prevent the production, manufacturing, or

sale of our devices.

In addition, if we fail to comply with applicable regulatory requirements, it could result in fines, closure of manufacturing

sites, seizures or recalls of products and damage to our reputation, as well as enforcement actions against us.

For example, the FDA could

request that we recall our ReWalk Personal 6.0 or ReStore device in case of product defects or require us to conduct post-market surveillance

If we fail to recall the device and/or conduct requested postmarket surveillance studies to FDA’s satisfaction, we could

be subject to FDA enforcement action.

In addition, governmental agencies may impose new requirements

regarding registration or labeling that may require us to modify or re-register our products or otherwise impact our ability to market

our products in those countries, such as the May 2021 Medical Device Regulation changes in the European Union.

The process of complying

with these governmental regulations can be costly and time consuming, and could delay or prevent the production, manufacturing, or sale

of our products.

If we or our third-party manufacturers fail

to comply with the FDA’s Quality System Regulation, or QSR, our manufacturing operations could be interrupted.

We and our manufacturer Sanmina are required to comply with the

FDA’s QSR which covers the methods and documentation of the design, testing, production, control, quality assurance, labeling, packaging,

sterilization, storage, and shipping of our products.

We, Sanmina, and our suppliers are also subject to the regulations of foreign jurisdictions

regarding the manufacturing process if we or our distributors market our products abroad.

We continue to monitor our quality management

to improve our overall level of compliance.

Our facilities are subject to periodic and unannounced inspection by U.S.

and foreign regulatory

agencies to audit compliance with the QSR and comparable foreign regulations.

If our facilities or those of Sanmina or our suppliers are

found to be in violation of applicable laws and regulations, or if we, Sanmina, or our suppliers fail to take satisfactory corrective

action in response to an adverse inspection, the regulatory authority could take enforcement action, including any of the following sanctions:

untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties;

customer notifications or repair, replacement, or refunds;

operating restrictions or partial suspension or total shutdown of production;

recalls, withdrawals, or administrative detention or seizure of our products;

denials or delays of approvals for pre-market approval applications relating to new products or modified products;

withdrawals of a PMA approvals;

refusal to provide Certificates for Foreign Government;

refusal to grant export approval for our products;

pursuit of criminal prosecution.

Any of these sanctions could impair our ability to produce our

products in a cost-effective and timely manner in order to meet our customers’ demands and could have a material adverse effect

on our reputation, business, results of operations, and financial condition.

We may also be required to bear other costs or take other

actions that may have a negative impact on our future sales and our ability to generate profits.

We are subject to various laws and regulations,

including “fraud and abuse” laws and anti-bribery laws, which, if violated, could subject us to substantial penalties.

Medical device companies such as ours have faced lawsuits and investigations

pertaining to alleged violations of numerous statutes and regulations, including anti-corruption laws and health care “fraud and

abuse” laws, such as the federal False Claims Act, the federal Anti-Kickback Statute, and the U.S.

Foreign Corrupt Practices Act,

See “Business-Government Regulation” above.

federal and state laws, including the federal Sunshine Act,

and the implementation of Open Payments regulations under the Sunshine Act, require medical device companies to disclose certain payments

or other transfers of value made to certain healthcare providers or funds spent on marketing and promotion of medical device products.

Further, some state laws require medical device companies to report information related to payments to physicians and other health care

providers or marketing expenditures.

They also impose additional administrative and compliance burdens on us.

In particular, these laws

influence, among other things, how we structure our sales offerings and other interactions with health care providers, including discount

practices, customer support, education and training programs and physician consulting and other service arrangements, including those

with marketers and sales agents.

We may face significant costs in attempting to comply with these laws and regulations.

If we are found

to be in violation of any of these requirements or any actions or investigations are instituted against us, those actions could be costly

to defend and could have a significant impact on our business, including the imposition of significant criminal and civil fines and penalties,

exclusion from federal healthcare programs or other sanctions, and damage to our reputation or business.

The FCPA applies to companies, including ours, with a class of

securities registered under the Exchange Act.

The FCPA and other anti-bribery laws to which various aspects of our operations may be subject

generally prohibit companies and their intermediaries from making improper payments to officials for the purpose of obtaining or retaining

In various jurisdictions, our operations require that we and third parties acting on our behalf routinely interact with government

officials, including medical personnel who may be considered government officials for purposes of these laws because they are employees

of state-owned or controlled facilities.

Other anti-bribery laws to which various aspects of our operations may be subject, including

the United Kingdom Bribery Act, also prohibit improper payments to private parties and prohibit receipt of improper payments.

prohibit our employees from making or receiving corrupt payments, including, among other things, to require compliance by third parties

engaged to act on our behalf.

Our policies mandate compliance with these anti-bribery laws;

however, we operate in many parts of the world

that have experienced governmental and/or private corruption to some degree.

As a result, the existence and implementation of a robust

anti-corruption program cannot eliminate all risk that unauthorized reckless or criminal acts have been or will be committed by our employees

Violations of these laws, or allegations of such violations, could disrupt our business and harm our financial condition, results

of operations, cash flows and reputation.

If we are found to have violated laws protecting

the confidentiality of patient health information, we could be subject to civil or criminal penalties, which could increase our liabilities

and harm our reputation or our business.

There are a number of federal, state and foreign laws protecting

the confidentiality of certain patient health information, including patient records, and restricting the use and disclosure of that protected

In particular, the U.S.

Department of Health and Human Services, or HHS, promulgated patient privacy rules under HIPAA.

privacy rules protect medical records and other personal health information by limiting their use and disclosure, giving individuals the

right to access, amend and seek accounting of their own health information and limiting most use and disclosures of health information

to the minimum amount reasonably necessary to accomplish the intended purpose.

Additionally, the E.U.

General Data Protection Regulation

(the “GDPR”), which took effect in 2018, imposes more stringent data protection requirements and will provide for greater

penalties for noncompliance.

Thus, with respect to our operations in Europe, the GDPR may increase our responsibility and liability in

relation to personal data that we process and we may be required to put in place additional mechanisms ensuring compliance with the GDPR.

This may be onerous and adversely affect our business, financial condition, results of operations and prospects.

Additionally, if we or

any of our service providers are found to be in violation of the promulgated patient privacy rules under HIPAA or the GDPR, we could be

subject to civil or criminal penalties, which could be substantial and could increase our liabilities, harm our reputation and have a

material adverse effect on our business, financial condition and operating results.

In addition, a number of U.S.

states have enacted data privacy

and security laws and regulations that govern the collection, use, disclosure, transfer, storage, disposal, and protection of sensitive

personal information, such as social security numbers, financial information and other personal information.

For example, several U.S.

territories and all 50 states now have data breach laws that require timely notification to individual victims, and at times regulators,

if a company has experienced the unauthorized access or acquisition of sensitive personal data.

Other state laws include the California

Consumer Privacy Act (“CCPA”) which, among other things, contains new obligations for businesses that collect personal information

about California residents and affords those individuals new rights relating to their personal information that may affect our ability

to use personal information or share it with our business partners.

Meanwhile, other states have considered privacy laws like the CCPA.

Furthermore, it is anticipated that the California Privacy Rights Act of 2020, effective January 1, 2023, expands the CCPA’s requirements,

including applying to personal information of business representatives and employees and establishing a new regulatory agency to implement

and enforce the law.

We will continue to monitor and assess the impact of state law developments, which may impose substantial penalties

for violations, impose significant costs for investigations and compliance, allow private class-action litigation and carry significant

potential liability for our business.

The interpretation and enforcement of the laws and regulations

described above are uncertain and subject to change and may require substantial costs to monitor and implement compliance with any additional

requirements.

Failure to comply with U.S.

or international data protection laws and regulations could result in government enforcement

actions (which could include substantial civil and/or criminal penalties), private litigation, and/or adverse publicity and could negatively

affect our operating results and business.

Compliance with various regulations, including

those related to our status as a U.S.

public company and the manufacturing, labeling and marketing of our products, may result in heightened

general and administrative expenses and costs, divert management’s attention from revenue-generating activities and pose challenges

for our management team, which has limited time, personnel and finances to devote to regulatory compliance.

public company, we are subject to various regulatory

and reporting requirements, including those imposed by the SEC, the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, the Dodd-Frank

Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act, the listing requirements of the Nasdaq Capital Market and

other applicable securities rules and regulations.

Additionally, our medical products and manufacturing operations are regulated by the

FDA, the European Union and other governmental authorities both inside and outside of the United States.

Compliance with the rules and

regulations applicable to us as a publicly traded company in the United States and medical device manufacturer has greatly increased,

and may continue to increase, our legal, general and administrative and financial compliance costs and has made, and may continue to make,

some activities more difficult, time-consuming or costly.

Additionally, these regulatory requirements have diverted, and may continue

to divert, management’s attention from revenue-generating activities and may increase demands on management’s already-limited

Our management team consists of few employees, as the majority

of our employees are engaged in sales and marketing and research and development activities.

For more information, see “Part I,

Business—Employees” above.

In light of such constraints on its time, personnel and finances, our management may not

be able to implement programs and policies in an effective and timely manner to respond adequately to the heightened legal, regulatory

and reporting requirements applicable to us.

In the past, for example, we have not always been able to respond on a timely basis to requests

from regulators, although we have not to date experienced any long-term material adverse consequences as a result.

Similar deficiencies,

weaknesses, or lack of compliance with public company, medical device and other regulations could harm our reputation in the capital markets

or for quality and safety, negatively affect our ability to maintain our public company status and to develop, commercialize or continue

selling our products on a timely and effective basis, and cause us to incur sanctions, including fines, injunctions, and penalties.

In addition, complying with public disclosure rules makes our business

more visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties.

claims are successful, our business and operating results could be harmed, and even if the claims do not result in litigation or are resolved

in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and harm

our business and operating results.

We are also subject to the requirement of Section 1502 of the Dodd-Frank

Act and SEC rules related thereto to conduct due diligence and disclose and report on whether certain minerals and metals, known as “conflict

minerals,” are contained in our products and whether they originate from the Democratic Republic of Congo and certain adjoining

Each year our management team devotes significant time to conduct the required due diligence, and we may face reputational

challenges if we determine that certain of our products contain minerals not determined to be conflict free or if we are unable to sufficiently

verify the origins of all conflict minerals used in our products through the procedures we implement.

Risks Related to Our Intellectual Property and Information Technology

We depend on computer and telecommunications

systems we do not own or control and failures in our systems or a cybersecurity attack or breach of our IT systems or technology could

significantly disrupt our business operations or result in sensitive customer information being compromised which would negatively materially

affect our reputation and/or results of operations.

We have entered into agreements with third parties for hardware,

software, telecommunications, and other information technology services in connection with the operation of our business.

It is possible

we or a third party that we rely on could incur interruptions from a loss of communications, hardware or software failures, a cybersecurity

attack or a breach of our IT systems or technology, computer viruses or malware.

We believe that we have positive relations with our vendors

and maintain adequate anti-virus and malware software and controls;

however, any interruptions to our arrangements with third parties,

to our computing and communications infrastructure, or to our information systems or any of those operated by a third party that we rely

on could significantly disrupt our business operations.

In the current environment, there are numerous and evolving risks

to cybersecurity and privacy, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, employee malfeasance

and human or technological error.

High-profile security breaches at other companies and in government agencies have increased in recent

years, and security industry experts and government officials have warned about the risks of hackers and cyberattacks targeting businesses

such as ours.

Computer hackers and others routinely attempt to breach the security of technology products, services, and systems, and

to fraudulently induce employees, customers, or others to disclosure information or unwittingly provide access to systems or data.

A cyberattack

of our systems or networks that impairs our information technology systems could disrupt our business operations and result in loss of

service to customers, including technical support for our ReWalk devices.

While we have certain cybersecurity safeguards in place designed

to protect and preserve the integrity of our information technology systems, we have experienced and expect to continue to experience

actual or attempted cyberattacks of our IT systems or networks.

However, none of these actual or attempted cyberattacks has had a material

effect on our operations or financial condition.

Additionally, we have access to sensitive customer information

in the ordinary course of business.

If a significant data breach occurred, our reputation may be adversely affected, customer confidence

may be diminished, or we may be subject to legal claims, any of which may contribute to the loss of customers and have a material adverse

effect on us.

For more information, see “—Risks Related to Government Regulation.

If we are found to have violated laws

protecting the confidentiality of patient health information, we could be subject to civil or criminal penalties, which could increase

our liabilities and harm our reputation or our business.” above.

Our success depends in part on our ability

to obtain and maintain protection for the intellectual property relating to or incorporated into our products.

Our success depends in part on our ability to obtain and maintain

protection for the intellectual property relating to or incorporated into our products.

We seek to protect our intellectual property through

a combination of patents, trademarks, confidentiality, and assignment agreements with our employees and certain of our contractors, and

confidentiality agreements with certain of our consultants, scientific advisors, and other vendors and contractors.

In addition, we rely

on trade secret law to protect our proprietary software and product candidates/products in development.

For more information, see Business—Intellectual

The patent position of robotic and exoskeleton inventions can be

highly uncertain and involves many new and evolving complex legal, factual, and technical issues.

Patent laws and interpretations of those

laws are subject to change and any such changes may diminish the value of our patents or narrow the scope of our right to exclude others.

In addition, we may fail to apply for or be unable to obtain patents necessary to protect our technology or products from competition

or fail to enforce our patents due to lack of information about the exact use of technology or processes by third parties.

Also, we cannot

be sure that any patents will be granted in a timely manner or at all with respect to any of our patent pending applications or that any

patents that are granted will be adequate to exclude others for any significant period of time or at all.

Given the foregoing and in order

to continue reducing operational expenses in the future, we may invest fewer resources in filing and prosecuting new patents and on maintaining

and enforcing various patents, especially in regions where we currently do not focus our market growth strategy.

Litigation to establish or challenge the validity of patents, or

to defend against or assert against others infringement, unauthorized use, enforceability, or invalidity, can be lengthy and expensive

and may result in our patents being invalidated or interpreted narrowly and restricting our ability to be granted new patents related

to our pending patent applications.

Even if we prevail, litigation may be time consuming, force us to incur significant costs, and could

divert management’s attention from managing our business while any damages or other remedies awarded to us may not be valuable.

In addition, U.S.

patents and patent applications may be subject to interference proceedings, and U.S.

patents may be subject to re-examination

and review proceedings in the U.S.

Patent and Trademark Office.

Foreign patents may also be subject to opposition or comparable proceedings

in the corresponding foreign patent offices.

Any of these proceedings may be expensive and could result in the loss of a patent or denial

of a patent application, or the loss or reduction in the scope of one or more of the claims of a patent or patent application.

In addition, we seek to protect our trade secrets, know-how, and

confidential information that is not patentable by entering into confidentiality and assignment agreements with our employees and certain

of our contractors and confidentiality agreements with certain of our consultants, scientific advisors, and other vendors and contractors.

However, we may fail to enter into the necessary agreements, and even if entered into, these agreements may be breached or otherwise fail

to prevent disclosure, third-party infringement, or misappropriation of our proprietary information, may be limited as to their term and

may not provide an adequate remedy in the event of unauthorized disclosure or use of proprietary information.

Enforcing a claim that a

third party illegally obtained or is using our trade secrets without authorization may be expensive and time consuming, and the outcome

is unpredictable.

Some of our employees or consultants may own certain technology which they license to us for a set term.

If these technologies

are material to our business after the term of the license, our inability to use them could adversely affect our business and profitability.

We also have taken precautions to initiate reasonable safeguards

to protect our information technology systems.

However, these measures may not be adequate to safeguard our proprietary information, which

could lead to the loss or impairment thereof or to expensive litigation to defend our rights against competitors who may be better funded

and have superior resources.

In addition, unauthorized parties may attempt to copy or reverse engineer certain aspects of our products

that we consider proprietary, or our proprietary information may otherwise become known or may be independently developed by our competitors

or other third parties.

If other parties are able to use our proprietary technology or information, our ability to compete in the market

could be harmed.

Further, unauthorized use of our intellectual property may have occurred, or may occur in the future, without our knowledge.

If we are unable to obtain or maintain adequate protection for

intellectual property, or if any protection is reduced or eliminated, competitors may be able to use our technologies, resulting in harm

to our competitive position.

Our patents and proprietary technology and

processes may not provide us with a competitive advantage.

Robotics and exoskeleton technologies have been developing rapidly

in recent years.

We are aware of several other companies developing competing exoskeleton devices for individuals with limited mobility

and we expect the level of competition and the pace of development in our industry to increase.

For more information, see “Part

Business—Competition” above.

While we believe our tilt-sensor technology provides a more natural and superior method

of exoskeleton activation, which creates a better user experience, as well as that our licensed technology used in our ReStore device

is unique and provides better results when compared to other products, a variety of other activation and control methods exist for exoskeletons,

several of which are being developed by our competitors, or may be developed in the future.

As a result, our patent portfolio and proprietary

technology and processes may not provide us with a significant advantage over our competitors, and competitors may be able to design and

sell alternative products that are equal to or superior to our products without infringing on our patents.

In addition, as our current

patents begin to expire, we may lose a competitive advantage over our competitors as we will no longer be able to keep our competitors

from practicing the technology covered by the claim of the expired patents.

We may also be unable to adequately develop new technologies

and obtain future patent protection to preserve a competitive advantage.

If we are unable to maintain a competitive advantage, our business

and results of operations may be materially adversely affected.

Even in instances where others are found to infringe on our patents,

many countries have laws under which a patent owner may be compelled to grant licenses for the use of the patented technology to other

In addition, many countries limit the enforceability of patents against other parties, including government agencies or government

In these countries, a patent owner may have limited remedies, which could diminish the value of a patent in those countries.

Further, the laws of some countries do not protect intellectual property rights to the same extent as the laws of the United States, particularly

in the field of medical products, and effective enforcement in those countries may not be available.

The ability of others to market comparable

products could adversely affect our business.

We are not able to protect our intellectual

property rights in all countries.

Filing, prosecuting, maintaining, and defending patents on each

of our products in all countries throughout the world would be prohibitively expensive, and thus our intellectual property rights outside

the United States and Europe are limited.

In addition, the laws of some foreign countries, especially developing countries, such as China,

do not protect intellectual property rights to the same extent as federal and state laws in the United States.

Also, it may not be possible

to effectively enforce intellectual property rights in some countries at all or to the same extent as in the United States and other countries.

Consequently, we are unable to prevent third parties from using our inventions in all countries, or from selling or importing products

made using our inventions in the jurisdictions in which we do not have (or are unable to effectively enforce) patent protection.

may use our technologies in jurisdictions where we have not obtained patent protection to develop, market or otherwise commercialize their

own products, and we may be unable to prevent those competitors from importing those infringing products into territories where we have

patent protection, but enforcement may not be as strong as in the United States.

These products may compete with our products and our

patents and other intellectual property rights may not be effective or sufficient to prevent them from competing in those jurisdictions.

Moreover, strategic partners, competitors, or others in the chain of commerce may raise legal challenges against our intellectual property

rights or may infringe upon our intellectual property rights, including through means that may be difficult to prevent or detect.

Many companies have encountered significant problems in protecting

and defending intellectual property rights in foreign jurisdictions.

Proceedings to enforce our patent rights in the United States or

foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could

put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing, and could provoke

third parties to assert patent infringement or other claims against us.

We may not prevail in any lawsuits that we initiate, and the damages

or other remedies awarded, if any, may not be commercially meaningful.

Accordingly, our efforts to enforce our intellectual property rights

in the United States and around the world may be inadequate to obtain a significant commercial advantage from the intellectual property

that we develop or license from third parties.

We may be subject to patent infringement claims,

which could result in substantial costs and liability and prevent us from commercializing our current and future products.

The medical device industry is characterized by competing intellectual

property and a substantial amount of litigation over patent rights.

Our competitors in both the United States and abroad, many of which

have substantially greater resources and have made substantial investments in competing technologies, have been issued patents and filed

patent applications with respect to their products and processes and may apply for other patents in the future.

The large number of patents,

the rapid rate of new patent issuances, and the complexities of the technology involved increase the risk of patent litigation.

Determining whether a product infringes a patent involves complex

legal and factual issues and the outcome of patent litigation is often uncertain.

Even though we have conducted research of issued patents,

no assurance can be given that patents containing claims covering our products, technology or methods do not exist, have not been filed

or could not be filed or issued.

In addition, because patent applications can take years to issue and because publication schedules for

pending applications vary by jurisdiction, there may be applications now pending of which we are unaware, and which may result in issued

patents that our current or future products infringe.

Also, because the claims of published patent applications can change between publication

and patent grant, published applications that initially do not appear to be problematic may issue with claims that potentially cover our

products, technology, or methods.

Infringement actions and other intellectual property claims brought

against us, whether with or without merit, may cause us to incur substantial costs and could place a significant strain on our financial

resources, divert the attention of management, and harm our reputation.

We cannot be certain that we will successfully defend against

any allegations of infringement.

If we are found to infringe another party’s patents, we could be required to pay damages.

also be prevented from selling our infringing products, unless we can obtain a license to use the technology covered by such patents or

can redesign our products so that they do not infringe.

A license may be available on commercially reasonable terms or none at all, and

we may not be able to redesign our products to avoid infringement.

Further, any modification to our products could require us to conduct

clinical trials and revise our filings with the FDA and other regulatory bodies, which would be time consuming and expensive.

circumstances, we may not be able to sell our products at competitive prices or at all, and our business and operating results could be

We rely on trademark protection to distinguish

our products from the products of our competitors.

We rely on trademark protection to distinguish our products from

the products of our competitors.

We have registered the trademark “ReWalk” in Israel and in the United States.

The trademark

“ReStore” is registered in Europe, United States and United Kingdom.

In jurisdictions where we have not registered our trademark

and are using it, and as permitted by applicable local law, we rely on common law trademark protection.

Third parties may oppose our trademark

applications, or otherwise challenge our use of the trademarks, and may be able to use our trademarks in jurisdictions where they are

not registered or otherwise protected by law.

If our trademarks are successfully challenged or if a third party is using confusingly similar

or identical trademarks in particular jurisdictions before we do, we could be forced to rebrand our products, which could result in loss

of brand recognition, and could require us to devote additional resources to marketing new brands.

If others are able to use our trademarks,

our ability to distinguish our products may be impaired, which could adversely affect our business.

Further, we cannot assure you that

competitors will not infringe upon our trademarks, or that we will have adequate resources to enforce our trademarks.

We may be subject to damages resulting from

claims that our employees or we have wrongfully used or disclosed alleged trade secrets of their former employers.

Many of our employees were previously employed at other medical

device companies, including our competitors or potential competitors, and we may hire employees in the future that are so employed.

could in the future be subject to claims that these employees, or we, have inadvertently or otherwise used or disclosed trade secrets

or other proprietary information of their former employers.

If we fail in defending against such claims, a court could order us to pay

substantial damages and prohibit us from using technologies or features that are found to incorporate or be derived from the trade secrets

or other proprietary information of the former employers.

If any of these technologies or features that are important to our products,

this could prevent us from selling those products and could have a material adverse effect on our business.

Even if we are successful

in defending against these claims, such litigation could result in substantial costs and divert the attention of management.

Risks Related to Ownership of Our Ordinary Shares

Sales of a substantial number of ordinary shares

by us or our large shareholders, certain of whom may have registration rights, or dilutive exercises of a substantial number of warrants

by our warrant-holders could adversely affect the value of our ordinary shares.

Sales by us or our shareholders of a substantial number of ordinary

shares in the public market, or the perception that these sales might occur, could cause the value of our ordinary shares to decline or

could impair our ability to raise capital through a future sale of our equity securities.

Additionally, dilutive exercises of a substantial

number of warrants by our warrant-holders, or the perception that such exercises may occur, could put downward price on the market price

of our ordinary shares.

As of February 23, 2023, 19,414,215 ordinary shares were issuable

pursuant to the exercise of warrants, with exercise prices ranging from $1.25 to $9.375 per warrant, issued in private and registered

offerings of ordinary shares and warrants in November 2016, November 2018, February 2019, April 2019, June 2019, February 2020, July 2020,

December 2020, February 2021 and September 2021.

We have registered with the SEC all of these warrants and/or the resale of the shares

issuable upon their exercise.

There were also 6,679 ordinary shares issuable pursuant to the exercise of warrants granted to Kreos Capital

V (Expert Fund) Limited (“Kreos”), in connection with the December 30, 2015 signed loan agreement (the “Loan Agreement”)

in January and December 2016, with an exercise price that is now set to $7.50 per warrant.

For more information, see “Part I, Item

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Loan

Agreement with Kreos and Related Warrant to Purchase Ordinary Shares” and “Part I, Item 2.

Management’s Discussion and

Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Equity Raises”, in each case

All shares sold pursuant to an offering covered by a registration

statement would be freely transferable.

With respect to the outstanding warrants, there may be certain restrictions on the holders to

sell the underlying ordinary shares to the extent they are restricted securities, held by “affiliates” or would exceed certain

ownership thresholds.

Certain of our largest shareholders, may also have limitations under Rule 144 under the Securities Act on the resale

of certain ordinary shares they hold unless they are registered for resale under the Securities Act.

Despite these limitations and the

liquidity that we may gain from cash exercises of outstanding warrants, if we, our existing shareholders, or their affiliates sell a substantial

number of the above-mentioned ordinary shares in the public market, the market price of our ordinary shares could decrease significantly.

Shareholders may also incur substantial dilution if holders of our warrants exercise their warrants to purchase ordinary shares, which

could lower the market price of our ordinary shares.

Any such decrease could impair the value of your investment in us.

Future grants of ordinary shares under our

equity incentive plans to our employees, non-employee directors and consultants, or sales by these individuals in the public market, could

result in substantial dilution, thus decreasing the value of your investment in our ordinary shares, and certain grants may also require

shareholder approval.

In addition, stockholders will experience dilution upon the exercise of outstanding warrants.

We have historically used, and continue to use, our ordinary shares

as a means of both rewarding our employees, non-employee directors, and consultants and aligning their interests with those of our shareholders.

As of December 31, 2022, 5,733,730 ordinary shares remained available for issuance to our and our affiliates’ respective employees,

non-employee directors, and consultants under our equity incentive plans, including 2,799,051 ordinary shares subject to outstanding awards

(consisting of outstanding options to purchase 43,994 ordinary shares and 2,755,057 ordinary shares underlying unvested RSUs, and we may

seek to increase the number of shares available under our equity incentive plans in the future.

For more information, see Note 8b to our

consolidated financial statements for the year ended December 31, 2022, below.

Additionally, to the extent registered on a Form S-8, ordinary

shares granted or issued under our equity incentive plans will, subject to vesting provisions, lock-up restrictions, and Rule 144 volume

limitations applicable to our “affiliates,” be available for sale in the open market immediately upon registration.

as of December 31, 2022, there were 19,420,894 ordinary shares underlying issued and outstanding warrants, which if exercised for ordinary

shares, could decrease the net tangible book value of our ordinary shares and cause dilution to our existing shareholders.

substantial number of the above-mentioned ordinary shares in the public market could result in a significant decrease in the market price

of our ordinary shares and have a material adverse effect on an investment in our ordinary shares.

If we do not meet the expectations of equity

research analysts, if any, if the sole remaining equity analyst following our business does not continue to publish research or reports

about our business, or if the analyst issues unfavorable commentary or downgrade our ordinary shares, the price of our ordinary shares

could decline.

Additionally, we may fail to meet publicly announced financial guidance or other expectations about our business, which

would cause our ordinary shares to decline in value.

There is currently one equity analyst publishing

research reports about our business, and we are currently seeking to attract additional coverage.

If our results of operations are below

the estimates or expectations of our sole analyst or consensus assuming we have some analysts and investors, our share price could decline.

Moreover, the price of our ordinary shares could decline if one or more securities analysts downgrade our ordinary shares or if analysts

issue other unfavorable commentary or stop publishing research or reports about us or our business (as has occurred over time, with a

decrease in the number of analysts following us from five in 2014 to one in 2022).

Given that there is only one analyst that currently

covers our business, we face an increased risk that such analyst’s evaluation of our business, if less than positive, will cause

a larger decline in our stock price than would otherwise be the case if we had multiple analysts covering our business.

From time to time, we have also faced difficulty accurately projecting

our earnings and have missed certain of our publicly announced guidance.

If our financial results for a particular period do not meet

our guidance or if we reduce our guidance for future periods, the market price of our ordinary shares may decline.

We are a “smaller reporting company”

and the reduced reporting requirements applicable to such companies may make our ordinary shares less attractive to investors.

We are a “smaller reporting company” as defined in

Item 10(f)(1) of Regulation S-K, which allows us to take advantage of certain scaled disclosure requirements available specifically to

smaller reporting companies.

For example, we may continue to use reduced compensation disclosure obligations, and, provided we are also

a “non-accelerated filer,” we will not be obligated to follow the auditor attestation requirements of Section 404 of the Sarbanes-Oxley

We will remain a smaller reporting company until the last day of the fiscal year in which we have at least $100 million in revenue

and at least $700 million in aggregate market value of ordinary shares held by non-affiliated persons and entities (known as “public

float”), or, alternatively, if our revenue exceed $100 million, until the last day of the fiscal year in which our public float

was at least $250.0 million (in each case, with respect to public float, as measured as of the last business day of the second quarter

of such fiscal year).

For the year ended December 31, 2022, we recorded revenue of approximately $5.5 million.

We cannot predict or otherwise determine if investors will find

our securities less attractive as a result of our reliance on exemptions as a smaller reporting company and/or “non-accelerated

filer.” If some investors find our securities less attractive as a result, there may be a less active trading market for our ordinary

shares and the price of our ordinary shares may be more volatile.

We are subject to ongoing costs and risks associated

with determining whether our existing internal controls over financial reporting systems are compliant with Section 404 of the Sarbanes-Oxley

Act, and if we fail to achieve and maintain adequate internal controls it could have a material adverse effect on our stated results of

operations and harm our reputation.

We are required to comply with the internal control, evaluation,

and certification requirements of Section 404 of the Sarbanes-Oxley Act and the Public Company Accounting Oversight Board, which requires

us to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting.

we no longer qualify as a “smaller reporting company” and “non-accelerated filer,” our independent registered

public accounting firm will need to attest to the effectiveness of our internal control over financial reporting under Section 404.

our independent registered public accounting firm is required to undertake an assessment of our internal control over financial reporting,

the cost of our compliance with Section 404 will correspondingly increase.

Our compliance with applicable provisions of Section 404 will

require that we incur substantial accounting expense and expend significant management time on compliance-related issues as we implement

additional corporate governance practices and comply with reporting requirements.

Moreover, if we are not able to comply with the requirements

of Section 404 applicable to us in a timely manner, or if we or our independent registered public accounting firm identifies deficiencies

in our internal control over financial reporting that are deemed to be material weaknesses, the market price of our stock could decline

and we could be subject to sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial

and management resources.

The process of determining whether our existing internal controls

over financial reporting systems are compliant with Section 404 and whether there are any material weaknesses or significant deficiencies

in our existing internal controls requires the investment of substantial time and resources, including by our Chief Financial Officer

and other members of our senior management.

This determination and any remedial actions required could divert internal resources and take

a significant amount of time and effort to complete and could result in us incurring additional costs that we did not anticipate, including

the hiring of outside consultants.

We could experience higher than anticipated operating expenses and higher independent auditor fees

during and after the implementation of these changes.

Irrespective of compliance with Section 404, any failure of our

internal controls could have a material adverse effect on our stated results of operations and harm our reputation.

If we are unable to

implement any of the required changes to our internal control over financial reporting effectively or efficiently or are required to do

so earlier than anticipated, it could adversely affect our operations, financial reporting and/or results of operations and could result

in an adverse opinion on internal controls from our management and our independent auditors.

Further, if our internal control over financial

reporting is not effective, the reliability of our financial statements may be questioned, and our share price may suffer.

holders of our ordinary shares

may suffer adverse U.S.

tax consequences if we are characterized as a passive foreign investment company, or a PFIC ,

under Section 1297(a) of the Code.

Generally, if for any taxable year 75% or more of our gross income

is passive income, or at least 50% of the average quarterly value of our assets (which may be determined in part by the market value of

our ordinary shares, which is subject to change) are held for the production of, or produce passive income, we would be characterized

as a passive foreign investment company, or PFIC, for U.S.

federal income tax purposes.

Passive income for this purpose generally includes,

among other things, certain dividends, interest, royalties, rents, and gains from commodities and securities transactions and from the

sale or exchange of property that gives rise to passive income.

Passive income also includes amounts derived by reason of the temporary

investment of funds, including those raised in an offering.

In determining whether a non-U.S.

corporation is a PFIC, a proportionate share

of the income and assets of each corporation in which it owns, directly or indirectly, at least a 25% interest (by value) is taken into

The determination of whether we are a PFIC will depend on the nature

and composition of our income and the nature, composition, and value of our assets from time to time.

The 50% passive asset test described

above is generally based on the fair market value of each asset, with the value of goodwill and going concern value determined in large

part by reference to the market value of our ordinary shares, which may be volatile.

If we are characterized as a “controlled foreign

corporation,” or a “CFC”, under Section 957(a) of the Code and not considered publicly traded throughout the relevant

taxable year, however, the passive asset test may be applied based on the adjusted tax bases of our assets instead of the fair market

value of each asset (as described above).

However, if we are treated as publicly traded for at least 20 trading days during the relevant

taxable year, our assets would generally be required to be measured at their fair market value, even if we are a CFC.

Based on our gross income and assets, the market

price of our ordinary shares, and the nature of our business, we were not PFIC for the taxable year ended December 31, 2022.

this determination is subject to uncertainty.

In addition, there is a significant risk that we may be a PFIC for future taxable years,

unless the market price of our ordinary shares increases, or we reduce the amount of cash and other passive assets we hold relative to

the amount of non-passive assets we hold.

Accordingly, no assurances can be made regarding our PFIC status in one or more subsequent years,

counsel expresses no opinion with respect to our PFIC status in the taxable year ended December 31, 2022, or the current

year 2023, and also expresses no opinion with respect to our predictions or past determinations regarding our PFIC status in the past

or in the future.

If we are characterized as a PFIC, U.S.

holders of our ordinary

shares may suffer adverse tax consequences, including having gains realized on the sale of our ordinary shares treated as ordinary income,

rather than capital gain, the loss of the preferential tax rate applicable to dividends received on our ordinary shares by individuals

holders and having interest charges apply to distributions by us and to the proceeds of sales of our ordinary shares.

addition, special information reporting may be required.

Certain elections exist that may alleviate some of the adverse consequences of

PFIC status and would result in an alternative treatment (such as mark-to-market treatment or being able to make a qualified electing

fund election).

However, we do not intend to provide the information necessary for U.S.

Holders to make qualified electing fund elections

if we are classified as a PFIC.

Additionally, if we are characterized as a PFIC,

for any taxable year during which a U.S.

holder holds ordinary shares, we generally will continue to be treated as a PFIC with respect

holder for all succeeding years during which such U.S.

holder holds ordinary shares unless we cease to be a PFIC and such

holder makes a “deemed sale” election with respect to such ordinary shares.

If such election is made, such U.S.

will be deemed to have sold such ordinary shares held by such U.S.

holder at their fair market value on the last day of the last taxable

year in which we qualified as a PFIC, and any gain from such deemed sale would be treated as described above.

holder of our ordinary shares is strongly urged to consult

his, her or its tax advisor regarding the application of these rules and the availability of any potential elections.

The price of our ordinary shares may be volatile,

and you may lose all or part of your investment.

Our ordinary shares were first publicly offered in our initial

public offering in September 2014, at a price of $300.00 per share, and our ordinary shares have subsequently traded as high as $1,092.75

per share and as low as $0.41 per share through February 23, 2023.

All prices have been adjusted to reflect our 25-to-1 reverse stock

split, which we effected in 2019.

The market price of our ordinary shares could be highly volatile and may fluctuate substantially as

a result of many factors.

Moreover, while there is no established public trading market for the warrants offered in our follow-on public

offerings, and we do not expect one to develop, our ordinary shares will be issuable pursuant to exercise of these warrants.

warrants are exercisable into our ordinary shares, volatility, or a reduction in the market price of our ordinary shares could have an

adverse effect on the trading price of the warrants.

Factors which may cause fluctuations in the price of our ordinary shares include,

but are not limited to:

actual or anticipated fluctuations in our growth rate or results of operations or those of our competitors;

customer acceptance of our products;

announcements by us or our competitors of new products or services, commercial relationships, acquisitions, or expansion plans;

announcements by us or our competitors of other material developments;

our involvement in litigation;

changes in government regulation applicable to us and our products;

sales, or the anticipation of sales, of our ordinary shares, warrants and debt securities by us, or sales of our ordinary shares

by our insiders or other shareholders, including upon expiration of contractual lock-up agreements;

developments with respect to intellectual property rights;

competition from existing or new technologies and products;

changes in key personnel;

the trading volume of our ordinary shares;

changes in the estimation of the future size and growth rate of our markets;

changes in our quarterly or annual forecasts with respect to operating results and financial conditions;

general economic and market conditions and

Announcements regarding business acquisitions.

In addition, the stock markets have experienced extreme price and

volume fluctuations.

Broad market and industry factors may materially harm the market price of our ordinary shares, regardless of our

operating performance.

Technical factors in the public trading market for our ordinary shares may produce price movements that may or

may not comport with macro, industry or Company-specific fundamentals, including, without limitation, the sentiment of retail investors

(including as may be expressed on financial trading and other social media sites), the amount and status of short interest in our securities,

access to margin debt, trading in options and other derivatives on our ordinary shares and any related hedging or other technical trading

In the past, following periods of volatility in the market price of a company’s securities, securities class action

litigation has often been instituted against that company, as was the case for ReWalk in a securities class action dismissed in full in

November 2020.

If we become involved in any similar litigation, we could incur substantial costs and our management’s attention

and resources could be diverted.

Risks Related to Our Incorporation and Location in Israel

Our technology development and quality headquarters

and the manufacturing facility for our products are located in Israel and, therefore, our results may be adversely affected by economic

restrictions imposed on, and political and military instability in, Israel.

Our technology development and quality headquarters, which houses

substantially all of our research and development and our core research and development team, including engineers, machinists, and quality

and regulatory personnel, as well as the facility of our contract manufacturer, Sanmina, are located in Israel.

Many of our employees,

directors and officers are residents of Israel.

Accordingly, political, economic, and military conditions in Israel and the surrounding

region may directly affect our business.

Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken

place between Israel and its Arab neighbors, Hamas (an Islamist militia and political group in the Gaza Strip), Hezbollah (an Islamist

militia and political group in Lebanon) and other armed groups.

Any hostilities involving Israel or the interruption or curtailment of

trade within Israel or between Israel and its trading partners could materially and adversely affect our business, financial condition

and results of operations and could make it more difficult for us to raise capital.

In particular, an interruption of operations at the

Tel Aviv airport related to the conflict in the Gaza Strip or otherwise could prevent or delay shipments of our components or products.

Although we maintain inventory in the United States and Germany, an extended interruption could materially and adversely affect our business,

financial condition, and results of operations.

Recent political uprisings, social unrest, and violence in various

countries in the Middle East and North Africa, including Israel’s neighbors Lebanon, Egypt, and Syria, are affecting the political

stability of those countries.

This instability may lead to deterioration of the political relationships that exist between Israel and

these countries and has raised concerns regarding security in the region and the potential for armed conflict.

Our commercial insurance

covers some, but not all, losses that may occur as a result of an event associated with the security situation in the Middle East.

losses or damages incurred by us could have a material adverse effect on our business.

In addition, Iran has threatened to attack Israel

and is widely believed to be developing nuclear weapons.

Iran is also believed to have a strong influence among parties hostile to Israel

in areas that neighbor Israel, such as the Syrian government, Hamas in Gaza and Hezbollah in Lebanon.

Any armed conflicts, terrorist activities

or political instability in the region could materially and adversely affect our business, financial condition, and results of operations.

Our operations and the operations of our contract

manufacturer, Sanmina, may be disrupted as a result of the obligation of Israeli citizens to perform military service.

Many Israeli citizens are obligated to perform one month, and in

some cases more, of annual military reserve duty until they reach the age of 45 (or older, for reservists with certain occupations) and,

in the event of a military conflict, may be called to active duty.

In response to terrorist activity, there have been periods of significant

call-ups of military reservists.

It is possible that there will be additional military reserve duty call-ups in the future in connection

with this conflict or otherwise.

Some of our executive officers and employees, as well as those of Sanmina, the manufacturer of all of

our products, are required to perform annual military reserve duty in Israel and may be called to active duty at any time under emergency

circumstances.

Although these call-ups have not had a material impact on our operations or on Sanmina’s ability to manufacture our

products, our operations and the operations of Sanmina could be disrupted by such call-ups.

Our sales may be adversely affected by boycotts

Several countries, principally in the Middle East, restrict doing

business with Israel and Israeli companies, and additional countries may impose restrictions on doing business with Israel and Israeli

companies whether as a result of hostilities in the region or otherwise.

In addition, there have been increased efforts by activists to

cause companies and consumers to boycott Israeli goods based on Israeli government policies.

Such actions, particularly if they become

more widespread, may adversely impact our ability to sell our products.

The tax benefits that are available to us require

us to continue to meet various conditions and may be terminated or reduced in the future, which could increase our costs and taxes.

Some of our operations in Israel, referred to as “Beneficiary

Enterprises,” carry certain tax benefits under the Israeli Law for the Encouragement of Capital Investments, 5719-1959, or the Investment

Substantially all of our future income before taxes can be attributed to these programs.

If we do not meet the requirements for maintaining

these benefits or if our assumptions regarding the key elements affecting our tax rates are rejected by the tax authorities, they may

be reduced or cancelled, and the relevant operations would be subject to Israeli corporate tax at the standard rate.

In addition to being

subject to the standard corporate tax rate, we could be required to refund any tax benefits that we may receive in the future, plus interest

and penalties thereon.

Even if we continue to meet the relevant requirements, the tax benefits that our current “Beneficiary Enterprises”

receive may not be continued in the future at their current levels or at all.

If these tax benefits were reduced or eliminated, the amount

of taxes that we pay would likely increase, as all of our Israeli operations would consequently be subject to corporate tax at the standard

rate, which could adversely affect our results of operations.

Additionally, if we increase our activities outside of Israel, for example,

by way of acquisitions, our increased activities may not be eligible for inclusion in Israeli tax benefit programs.

For a discussion of

our current tax obligations, see “Part II.

Item 7, Management’s Discussion and Analysis of Financial Condition and Results

of Operations.”

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.

From our inception through December 31, 2022, we received a total

of $2.3 million from the Israel Innovation Authority, or the IIA.

We may in the future apply to receive additional grants from the IIA

to support our research and development activities.

With respect to some grants that were royalty-bearing grants, we are committed to

paying royalties at a rate of 3.0% on sales proceeds up to the total amount of grants received, linked to the dollar, and bearing interest

at an annual rate of LIBOR applicable to dollar deposits.

Even after payment in full of these amounts, we will still be required to comply

with the requirements of the Israeli Encouragement of Industrial Research, Development and Technological Innovation Law, 1984, or the

R&D Law, and related regulations, with respect to those past grants.

When a company develops know-how, technology or products using

IIA grants, the terms of these grants and the R&D Law restrict the transfer outside of Israel of such know-how, and of the manufacturing

or manufacturing rights of such products, technologies, or know-how, without the prior approval of the IIA.

Therefore, if aspects of our

technologies are deemed to have been developed with IIA funding, the discretionary approval of an IIA committee would be required for

any transfer to third parties outside of Israel of know-how or manufacturing or manufacturing rights related to those aspects of such

technologies.

Furthermore, the IIA may impose certain conditions on any arrangement under which it permits us to transfer technology or

development out of Israel or may not grant such approvals at all.

Furthermore, the consideration available to our shareholders in

a future transaction involving the transfer outside of Israel of technology or know-how developed with IIA funding (such as a merger or

similar transaction) may be reduced by any amounts that we are required to pay to the IIA.

In addition to the above, any non-Israeli citizen, resident or

entity that, among other things, (i) becomes a holder of 5% or more of our share capital or voting rights, (ii) is entitled to appoint

one or more of our directors or our chief executive officer or (iii) serves as one of our directors or as our chief executive officer

(including holders of 25% or more of the voting power, equity or the right to nominate directors in such direct holder, if applicable)

is required to notify the IIA and undertake to comply with the rules and regulations applicable to the grant programs of the IIA, including

the restrictions on transfer described above.

Such notification will be required in connection with the investment being made by an investor

which may discourage or limit investments from foreign investors in our company.

We may become subject to claims for remuneration or royalties for

assigned service invention rights by our employees, which could result in litigation and adversely affect our business.

A significant portion of our intellectual property has been developed

by our employees in the course of their employment for us.

Under the Israeli Patent Law, 5727-1967, or the Patent Law, and recent decisions

by the Israeli Supreme Court and the Israeli Compensation and Royalties Committee, a body constituted under the Patent Law, employees

may be entitled to remuneration for intellectual property that they develop for us unless they explicitly waive any such rights.

we enter into agreements with our employees pursuant to which they agree that any inventions created in the scope of their employment

or engagement are owned exclusively by us, we may face claims demanding remuneration.

As a consequence of such claims, we could be required

to pay additional remuneration or royalties to our current and former employees, or be forced to litigate such claims, which could negatively

affect our business.

Provisions of Israeli law and our Articles

of Association may delay, prevent, or otherwise impede a merger with, or an acquisition of, us, even when the terms of such a transaction

are favorable to us and our shareholders.

Israeli corporate law regulates mergers, requires tender offers

for acquisitions of shares above specified thresholds, requires special approvals for transactions involving directors, officers or significant

shareholders and regulates other matters that may be relevant to such types of transactions.

For example, a tender offer for all of a

company’s issued and outstanding shares can only be completed if the acquirer receives positive responses from the holders of at

least 95% of the issued share capital.

Completion of the tender offer also requires approval of a majority of the offerees that do not

have a personal interest in the tender offer, unless at least 98% of the company’s outstanding shares are tendered.

the shareholders, including those who indicated their acceptance of the tender offer (unless the acquirer stipulated in its tender offer

that a shareholder that accepts the offer may not seek appraisal rights), may, at any time within six months following the completion

of the tender offer, petition an Israeli court to alter the consideration for the acquisition.

Israeli law also requires a “special

tender offer” in certain cases where a shareholder crosses the 25% or 45% holding threshold, and it imposes procedural and special

voting requirements for the approval of a merger in certain cases.

Our Articles of Association provide that our directors (other than

external directors, a requirement of Israeli corporate law from which we have opted out in accordance with an exemption for which we are

currently eligible) are elected on a staggered basis, such that a potential acquirer cannot readily replace our entire Board of Directors

at a single annual general shareholder meeting.

This could prevent a potential acquirer from receiving board approval for an acquisition

proposal that our Board of Directors opposes.

Furthermore, Israeli tax considerations may make potential transactions

unappealing to us or to our shareholders whose country of residence does not have a tax treaty with Israel exempting such shareholders

from Israeli tax.

For example, Israeli tax law does not recognize tax-free share exchanges to the same extent as U.S.

to mergers involving an exchange of shares, Israeli tax law allows for tax deferral in certain circumstances but makes the deferral contingent

on the fulfillment of a number of conditions, including, in some cases, a holding period of two years from the date of the transaction

during which sales and dispositions of shares of the participating companies are subject to certain restrictions.

Moreover, with respect

to certain share swap transactions, the tax deferral is limited in time, and when such time expires, the tax becomes payable even if no

disposition of the shares has occurred.

These and other similar provisions could delay, prevent or impede an acquisition of us or our

merger with another company, even if such an acquisition or merger would be beneficial to us or to our shareholders.

We recently amended our articles of association

to increase our authorized share capital.

There are certain risks associated with this increase.

In April 2021, following the receipt of shareholder approval, we

amended our articles of association to increase the Company’s authorized share capital.

As a result of this increase, the Company

is now authorized to issue 120,000,000 ordinary shares, of which 59,480,132 ordinary shares were outstanding as of February 23, 2023.

The objective of the increase in authorized share capital was to maintain our flexibility to raise money in the capital markets, including

in the event of a reduction in the value of our shares.

Although the purpose of the increase in authorized share capital

was to preserve our capital-raising position, these additional shares may also be issued in the future for other purposes, such as compensation,

or equity-based mergers, acquisition or licensing deals, giving rise to further opportunities for dilution.

Future issuances of ordinary

shares will dilute the voting power and ownership of our existing shareholders, and, depending on the amount of consideration received

in connection with the issuance, could also reduce shareholders’ equity on a per-share basis.

Due to the increase in authorized

capital, the dilution to the ownership interest of our existing shareholders may be greater than would occur had the increase not taken

The newly available authorized shares resulting from the increase

in authorized share capital may have the potential to limit the opportunity for our shareholders to dispose of their ordinary shares at

We currently do not have any acquisitions or other major transactions planned that would require us to increase our authorized

share capital, and our Board of Directors does not intend to use the increase of the newly authorized reserve as an anti-takeover device.

However, the authorized shares could, in theory, also be used to resist or frustrate a third-party transaction that is favored by a majority

of the independent shareholders (for example, by permitting issuances that would dilute the share ownership of a person seeking to effect

a change in the composition of our Board of Directors or management of the Company or contemplating a tender offer or other transaction

for the combination of the Company with another company).

It may be difficult to enforce a judgment of

court against us, our officers, and directors, to assert U.S.

securities laws claims in Israel or to serve process on our officers

and directors.

We are incorporated in Israel.

Although the majority of our directors

and executive officers reside within the United States and most of the assets of these persons are also likely located within the United

States, some of our directors and executive officers reside and may have the majority of their assets outside the United States.

Additionally,

most of our assets are located outside of the United States.

Therefore, a judgment obtained against us, or those of our directors and

executive officers residing outside of the United States, including a judgment based on the civil liability provisions of the U.S.

securities laws, may not be collectible in the United States and may not be enforced by an Israeli court.

It also may be difficult for

you to effect service of process in the United States on those directors and executive officers residing outside of the United States

or to assert U.S.

securities law claims in original actions instituted in Israel.

Israeli courts may refuse to hear a claim based on an

alleged violation of U.S.

securities laws reasoning that Israel is not the most appropriate forum in which to bring such a claim.

even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S.

law is applicable to the claim.

law is found to be applicable, the content of applicable U.S.

law must be proven as a fact by expert witnesses, which can be a time-consuming

and costly process.

Certain matters of procedure will also be governed by Israeli law.

There is little binding case law in Israel that

addresses the matters described above.

As a result of the difficulty associated with enforcing a judgment against us in Israel, you may

be able to collect only limited, or may be unable to collect any, damages awarded by either a U.S.

or foreign court.

In April 2021, we amended our articles of association such that,

unless we consent in writing to the selection of an alternative forum, (i) the federal courts of the United States will be the exclusive

forum for the resolution of any claim arising under the Securities Act, and (ii) the Tel-Aviv District Court will be the exclusive forum

for (a) a derivative action or derivative proceeding that is filed in the name of the Company;

(b) any action grounded in a breach of

fiduciary duty of a director, officeholder or other employee towards us or our shareholders;

or (c) any action the cause of which results

from any provision of the Companies Law or the Israel Securities Law, 5728-1968.

We have retained the ability to consent to an alternative

forum in circumstances if we determine shareholder interests are best served by permitting a particular dispute to proceed in a forum

other than the federal district courts or State of Israel, as applicable.

However, there is uncertainty as to whether a court would enforce

these provisions.

Your rights and responsibilities as a shareholder

will be governed by Israeli law which differs in some material respects from the rights and responsibilities of shareholders of U.S.

The rights and responsibilities of the holders of our ordinary

shares are governed by our Articles of Association and by Israeli law.

These rights and responsibilities differ in some material respects

from the rights and responsibilities of shareholders in U.S.-based corporations.

In particular, a shareholder of an Israeli company has

a duty to act in good faith and in a customary manner in exercising its rights and performing its obligations towards the company and

other shareholders, and to refrain from abusing its power in the company, including, among other things, in voting at a general meeting

of shareholders on matters such as amendments to a company’s articles of association, increases in a company’s authorized

share capital, mergers and acquisitions and related party transactions requiring shareholder approval.

In addition, a shareholder who

is aware that it possesses the power to determine the outcome of a shareholder vote or to appoint or prevent the appointment of a director

or executive officer in the company has a duty of fairness toward the company.

There is limited case law available to assist us in understanding

the nature of this duty or the implications of these provisions.

These provisions may be interpreted to impose additional obligations

and liabilities on holders of our ordinary shares that are not typically imposed on shareholders of U.S.

corporations.

Our business could be negatively affected as

a result of actions of activist shareholders, and such activism could impact the trading value of our securities.

In recent years, certain Israeli issuers listed on United States

exchanges have been faced with governance-related demands from activist shareholders, unsolicited tender offers and proxy contests.

our relatively low market cap and cash balance we might be an attractive target for such activists.

In connection with our 2022 Annual

General Meeting of Shareholders, Creative Value Capital Limited Partnership (“CVC”), which claimed to hold approximately three

percent of our outstanding shares, nominated two candidates for election to our Board of Directors and submitted two additional proposals

(including amendments to our Articles of Association) for approval at our 2022 Annual General Meeting of Shareholders held on July 27,

Although none of CVC’s proposals were approved at the meeting, addressing and responding to such proposals was significantly

costly and time-consuming, and diverted the attention of our management and employees.

Responding to these types of actions by activist shareholders could

be costly and time-consuming, disrupting our operations and diverting the attention of management and our employees.

Such activities could

interfere with our ability to execute our strategic plan.

In addition, a proxy contest for the election of directors at our annual meeting

would require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management

and our Board of Directors.

The perceived uncertainties as to our future direction also could affect the market price and volatility of

our securities.

General Risks

Exchange rate fluctuations between the U.S.

dollar, the euro and the NIS may negatively affect our earnings.

dollar is our functional

and reporting currency.

However, we pay a significant portion of our expenses in NIS and in euro, and we expect this to continue.

result, we are exposed to exchange rate risks that may materially and adversely affect our financial results.

Accordingly, any appreciation

of the NIS or euro relative to the U.S.

dollar would adversely impact our net loss or net income, if any.

For example, If the NIS appreciates

against the U.S.

dollar or if the value of the NIS declines against the U.S.

dollar at a time when the rate of inflation in the cost of

Israeli goods and services exceeds the rate of decline in the relative value of the NIS, then the U.S.

dollar cost of our operations in

Israel would increase and our results of operations could be materially and adversely affected.

Our operations also could

be adversely affected if we are unable to effectively hedge against currency fluctuations in the future.

We cannot predict any future

trends in the rate of inflation in Israel or the rate of devaluation (if any) of the NIS against the U.S.

For example, while the

NIS devalued against the U.S.

dollar at a rate of approximately 4% during the fiscal year 2022, during the year 2021 and 2020 the NIS

appreciated against the U.S.

dollar at a rate of approximately 3% and 7%, respectively.

The Israeli annual rate of inflation amounted

to 5.3%, 1.5%, and negative 0.6% for the years ended December 31, 2022, 2021 and 2020, respectively.

We have in the past engaged in limited hedging

activities, and we may enter into other hedging arrangements with financial institutions from time to time.

Any hedging strategies that

we may implement in the future to mitigate currency risks, such as forward contracts, options and foreign exchange swaps related to transaction

exposures may not eliminate our exposure to foreign exchange fluctuations.

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

Risk Factors—The

economic effects of ‘Brexit’ may affect relationships with existing and future customers and could have an adverse impact

on our business and operating results .

We are subject to certain regulatory regimes

that may affect the way that we conduct business internationally, and our failure to comply with applicable laws and regulations could

materially adversely affect our reputation and result in penalties and increased costs.

We are subject to a complex system of laws and regulations related

to international trade, including economic sanctions and export control laws and regulations.

We also depend on our distributors

and agents for compliance and adherence to local laws and regulations in the markets in which they operate.

Significant political or regulatory

developments in the jurisdictions in which we sell our products, such as those stemming from the presidential administration in the United

States or the U.K.’s exit from the E.U.

(known as “Brexit”), are difficult to predict and may have a material adverse

effect on us.

For example, in the United States, the Trump administration-imposed tariffs on imports from China, Mexico, Canada,

and other countries, and expressed support for greater restrictions on free trade and increase tariffs on goods imported into the United

Changes in U.S.

political, regulatory, and economic conditions or in its policies governing international trade and foreign manufacturing

and investment in the United States could adversely affect our sales in the United States.

We are also subject to the U.S.

Foreign Corrupt Practices Act

and may be subject to similar worldwide anti-bribery laws that generally prohibit companies and their intermediaries from making

improper payments to government officials for the purpose of obtaining or retaining business.

Despite our compliance and training

programs, we cannot be certain that our procedures will be sufficient to ensure consistent compliance with all applicable international

trade and anti-corruption laws, or that our employees or channel partners will strictly follow all policies and requirements to which

we subject them.

Any alleged or actual violations of these laws may subject us to government scrutiny, investigation, debarment,

and civil and criminal penalties, which may have an adverse effect on our results of operations, financial condition and reputation.

Our business may be materially affected by

changes to fiscal and tax policies.

Potentially negative or unexpected tax consequences of these policies, or the uncertainty surrounding

their potential effects, could adversely affect our results of operations and share price.

The rules dealing with U.S.

federal, state and local income taxation

are constantly under review by persons involved in the legislative process and by the Internal Revenue Service (the “IRS”)

Treasury Department.

Changes to tax laws (which changes may have retroactive application) could adversely affect us or holders

of our ordinary shares.

In recent years, many such changes have been made, and changes are likely to continue to occur in the future.

It cannot be predicted whether, when, in what form or with what effective dates tax laws, regulations and rulings may be enacted, promulgated

or issued, which could result in an increase in our or our shareholders’ tax liability or require changes in the manner in which

we operate in order to minimize or mitigate any adverse effects of changes in tax law.

In addition, foreign governments may enact tax laws in response

to the changes in the rules dealing with U.S.

federal, state and local income taxation or otherwise that could result in further changes

to global taxation and materially affect our financial position and results of operations.

The uncertainty surrounding the effect of the

reforms on our financial results and business could also weaken confidence among investors.

holders of our ordinary shares

may suffer adverse U.S.

tax consequences if we are characterized as a controlled foreign corporation, or a CFC, under Section 957 of the

Each “Ten Percent Shareholder” (as defined below) in

corporation that is classified as a “controlled foreign corporation,” or a CFC, for U.S.

federal income tax purposes

generally is required to include in income for U.S.

federal tax purposes such Ten Percent Shareholder’s pro rata share of the CFC’s

“Subpart F income,” global intangible low-taxed income, and investment of earnings in U.S.

property, even if the CFC has made

no distributions to its shareholders.

Subpart F income generally includes dividends, interest, rents and royalties, gains from the sale

of securities and income from certain transactions with related parties.

In addition, a Ten Percent Shareholder that realizes gain

from the sale or exchange of shares in a CFC may be required to classify a portion of such gain as dividend income rather than capital

corporation generally will be classified as a CFC for U.S.

federal income tax purposes if Ten Percent Shareholders own,

directly or indirectly, more than 50% of either the total combined voting power of all classes of stock of such corporation entitled to

vote or of the total value of the stock of such corporation.

A “Ten Percent Shareholder” is a United States person (as defined

by the Code), who owns or is considered to own 10% or more of (1) the total combined voting power of all classes of stock entitled to

vote or (2) the value of all classes of stock of such corporation.

The determination of CFC status is complex and includes attribution

rules, the application of which is not entirely certain.

During our 2022 taxable year, we believe

that we had one shareholder that was a Ten Percent Shareholder for U.S.

federal income tax purposes.

However, our CFC status for the taxable

year ending on December 31, 2022, and our current taxable year is unknown, and we may be a CFC for the taxable year ending on December

31, 2022, our current taxable year or a following year.

In addition, recent changes to the attribution rules relation to the determination

of CFC status may make it difficult to determine our CFC status for any taxable year or the CFC status of any of our subsidiaries.

holders should consult their own tax advisors with respect to the potential adverse U.S.

tax consequences of becoming a Ten Percent Shareholder

If we are classified as both a CFC and a passive foreign investment company, or PFIC, we generally will not be treated as a

PFIC with respect to those U.S.

holders that meet the definition of a Ten Percent Shareholder during the period in which we are a CFC.

If there are significant disruptions in our

information technology systems, our business, financial condition and operating results could be adversely affected.

The efficient operation of our business depends on our information

technology systems.

We rely on our information technology systems to effectively manage sales and marketing data, accounting and financial

functions, inventory management, product development tasks, research and development data, customer service and technical support functions.

Our information technology systems are vulnerable to damage or interruption from earthquakes, fires, floods and other natural disasters,

terrorist attacks, attacks by computer viruses or hackers, power losses, and computer system or data network failures.

In addition, our

data management application is hosted by a third-party service provider whose security and information technology systems are subject

to similar risks, and our products’ systems contain software which could be subject to computer virus or hacker attacks or other

The failure of our or our service providers’ information

technology systems or our products’ software to perform as we anticipate or our failure to effectively implement new information

technology systems could disrupt our entire operation or adversely affect our software products and could result in decreased sales, increased

overhead costs, and product shortages, all of which could have a material adverse effect on our reputation, business, financial condition,

and operating results.

If we fail to properly manage our anticipated

growth, our business could suffer.

Our growth and product expansion has placed, and we expect that

it will continue to place, a significant strain on our management team and on our financial resources.

Failure to manage our growth effectively

could cause us to misallocate management or financial resources, and result in losses or weaknesses in our infrastructure, which could

materially adversely affect our business.

Additionally, our anticipated growth will increase the demands placed on our suppliers, resulting

in an increased need for us to manage our suppliers and monitor for quality assurance.

Any failure by us to manage our growth effectively

could have an adverse effect on our ability to achieve our business objectives.

We are highly dependent on the

knowledge and skills of our senior management , and if we are not successful

in attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.

Our ability to compete in the highly competitive medical devices

industry depends upon our ability to attract and retain highly qualified managerial, scientific, sales and medical personnel.

We are highly

dependent on our senior management team and have benefited substantially from the leadership and performance of our senior management.

For example, we depend on our Chief Executive Officer’s experience successfully scaling an early-stage medical device company, as

well as the experience of other members of management.

The loss of the services of any of our executive officers and other key employees,

and our inability to find suitable replacements could result in delays in product development and harm our business.

Competition for senior

management in our industry is intense and we cannot guarantee that we will be able to retain our personnel.

Additionally, we do not carry

key man insurance on any of our current executive officers.

The loss of the services of certain members of our senior management could

prevent or delay the implementation and completion of our strategic objectives or divert management’s attention to seeking qualified

replacements.

Shutdowns of the U.S.

federal government could

materially impair our business and financial condition.

Development of our product candidates and/or regulatory approval

may be delayed for reasons beyond our control.

For example, in 2018 and 2019 the U.S.

government has shut down several times and certain

regulatory agencies, such as the FDA and the SEC, have had to furlough critical FDA, SEC, and other government employees and stop critical

If a prolonged government shutdown or budget sequestration occurs, it could significantly impact the ability of the FDA to

timely review and process our regulatory submissions, which could have a material adverse effect on our business.

Further, in our operations

as a public company, future government shutdowns could impact our ability to access the public markets, such as through the declaration

of effectiveness of registration statements and obtain necessary capital in order to properly capitalize and continue our operations.

STAFF COMMENTS

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business