What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-02-23 compared with 2022-02-24 · 389 added, 451 removed, 311 unchanged (73% of the section changed)

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

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should

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Risk Factors.”

We are an innovative medical device company that is designing,

developing, and commercializing robotic exoskeletons that allow individuals with mobility impairments or other medical conditions the

ability to stand and walk once again.

We have developed and are continuing to commercialize our ReWalk Personal and ReWalk Rehabilitation

devices for individuals with spinal cord injury (“SCI Products”), which are exoskeletons designed for individuals with paraplegia

that use our patented tilt-sensor technology and an on-board computer and motion sensors to drive motorized legs that power movement.

We have also developed and began commercializing our ReStore device

in June 2019.

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

due to stroke.

During the second quarter of 2020 we have finalized and moved to implement two separate agreements to distribute additional

product lines in the U.S.

The Company will be the exclusive distributor of the MediTouch Tutor movement biofeedback systems in

the United States and will also have distribution rights for the MYOLYN MyoCycle FES cycles to U.S.

rehabilitation clinics and personal

sales through the U.S.

Department of Veterans Affairs (“VA”) hospitals and other personal sales.

These new products will improve

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

Our principal markets are the United States and Europe.

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

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

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

revenues from a combination of third-party payors, self-payors, including private and government employers, and institutions.

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

electronic exoskeleton technologies such as the ReWalk Personal, we are pursuing various paths of reimbursement and support fundraising

efforts by institutions and clinics.

In December 2015, the U.S.

Department of Veterans Affairs, or the VA, issued a national policy for

the evaluation, training and procurement of ReWalk Personal exoskeleton systems for all qualifying veterans across the United States.

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

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

According to a 2017 report published by the Centers for Medicare

and Medicaid Services, or CMS, approximately 55% of the spinal cord injury population which are at least five years post their injury

date are covered by CMS.

In July 2020, a code was issued for ReWalk Personal 6.0 (effective October 1, 2020), which might later be followed

by coverage policy of CMS.

Additionally, to date, several private insurers in the United States

and Europe have provided reimbursement for ReWalk in certain cases.

In Germany, we continue to make progress toward achieving ReWalk coverage

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

In September 2017, each of German insurer BARMER GEK (“Barmer”)

and national social accident insurance provider Deutsche Gesetzliche Unfallversicherung (“DGUV”), indicated that they will

provide coverage to users who meet certain inclusion and exclusion criteria.

In February 2018, the head office of German statutory health

insurance, or SHI, Spitzenverband (“GKV”) confirmed their decision to list the ReWalk Personal 6.0 exoskeleton system in the

German Medical Device Directory.

This decision means that ReWalk will be listed among all medical devices for compensation, which SHI

providers can procure for any approved beneficiary on a case-by-case basis.

During the year 2020 we announced several new agreements with

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

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

We are currently working

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

6.0 device for their beneficiaries within their system.

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

two separate agreements to distribute additional product lines in the U.S.

The Company will be the exclusive distributor of the

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

rehabilitation clinics and personal sales through the VA hospitals.

These new products will improve our product offering to clinics

as well as patients within the VA as they both have similar clinician and patient profile.

We have incurred net losses and negative cash

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

We will continue to evaluate spending while continuing

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

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

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

For information on the effects to our Company from the ongoing

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

Business—Evolving COVID-19 Pandemic.”

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 conditions.

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 movement.

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

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 this device.

Our principal markets are

the United States and Europe.

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

major countries.

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

We have in the past generated

and expect to generate in the future revenue from a combination of third-party payors (including private and government payors) and self-pay

While a broad uniform 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

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 date.

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.

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.

In February 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.

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.

are also 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.

Components of Our Statements of Operations

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

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

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

Our revenue is generated from a combination of

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

Payments for our products by third party

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

Third-party payors include, without limitation, private insurance

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

We expect that third-party

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

In December 2015, the VA issued a national policy for the evaluation, training and procurement of ReWalk Personal exoskeleton systems

for all qualifying veterans across the United States.

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

individuals who have suffered spinal cord injury.

All of our ReWalk Personal and ReWalk Rehabilitation systems are

We currently rely, and in the future will rely,

on sales and rentals of our ReWalk Personal and ReWalk Rehabilitation Exoskeleton devices, and sales of our ReStore exo-suit device, additional

Distributed Products such as the MyoCycle, and related extended service contracts for the SCI Products.

Our revenue is generated from

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

Payments for our products

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

Third-party payors include, without limitation, private

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

We expect that

third-party payors will be an increasingly important source of revenue in the future as we seek to clarify the Medicare coverage category

(i.e., benefit category) applicable for personal exoskeletons.

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.

ReWalk Personal and ReWalk Rehabilitation systems are generally

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

We offer customers the ability to

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

Both warranties cover all

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

The warranty covers all elements of

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

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

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

Cost of Revenues and Gross

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

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

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

Cost of revenues also includes

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

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

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

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

manufacturing costs.

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

Cost of Revenue and Gross

Cost of revenue consists primarily of systems purchased from our

outsourced manufacturer, Sanmina.

Cost of revenue also includes internal costs such as salaries and related personnel costs including

non-cash share-based compensation, manufacturing and inventory management, training and inspection, warranty and service activities, freight

costs, and reserves for excess and obsolete inventory, when necessary.

The cost of revenue also includes royalties and expenses related

to royalty-bearing research and development grants.

Our gross profit and gross margin (defined as gross profit as a

percentage of revenue) are influenced by a number of factors, including primarily the volume and price of our products sold, fluctuations

in the mix of products sold, and variability in our cost of revenue.

We expect gross profit and gross margin will expand in the future

as we increase our revenue volumes and realize operating efficiencies associated with greater scale which will reduce the cost of revenue

as a percentage of revenue.

Operating Expenses

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Research and development expenses, net consist primarily of salaries

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

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

development and research programs.

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

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

design and development, clinical studies, regulatory submissions, patent costs, sponsored research and other related activities.

all research and development expenses as they are incurred.

Research and development expenses are presented net of the amount

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Certain of those

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

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

We may receive additional funding

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Our sales and marketing expenses consist primarily of salaries

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

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

Also included in the sales and

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

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

travel, marketing, advertisement, tradeshows and conferences, lobbying, and public relations activities.

General and Administrative Expenses

Our general and administrative expenses consist primarily of salaries

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

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

services, and insurance.

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

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

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

of $20.0 million.

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

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

upon an additional drawdown of $8.0 million.

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

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

promissory note (the “Kreos Convertible Note”).

On November 20, 2018, we agreed to repay $3.6 million to Kreos in satisfaction

of all outstanding indebtedness under the Kreos Convertible Note and other related payments, including prepayment costs and end of loan

payments and Kreos agreed to terminate the Kreos Convertible Note.

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

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

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

offering price of $0.30 and $0.29, respectively, for an aggregate price of $3.6 million (including the aggregate exercise price for the

ordinary shares to be received upon exercise of the pre-funded warrants, assuming Kreos exercises all of the pre-funded warrants it purchased

as part of our public offering.

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

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

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

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

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

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

“Loan Agreement”) with Kreos Capital V (Expert Fund) Limited (“Kreos”) pursuant to which Kreos extended a line

of credit to us in the amount of $20.0 million.

In connection with the Loan Agreement, we issued to Kreos a warrant to purchase up to

4,771 of our ordinary shares at an exercise price of $241.00 as we drew down $12.0 million under the Loan Agreement, which amount was

increased to 6,679 ordinary shares upon an additional drawdown of $8.0 million.

On June 9, 2017, $3.0 million of the outstanding principal

amount was extended by an additional three years with the same interest rate and became subject to repayment in accordance with, and subject

to the terms of a secured convertible promissory note (the “Kreos Convertible Note”).

On November 20, 2018, we agreed to repay

$3.6 million to Kreos in satisfaction of all outstanding indebtedness under the Kreos Convertible Note and other related payments, including

prepayment costs and end of loan payments and Kreos agreed to terminate the Kreos Convertible Note.

We repaid Kreos the $3.6 million by

issuing to Kreos 192,000 units (each unit consisting of one ordinary share and one warrant to purchase one ordinary share) and 288,000

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

one ordinary share) at the a public offering price of $0.30 and $0.29, respectively, for an aggregate price of $3.6 million (including

the aggregate exercise price for the ordinary shares to be received upon exercise of the pre-funded warrants, assuming Kreos exercises

all of the pre-funded warrants it purchased as part of our public offering.

We and Kreos also agreed to revise the principal and the repayment

schedule under the Kreos Loan Agreement.

Additionally, we entered into the Kreos Warrant Amendment with Kreos, which amended the exercise

price of the warrant to purchase 6,679 ordinary shares currently held by Kreos from $241.00 to $7.50.

On December 29, 2020, we repaid

in full the remaining loan principal amount to Kreos including the end of loan payments, and by that discharged all of our obligations

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

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Taxes on Income

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

income in Israel.

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

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

tax purposes amounted to approximately $74 thousand.

After we utilize our net operating

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

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

will not extend beyond 2024.

As of December 31, 2022, we had not yet generated

taxable income in Israel.

As of that date, our net operating loss carry forwards for Israeli tax purposes amounted to approximately $220.9

After we utilize our net operating loss carryforwards, we are eligible for certain tax benefits in Israel under the Law for the

Encouragement of Capital Investments, 1959.

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

income in Israel provided that the benefit period will not extend beyond 2024.

Our taxable income generated outside of Israel will be subject

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Grants and Other Funding

Israel Innovation Authority (formerly known as

the Office of the Chief Scientist)

Israel Innovation Authority

(formerly known as the Office of the Chief Scientist)

From our inception through December 31, 2022, we have received

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

in consideration for an investment in our preferred shares.

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

IIA in the total amount of $99 thousand.

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

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

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

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

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

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

As of December 31, 2021, the aggregate contingent

liability to the IIA was $1.5 million.

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

Risk Factors-We have received Israeli government

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

The terms of those grants

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

cases or upon the sale of our company.”

a total of $2.3 million in funding from the IIA, $1.6 million of which are royalty-bearing grants, $400 thousand were received in consideration

for an investment in our preferred shares while $309 thousand was received without future obligation.

Of the royalty-bearing grants

received, we have paid royalties to the IIA in the total amount of $110 thousand.

The agreements with IIA require us to pay royalties

at a rate of 3% on sales of certain systems and related services up to the total amount of funding received for the development of these

systems, linked to the dollar, and bearing interest at an annual rate of LIBOR applicable to dollar deposits.

If we transfer IIA-supported

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

technology or know-how, the amount of IIA support, the time of completion of the IIA-supported research project and other factors.

of December 31, 2022, the aggregate contingent liability to the IIA was $1.6 million.

For more information, see “Part I, Item

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

additional grants in the future.

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

of Israel and we may be required to pay penalties in such cases or upon the sale of our company.”

Results of Operations

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to Year Ended December 31, 2021

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

Our revenue for 2022 and 2021 were as follows (dollars in thousands,

except unit amounts)

Years Ended December 31,

Personal unit revenues

Rehabilitation unit revenues

Personal unit revenues consist of ReWalk Personal 6.0 and Distributed

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

Rehabilitation unit revenues consist of ReStore, Distributed Products

Personal unit revenue

Rehabilitation unit revenue

Personal unit revenue consists of ReWalk Personal

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

Rehabilitation unit revenue consist of ReStore, Distributed Products

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

or for usage by medical academic centers.

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

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

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

Revenue was $5.5 million, a decrease of $0.5 million, or 8%, during

2022 as compared to 2021.

The decrease was driven primarily by lower rehabilitation units sold in the United States due to a one time

multiple-unit shipment to a medical academic center in 2021, partially offset by a higher number of distributed products units sold in

Additionally, we experienced an adverse impact to revenue from currency due to an erosion of the euro-dollar exchange rate.

In the future we expect our growth to be driven by sales of our

ReWalk Personal device to third-party payors as we continue to focus our resources on broader commercial coverage policies with third-party

payors as well as sales of the ReStore and other products to rehabilitation clinics and personal users.

ReWalk Personal device through expansion of coverage and reimbursement by commercial and government third-party payors, as well as sales

of Distributed Products and the ReStore device to rehabilitation clinics and personal users.

Our gross profit for 2022 and 2021 were as follows (in thousands):

Years Ended December 31,

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

Our gross profit declined because of

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

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

We expect our gross profit to improve, assuming we increase our

sales volumes, which could also decrease the product manufacturing costs.

Improvements may be partially offset by the lower margins we

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

as COVID-19 pandemic is affecting the market.

Gross profit was $1.9 million, or 35% of revenue,

for 2022, as compared to a gross profit of $2.9 million, or 49% of revenue for 2021.

Our gross profit declined because of a higher inventory

reserve of ReStore finished goods and raw materials due to the obsolescence of electronic components.

Gross profit decrease is also attributable

to a decreased volume of ReWalk Personal Exoskeleton sales, increase of production costs and freight expense.

We expect gross profit and gross margin will increase in the future

as we increase our revenue volumes and realize operating efficiencies associated with greater scale which will reduce the cost of revenue

as a percentage of revenue.

Improvements may be partially offset by the lower margins we currently expect from ReStore and our Distributed

Products as well as due to an increase in material costs.

Research and Development

Expenses, Net

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

Our research and development expense, net for 2022 and 2021 was

as follows (in thousands):

Years Ended December 31,

Research and development expenses, net

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

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

Research and development expense, net

Research and development expense was $4.0 million in 2022, an increase

of $1.1 million, or 37%, during 2022 as compared to 2021.

The increase is attributable to increased personnel and personnel related expenses

and subcontractors’ expenses primarily due to development projects offset partially with grant received from the IIA.

We intend to focus our research and development expenses mainly

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

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

on our current products maintenance and improvement as well as in support of the FDA submission for clearance of the stair walking capability

of the ReWalk 6.0 and in support of the FDA submission for clearance of the ReWalk 7.0 next generation model.

Sales and Marketing Expenses

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

Our sales and marketing expense for 2022 and 2021 was as follows

(in thousands):

Years Ended December 31,

Sales and marketing expenses

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

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

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

expense during 2021.

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

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

Sales and marketing expense

Sales and marketing expense was $9.8 million in

2022, an increase of $2.8 million, or 41%, during 2022 as compared to 2021.

The increase was driven by higher consulting expenses related

to CMS reimbursement progress, an increase in tradeshow and travel expenses since Covid-19 restrictions are being lifted and personnel

and personnel-related expenses.

In the near term our sales and marketing expense are expected to

be driven by our efforts expand the reimbursement coverage of our ReWalk Personal device and to support our current commercial product

General and Administrative

Our general and administrative expenses for 2021 and 2020 were

as follows (in thousands):

Our general and administrative expense for 2022 and 2021 was as

follows (in thousands):

Years Ended December 31,

General and administrative

General and administrative expenses increased by $646 thousand,

or 13%, during 2021 compared to 2020.

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

compensation expenses as well as professional services expenses.

General and administrative expense was $7.1 million, an increase

of $1.5 million, or 27%, during 2022 as compared to 2021.

The increase was mainly driven by increased professional services expenses related

to the 2022 proxy process, partially offset by a decrease in insurance costs.

Financial Expenses (income),

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

Our financial expense, net for 2022 and 2021 was as follows (in

Years Ended December 31,

Financial expenses (income), net

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

101% during 2021 compared to 2020.

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

was fully repaid in December 2020.

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

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

Financial expense (income), net

Financial expense (income), net, decreased by $13 thousand during

2022 as compared to 2021.

The decrease is mainly due to exchange rate fluctuations.

*) Represents an amount lower than $1.

Our income tax for 2022 and 2021 was as follows (in thousands):

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Taxes on income

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

to our subsidiary’s activity in Germany.

Income tax increased by $373 thousand during 2022 as compared to

2021 due to the application of a valuation allowance to our deferred tax assets.

Year Ended December 31, 2021 Compared to Year Ended December 31,

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of Financial Condition and Results of Operations” of our Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC

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

on February 24, 2022, which is available free of charge on the SEC's website at www.sec.gov and at www.rewalk.com, and is incorporated

by reference herein.

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judgments and assumptions that can affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities

at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.

We base our estimates,

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Revenue Recognition

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

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

Under the modified retrospective method, we recognized the cumulative

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

This adjustment did

not have a material impact on our consolidated financial statements.

Results for reporting periods beginning after January 1, 2018 are

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

under Revenue Recognition (“Topic 605”).

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

financial statement readers with enhanced revenue recognition disclosures.

In accordance with Topic 606, revenue is recognized when obligations

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

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

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

providing services.

Our revenue is recognized in accordance with ASC

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

generally, this occurs with the transfer of

control of our products or services.

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

for transferring products or providing services.

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

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

do not grant a right of return for our products.

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

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

For the majority of sales of Rehabilitation systems, we include

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

In accordance with ASC 606, we have concluded

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

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

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

recognition criteria have been met.

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

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

the distributor that have previously completed the ReWalk Training program.

generally does not grant a right of return for its products.

In rare circumstances the Company provides a right of return of its products.

In those cases, the Company records reductions to revenue for expected future product returns based on the Company’s historical

experience and estimates.

For the majority of sales of Rehabilitation systems,

we include insignificant training and consider the elements in the arrangement to be a single performance obligation.

In accordance

with ASC 606, we have concluded that the training is essential to the functionality of our systems.

Therefore, we recognize revenue for

the system and training only after delivery, in accordance with the agreement delivery terms, to the customer and after the training has

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

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

Personal or Rehabilitation systems to third party distributors, we do not provide training to the end user as this training is completed

by the rehabilitation centers or by the distributor that have previously completed the ReWalk Training program.

Warranties are classified as either assurance type or service type

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as intended for a limited period of time.

In the beginning of 2018, we updated our service policy to include

a five-year warranty compared to a period of two years that were included in the past for parts and services.

The first two years are

considered as assurance type warranty and the additional period is considered an extended service arrangement, which is a service type

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

A service type

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

Revenue is then recognized ratably over

the life of the warranty.

SCI Products include a five-year warranty.

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

which is a service type warranty.

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

A service type warranty is accounted as a separate performance obligation and revenue is recognized ratably over the life of

the warranty.

The ReStore device is sold with a two-year warranty

which is considered as assurance type warranty.

The Distributed Products are sold with assurance type warranty ranging

from between one year to ten years, depending on the specific product and part.

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

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Expected Volatility.

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

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

Industry peers consist of public

companies in the medical device and healthcare industries.

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

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

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

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

Expected volatility is calculated based on actual historical stock price movements over the most recent periods ending on the grant

date, equal to the expected term of the options, or based on certain peer companies that the Company considered to be comparable, in case

there is no sufficient trading volume to rely on market volatility.

Expected Term .

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Recently Issued and Adopted Accounting Pronouncements

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

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

A discussion of recent accounting pronouncements is included in

Note 2w, New Accounting Pronouncements to our consolidated financial statements in this annual report.

Liquidity and Capital Resources

Sources of Liquidity and

Since inception, we have

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

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

For the full year ended

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

$194.2 million.

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

The Company’s negative operating cash

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

The Company has sufficient funds to support its operation for more

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

We expect to incur future

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

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

we achieve profitability or generate positive cash flows, we will continue to need to raise additional cash.

We intend to fund future

operations through cash on hand, additional private and/or public offerings of debt or equity securities, cash exercises of outstanding

warrants or a combination of the foregoing.

In addition, we may seek additional capital through arrangements with strategic partners or

from other sources and we will continue to address our cost structure.

Notwithstanding, there can be no assurance that we will be able

to raise additional funds or achieve or sustain profitability or positive cash flows from operations.

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

defined below) as a potential source of ongoing liquidity.

However, in March 2020, Timwell notified us that it would not invest the second

and third tranches under the Investment Agreement.

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

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

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

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

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

and future generation designs for our spinal cord injury device;

(iii) routine product updates;

(iv) general corporate purposes, including

working capital needs;

and (v) potential acquisitions of business.

Our future cash requirements will depend on many factors,

including our rate of revenue growth, the expansion of our sales and marketing activities, the timing and extent of our spending on research

and development efforts and international expansion.

If our current estimates of revenue, expenses or capital or liquidity requirements

change or are inaccurate, we may seek to sell additional equity or debt securities, arrange for additional bank debt financing, or refinance

our indebtedness.

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

Loan Agreement with Kreos

and Related Warrant to Purchase Ordinary Shares

Sources of Liquidity and Outlook

Since inception, we have funded our operations primarily through

the sale of our equity securities and convertible notes to investors in private placements, the sale of our equity securities in public

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

For the full year ended December 31, 2022, the Company incurred

a consolidated net loss of $19.6 million and has an accumulated deficit in the total amount of $213.8 million.

Our cash and cash equivalent

on December 31, 2022, totaled $67.9 million.

The Company’s negative operating cash flow for the full year ended December 31, 2022,

was $17.9 million.

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

financial statements for the fiscal year ended December 31, 2022.

We expect to incur future net losses and our transition to profitability

is dependent upon, among other things, the successful development and commercialization of our products and product candidates, the achievement

of a level of revenue adequate to support our cost structure.

Until we achieve profitability or generate positive cash flows,

we will continue to need to raise additional cash.

We intend to fund future operations through cash on hand, additional private and/or

public offerings of debt or equity securities, cash exercises of outstanding warrants or a combination of the foregoing.

we may seek additional capital through arrangements with strategic partners or from other sources and we will continue to address our

cost structure.

Notwithstanding, there can be no assurance that we will be able to raise additional funds or achieve or sustain profitability

or positive cash flows from operations.

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

and promotion activities related to market development for our ReWalk Personal and ReWalk Rehabilitation Exoskeleton devices and

other product lines added through distribution agreements;

(ii) payor education activities to establish or broaden coverage by third-party

payors and CMS for our ReWalk Personal Exoskeleton device;

(iii) development of our lightweight exo-suit technology for potential home

personal health utilization for multiple indications and future generation designs for our exoskeleton device;

(iv) routine product updates;

(v) general corporate purposes, including working capital needs;

(vi) share repurchase programs;

and (vii) potential acquisitions of businesses.

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

activities, the timing and extent of our spending on research and development efforts and international expansion.

If our current estimates

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

arrange for additional bank debt financing, or refinance our indebtedness.

There can be no assurance that we will be able to raise such

funds on acceptable terms.

Loan Agreement with Kreos and Related Warrant to Purchase Ordinary

Loan Agreement

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

Warrant to Purchase Ordinary Shares

Purchase Ordinary Shares

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

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

we were subject to limitations under the applicable rules of Form S-3, which constrained our ability to secure capital pursuant to our

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

These rules limit the size of primary securities offerings

conducted by issuers with a public float of less than $75 million to no more than one-third of their public float in any 12-month period.

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

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

Likewise, because our public

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

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

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

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

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

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

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

If our public float subsequently drops

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

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

These limitations do not apply to secondary

offerings for the resale of our ordinary shares or other securities by selling shareholders or to the issuance of ordinary shares upon

conversion by holders of convertible securities, such as warrants.

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

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

we were subject to limitations under the applicable rules of Form S-3, which constrained our ability to secure capital with respect to

public offerings pursuant to our effective Form S-3.

These rules limit the size of primary securities offerings conducted by issuers with

a public float of less than $75 million to no more than one-third of their public float in any 12-month period.

At the time of filing

our annual report for the year ended December 31, 2022, on February 23, 2023, we were subject to these limitations, because our public

float did not reach at least $75 million in the 60 days preceding the filing of this annual report.

We will continue to be subject to

these limitations for the remainder of the 2023 fiscal year and until the earlier of such time as our public float reaches at least $75

million or when we file our next annual report for the year ended December 31, 2023, at which time we will be required to re-test our

status under these rules.

If our public float is below $75 million as of the filing of our next annual report on Form 10-K, or at the

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

These limitations do not apply to secondary offerings for the resale of our ordinary shares or other securities by selling shareholders

or to the issuance of ordinary shares upon conversion by holders of convertible securities, such as warrants.

We have registered up to

$100 million of ordinary shares warrants and/or debt securities and certain other outstanding securities with registration rights on our

registration statement on Form S-3, which was declared effective by the SEC in May 2022.

Equity Offerings and

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

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

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

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

8, 2020 until June 8, 2026.

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

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

Wainwright as compensation

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

On December 3, 2020, the Company entered into a

private placement with certain institutional investors for the issuance and sale of 5,579,776 ordinary shares, par value NIS 0.25 per

share, at $1.43375 per ordinary shares and warrants to purchase up to 4,184,832 ordinary shares with exercise price of $1.34 per share,

exercisable from December 8, 2020 until June 8, 2026.

Additionally, the Company issued warrants to purchase up to 334,787 ordinary shares,

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

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

On February 19, 2021, the Company entered into a purchase agreement

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

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

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

of approximately $13.8 million.

ATM Offering Program

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

with Piper Jaffray, as amended on May 9, 2019, pursuant to which we may offer and sell, from time to time, ordinary shares having an aggregate

offering price of up to $25.0 million through Piper Jaffray acting as our agent.

Subject to the terms and conditions of the Equity Distribution

Agreement, Piper Jaffray will use its commercially reasonable efforts to sell on our behalf all of the ordinary shares requested to be

sold by us, consistent with its normal trading and sales practices.

Piper Jaffray may also act as principal in the sale of ordinary shares

under the Equity Distribution Agreement.

Such sales may be made under our Form S-3 in what may be deemed “at-the-market” equity

offerings as defined in Rule 415 promulgated under the Securities Act, directly on or through the Nasdaq Capital Market, to or through

a market maker other than on an exchange or otherwise, in negotiated transactions at market prices prevailing at the time of sale or at

prices related to such prevailing market prices, and/or any other method permitted by law, including in privately negotiated transactions.

Piper Jaffray is entitled to compensation at a fixed commission

rate of 3% of the gross sales price per share sold through it as agent under the Equity Distribution Agreement.

Where Piper Jaffray acts

as principal in the sale of ordinary shares under the Equity Distribution Agreement, such rate of compensation will not apply, but in

no event will the total compensation of Piper Jaffray, when combined with the reimbursement of Piper Jaffray for the out-of-pocket fees

and disbursements of its legal counsel, exceed 8.0% of the gross proceeds received from the sale of the ordinary shares.

We may instruct Piper Jaffray not to sell ordinary shares if the

sales cannot be effected at or above the price designated by us in any instruction.

We or Piper Jaffray may suspend an offering of ordinary

shares under the ATM Offering Program upon proper notice and subject to other conditions, as further described in the Equity Distribution

Additionally, the ATM Offering Program will terminate on the earlier of (i) the sale of all ordinary shares subject to the

Equity Distribution Agreement, (ii) the date that is three years after a new registration statement on Form S-3 goes effective, (iii)

our becoming ineligible to use Form S-3 and (iv) termination of the Equity Distribution Agreement by the parties.

The Equity Distribution

Agreement may be terminated by Piper Jaffray or us at any time on the close of business on the date of receipt of written notice, and

by Piper Jaffray at any time in certain circumstances, including any suspension or limitation on the trading of our ordinary shares on

the Nasdaq Capital Market, as further described in the Equity Distribution Agreement.

We temporarily suspended use of the ATM Offering

Program on February 20, 2019 to facilitate our February 2019 “best efforts” public offering.

As of September 30, 2020,

we had sold 302,092 ordinary shares under the ATM Offering Program for net proceeds to us of $14.5 million (after commissions, fees, and

Additionally, as of that date, we had paid Piper Jaffray compensation of $471 thousand and had incurred total expenses (including

such commissions) of approximately $1.2 million in connection with the ATM Offering Program.

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

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

Under our September 2021 purchase

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

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

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

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

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

Such limitations may inhibit our ability to access capital efficiently.

Timwell Private Placement

On March 6, 2018, we entered into an investment agreement with

Timwell Corporation Limited, a Hong Kong corporation (“Timwell”), as amended on May 15, 2018 (the “Investment Agreement”),

pursuant to which we agreed, in return for aggregate gross proceeds to us of $20 million, to issue to Timwell an aggregate of 640,000

of our ordinary shares, at a price per share of $1.25.

The Investment Agreement contemplates issuances in three tranches, including $5

million for 160,000 shares in the first tranche, $10 million for 320,000 shares in the second tranche and $5 million for 160,000 shares

in the third tranche.

The first tranche, consisting of $5 million for 160,000 shares, closed

on May 15, 2018.

The net aggregate proceeds after deducting commissions, fees and offering expenses in the amount of approximately $705

thousand were approximately $4.3 million.

The closings of the Second Tranche and Third Tranche were subject

to specified closing conditions, including the formation of a joint venture, the signing of a license agreement and a supply agreement,

and the successful production of certain ReWalk products.

The Third Tranche Closing was to have occurred by December 31, 2018 and no later

than April 1, 2019.

We believe that Timwell committed various material breaches of the Investment Agreement, including failure to consummate

its second and third investment tranches in the Company for a total of $15 million, failure to enter into a detailed joint venture with

the Company, and failure to make payments for product-related commitments.

Nevertheless, until March 2020 we continued to engage in a

dialogue with Timwell (and its affiliate RealCan) on alternative pathways to allow us to commercialize our products in China through RealCan

and its affiliates, and also provide for RealCan or an affiliate to invest in us.

In late March 2020, Timwell notified us that it would not invest

the second and third tranches under the Investment Agreement.

In response, in early April 2020, our Board of Directors also removed Timwell’s

designee, who was appointed pursuant to the Investment Agreement, from the Board of Directors, due to this breach pursuant to the terms

of the Investment Agreement.

We continue to view China as a market with key opportunities for products designed for stroke patients, and

therefore we continue to evaluate potential relationships with other groups to penetrate the Chinese market.

As of December 31, 2022, we received a total of 9,814,754 outstanding

warrants exercises with exercise prices ranging from $1.25 to $1.79 were exercised, for total gross proceeds of approximately $13.8 million.

During the twelve months that ended December 31, 2022, no warrants were exercised.

Share Repurchase Program

In June 2022, we announced that our Board approved a program to

repurchase up to $8.0 million of our ordinary shares, par value NIS 0.25 per share, subject to receipt of Israeli court approval.

2022, we announced that we had received approval from an Israeli court for the share repurchase program, valid through January 20, 2023.

On December 19, 2022, our board of directors approved the extension

of our on-going share repurchase program, with such extension to be in the aggregate amount of up to $5.8 million.

The extension was approved

by an Israeli court on February 9, 2023, and will expire on the earlier of August 9, 2023, or reaching the additional $5.8 million of

repurchases of our ordinary shares .

Under the program, share repurchases may be made from time to time

using a variety of methods, including open market transactions or in privately negotiated transactions.

Such repurchases will be made

in accordance with all applicable securities laws and regulations, including restrictions relating to volume, price and timing under applicable

law, including Rule 10b-18 under the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”).

and amount of shares repurchased will be determined by our management, within guidelines to be established by the Board or a committee

thereof, based on its ongoing evaluation of our capital needs, market conditions, the trading price of our ordinary shares, trading volume

and other factors, subject to applicable law.

For all or a portion of the authorized repurchase amount, we may enter into a plan compliant

with Rule 10b5-1 under the Exchange Act that is designed to facilitate these repurchases.

The repurchase program does not require us to acquire a specific

number of shares and may be suspended or discontinued at any time.

There can be no assurance as to the timing or number of shares of any

repurchases in the future, and any such share repurchases will be funded from available working capital.

As of December 31, 2022, we have

repurchased approximately 2.9 million of our ordinary shares at an aggregate amount of $2.6 million under the repurchase program.

Years Ended December 31,

Net cash used in operating activities

Net cash provided by used in investing activities

Net cash provided by financing activities

Net cash used in investing activities

Net cash (used in) provided by financing activities

Effect of Exchange rate changes on Cash, Cash Equivalents and Restricted Cash

Net cash flow

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Net Cash Used in Operating Activities

Net cash used in operating activities decreased by $1.1 million

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

debt under the Loan Agreement in full in December 2020.

Net cash used in operating activities was $17.9 million in 2022,

an increase of $6.4 million as compared to 2021 mainly due to lower revenue collection, higher consulting, professional services expenses

and personnel and personnel related expenses.

Net Cash Used in Investing Activities

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

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

Net cash used in investing activities decreased to $25 thousand

in 2022 as compared to $47 thousand in 2021, primarily as a result of decreased use of cash for the purchase of property and equipment.

Net Cash Provided by Financing Activities

We generated $79.5 million from financing activities in 2021 compared

to $16.7 million in 2020.

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

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

repaying our debt in full in December 2020.

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

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

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

Management's Discussion and Analysis of Financial Condition and

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

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

Net cash (used in) provided by financing activities

was a cash use of $2.5 million in 2022, a decrease of $82 million, as compared to cash provided of $79.5 million in 2021.

was a result of a share repurchase plan that was initiated in the second half of 2022, while in 2021 the source of cash consisted primarily

of proceeds from the issuance of common stock and warrants, as well as the exercise of warrants issued in prior years.

Year Ended December 31, 2021 Compared to Year

Ended December 31, 2020

A discussion of changes in our cash flows in 2021 compared to 2020

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

Management's Discussion and Analysis of Financial

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

24, 2022, which is available free of charge on the SECs website at www.sec.gov and at www.rewalk.com, and is incorporated by reference

Obligations and Commercial Commitments

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Operating lease obligations (3)

The Company depends on one contract manufacturer, Sanmina Corporation, for both the ReStore products and

the SCI Products.

We place our manufacturing orders with Sanmina pursuant to purchase orders or by providing forecasts for future requirements

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

has a remaining term of 0.25 years, it requires us to pay in quarterly installments for the funding of our joint research collaboration

The Company depends on one contract manufacturer, Sanmina Corporation, for both the ReStore products and the SCI Products.

our manufacturing orders with Sanmina pursuant to purchase orders or by providing forecasts for future requirements.

Our Collaboration Agreement with Harvard was originally for a term of five years, commencing in May 2016,

and was subsequently amended in April 2018 to extend the term by one additional year.

The Collaboration Agreement concluded as of March

Under the Collaboration Agreement, we were required to pay in quarterly installments the funding of our joint research collaboration

with Harvard, subject to a minimum funding commitment under applicable circumstances.

Our License Agreement consists of patent reimbursement

expenses payments and of a license upfront fee payment.

There are also several milestone payments contingent upon the achievement of certain

product development and commercialization milestones and royalty payments on net sales from certain patents licensed to Harvard.

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

There are commercialization milestones which depend on us reaching

certain sales amounts some or all of which may not occur.

Our License Agreement with Harvard consists of patent

reimbursement expenses payments and a license upfront fee payment.

There are also several milestone payments contingent upon the achievement

of certain product development and commercialization milestones and royalty payments on net sales from certain patents licensed to Harvard.

All product development milestones contemplated by the License Agreement have been met as of December 31, 2022;

however, there are still

outstanding commercialization milestones under the License Agreement that depend on us reaching certain sales amounts, some or all of

which may not occur.

Our operating leases consist of leases for our facilities and motor vehicles.

10 unchanged sentences

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 7. Management’s Discussion and Analysis