Lifeward Ltd. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Disclosure Controls and Procedures We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required financial disclosure. As of the end of the period covered by this annual report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon, and as of the date of, this evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that our disclosure controls and procedures were effective such that the information required to be disclosed by us in our SEC reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. 71 Management’s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Our internal control over financial reporting includes those policies and procedures that: ● pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; ● provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and ● provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our financial statements. Management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2023. In making its assessment, management used the criteria described in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. We have excluded from the scope of our assessment of internal control over financial reporting the operations and related assets of AlterG, which we acquired on August 11, 2023. Based on management’s assessment, management has concluded that our internal control over financial reporting was effective as of December 31, 2023 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external reporting purposes in accordance with U.S. GAAP. This annual report does not include an attestation report of our independent registered public accounting firm regarding internal controls over financial reporting because we are exempt from this requirement as a smaller reporting company and non-accelerated filer. Changes in Internal Control over Financial Reporting During the fourth quarter of the fiscal year ended December 31, 2023, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION Not applicable ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable 72 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Information About Our Executive Officers The following table sets forth the name, age and position of each of our executive officers as of February 27, 2024: Name Age Position Larry Jasinski 66 Chief Executive Officer and Director Michael Lawless 56 Chief Financial Officer Charles Remsberg 62 Chief Sales Officer Jeannine Lynch 59 Vice President of Market Access Almog Adar 40 Vice President of Finance Larry Jasinski has served as our Chief Executive Officer and as a member of our board since February 2012. From 2005 until 2012, Mr. Jasinski served as the President and Chief Executive Officer of Soteira, Inc., a company engaged in development and commercialization of products used to treat individuals with vertebral compression fractures, which was acquired by Globus Medical in 2012. From 2001 to 2005, Mr. Jasinski was President and Chief Executive Officer of Cortek, Inc., a company that developed next-generation treatments for degenerative disc disease, which was acquired by Alphatec in 2005. From 1985 until 2001, Mr. Jasinski served in multiple sales, research and development, and general management roles at Boston Scientific Corporation. Mr. Jasinski has served on the board of directors of Massachusetts Bay Lines since 2015 and of LeMaitre Vascular, Inc. since 2003. Mr. Jasinski holds a B.Sc. in marketing from Providence College and an MBA from the University of Bridgeport. Michael Lawless has served as our Chief Financial Officer since September 2022. Prior to Lifeward, Mr. Lawless served as a CFO consultant for Danforth Advisors, LLC, a provider of financial consulting services to the life sciences industry. From 2015 to 2020, Mr. Lawless held several financial leadership positions including Division CFO at Azenta, Inc. (formerly Brooks Automation, Inc.), a worldwide provider of management solutions for biological samples. Previously, Mr. Lawless also held financial leadership roles for AECOM Technology, Inc., PerkinElmer, Inc., Momenta Pharmaceuticals, Inc. and CTI Molecular Imaging, Inc. Mr. Lawless has a Bachelor of Arts degree in Economics from Swarthmore College, a Master of Business Administration degree from the Tuck School of Business at Dartmouth College and is a Certified Public Accountant. Charles Remsberg has served as our Chief Sales Officer since August 2023. Prior to Lifeward, Mr. Remsberg served as CEO of AlterG from March 2017 until the acquisition of AlterG in August 2023. An industry veteran of over 30 years, Charles has been responsible for bringing innovative rehabilitation technology to physical therapy, neuro-rehabilitation, sports medicine, and wellness customers. Prior to serving at AlterG, Mr. Remsberg served in both executive and commercial leadership roles for Tibion (for which he served as the CEO from December 2009 to April 2013, when it was acquired by AlterG), Hocoma (for which he served as the U.S. CEO and Global Head of Sales from September 2003 to November 2009), and Biodex Medical Systems (for which he served as the Head of Worldwide Sales from January 1997 to October 2002). He holds an AS in Business Administration from Suffolk County Community College. Jeannine Lynch has served as our Vice President of Market Access and Strategy since August 2021. Prior to Lifeward, Ms. Lynch served as Senior Director of Patient Access Services at BioMarin Pharmaceuticals from April 2009 to September 2021. In addition to her work with BioMarin, Ms. Lynch has worked for industry leaders such as Genentech and Pfizer/Agouron. She has held leadership roles in commercial management, product launches and built customized patient services to address several different rare and ultrarare medical conditions. Ms. Lynch also sits on the Board of Directors for MVP, a non-profit organization to help young people of color prepare, perform, progress, and prosper in their education, leadership and early professional careers. Ms. Lynch is a graduate of the University of California Berkeley and holds a Master of Public Health from the University of Michigan. Almog Adar has served as our Vice President of Finance since December 2022. From 2020 to 2022, Mr. Adar served as our Director of Finance and Corporate Financial Controller. Prior to Lifeward, Mr. Adar served as Controller of Infinya Recycling Ltd. (previously Amnir Recycling) from January 2018 until December 2019. From January 2016 until December 2017, Mr. Adar served as Assistant Controller of Delta Galil Industries. Mr. Adar has a Bachelor of Arts degree in Accounting and Economics from the Open University of Israel and is a Certified Public Accountant licensed by the Israeli Ministry of Justice. 73 The remaining information required by this Item will be included in, and is incorporated herein by reference from, our definitive proxy statement for our 2024 Annual Meeting of Shareholders to be filed with the SEC pursuant to Regulation 14A within 120 days after the end of our fiscal year ended December 31, 2023 (the “Proxy Statement”). ITEM 11. EXECUTIVE COMPENSATION The information required by this Item 11 will be included in, and is incorporated herein by reference from, our Proxy Statement. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by this Item 12 will be included in and is incorporated herein by reference from, our Proxy Statement. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by this Item 13 will be included in and is incorporated herein by reference, from our Proxy Statement. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this Item 14 will be included in and is incorporated herein by reference, from our Proxy Statement. 74 PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES (a)(1) Financial Statements. The Consolidated Financial Statements filed as part of this annual report are identified in the Index to Consolidated Financial Statements on page F-1 hereto. (a)(2) Financial Statement Schedules. Financial Statement Schedules have been omitted because the information required to be set forth therein is not applicable or is shown in the financial statements or notes thereto. (a)(3) Exhibits. See accompanying Exhibit Index included after the signature page of this report for a list of the exhibits filed or furnished with or incorporated by reference in this report. EXHIBIT INDEX 2.1 Agreement and Plan of Merger, dated as of August 8, 2023, by and among ReWalk Robotics, Inc., Atlas Merger Sub, Inc., AlterG Inc. and Shareholder Representative Services LLC (incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K filed with the SEC on August 9, 2023). + 3.1 Fourth Amended and Restated Articles of Association of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 21, 2021). 4.1 Specimen share certificate (incorporated by reference to Exhibit 4.1 to the Company’s registration statement on Form F-1/A (File No. 333-197344), filed with the SEC on August 20, 2014). 4.2 Description of the registrant’s securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 4.2 to the Company’s Annual Report on Form 10-K filed with the SEC on February 24, 2022). 4.3 Warrant, dated December 30, 2015, between the Company and Kreos Capital V (Expert Fund) Limited (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on January 4, 2016). 4.4 First Amendment to Warrant to Purchase Shares between the Company and Kreos Capital V (Expert Fund) Limited, dated November 20, 2018 (incorporated by reference to Exhibit 4.1 to the Company’s current report on Form 8-K filed with the SEC on November 21, 2018). 4.5 Form of placement agent warrant from February 2019 “best efforts” public offering (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed with the SEC on February 25, 2019). 4.6 Form of purchaser warrant from April 2019 registered direct offering and concurrent private placement of warrants (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed with the SEC on April 5, 2019). 4.7 Form of placement agent warrant from April 2019 registered direct offering and concurrent private placement of warrants (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K filed with the SEC on April 5, 2019). 4.8 Form of private placement warrant from June 2019 private placement of warrants (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed with the SEC on June 11, 2019). 4.9 Form of placement agent warrant from June 2019 private placement of warrants (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K filed with the SEC on June 11, 2019). 4.10 Form of purchaser warrant from June 2019 registered direct offering and concurrent private placement of warrants (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed with the SEC on June 12, 2019). 4.11 Form of placement agent warrant from June 2019 registered direct offering and concurrent private placement of warrants (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K filed with the SEC on June 12, 2019). 4.12 Form of common warrant from February 2020 best efforts offering (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed with the SEC on February 10, 2020). 4.13 Form of placement agent warrant from February 2020 best efforts offering (incorporated by reference to Exhibit 4.3 of the Company’s Current Report on Form 8-K filed with the SEC on February 10, 2020). 75 4.14 Form of purchaser warrant from July 2020 registered direct offering (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed on July 6, 2020). 4.15 Form of placement agent agreement from July 2020 registered direct offering (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K filed on July 6, 2020). 4.16 Form of purchaser warrant from December 2020 private placement (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed with the SEC on December 8, 2020). 4.17 Form of placement agent warrant from December 2020 private placement (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K filed with the SEC on December 8, 2020). 4.18 Form of purchaser warrant from February 2021 private placement (incorporated by reference to Exhibit of the Company’s Current Report on Form 8-K filed with the SEC on February 25, 2021). 4.19 Form of placement agent warrant from February 2021 private placement (incorporated by reference to Exhibit of the Company’s Current Report on Form 8-K filed with the SEC on February 25, 2021). 4.20 Form of ordinary warrant from September 2021 private placement (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed with the SEC on September 29, 2021). 4.21 Form of placement agent warrant from September 2021 private placement (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K filed with the SEC on September 29, 2021). 4.22 Form of pre-funded warrant from September 2021 private placement (incorporated by reference to Exhibit 4.3 of the Company’s Current Report on Form 8-K filed with the SEC on September 29, 2021). 10.1 Letter of Agreement, dated July 11, 2013, between the Company and Sanmina Corporation (incorporated by reference to Exhibit 10.1 to the Company’s Annual Report on Form 10-K filed with the SEC on February 18, 2021).* 10.2 License Agreement, dated May 16, 2016, between the Company and the President and Fellows of Harvard College (incorporated by reference to Exhibit 10.8 to the Company’s Annual Report on Form 10-K filed with the SEC on February 18, 2021).* 10.3 Form of indemnification agreement between the Company and each of its directors and executive officers (incorporated by reference to Exhibit 10.11 to the Company’s registration statement on Form F-1/A (File No. 333-197344), filed with the SEC on August 20, 2014).** 10.4 2014 Incentive Compensation Plan, as amended (incorporated by reference to Exhibit 99.1 to the Company’s registration statement on Form S-8 (File No. 333-239258), filed with the SEC on June 18, 2020).** 10.5 Executive Employment Agreement, dated as of January 17, 2011, between the Company and Larry Jasinski (incorporated by reference to Exhibit 10.16 to the Company’s Annual Report on Form 10-K filed with the SEC on February 29, 2016, as amended on May 6, 2016).** 10.6 2014 Incentive Compensation Plan Form of Option Award Agreement for employees and executives (incorporated by reference to Exhibit 10.18 to the Company’s Annual Report on Form 10-K filed with the SEC on February 29, 2016, as amended on May 6, 2016).** 10.7 2014 Incentive Compensation Plan Form of Restricted Share Unit Award Agreement for non-Israeli employees, and executives (incorporated by reference to Exhibit 10.19 to the Company’s Annual Report on Form 10-K filed with the SEC on February 29, 2016, as amended on May 6, 2016).** 10.8 2014 Incentive Compensation Plan Form of Restricted Share Unit Award Agreement for Israeli non-employee directors, employees and executives (incorporated by reference to Exhibit 10.20.1 to the Company’s registration statement on Form S-1 (File No. 333-227852), filed with the SEC on October 15, 2018).** 10.9 2014 Incentive Compensation Plan Form of Restricted Share Unit Award Agreement between the Company and Jeffrey Dykan, as director (incorporated by reference to Exhibit 10.20.2 to the Company’s registration statement on Form S-1 (File No. 333-227852), filed with the SEC on October 15, 2018).** 10.10 2014 Incentive Compensation Plan Prior Form of Restricted Share Unit Award Agreement for non-Israeli non-employee directors (incorporated by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K filed with the SEC on February 29, 2016, as amended on May 6, 2016).** 10.11 2014 Incentive Compensation Plan New Form of Restricted Share Unit Award Agreement for non-Israeli non-employee directors (incorporated by reference to Exhibit 10.22 to the Company’s registration statement on Form S-1 (File No. 333-227852), filed with the SEC on October 15, 2018).** 10.12 2014 Incentive Compensation Plan Prior Form of Option Award Agreement for Israeli non-employee directors (incorporated by reference to Exhibit 10.21 to the Company’s Annual Report on Form 10-K filed with the SEC on February 17, 2017, as amended on April 27, 2017).** 76 10.13 2014 Incentive Compensation Plan Prior Form of Option Award Agreement for non-Israeli non-employee directors (incorporated by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K filed with the SEC on February 17, 2017, as amended on April 27, 2017).** 10.14 Amendment No. 1 to the Exclusive License Agreement and Amendment No. 2 to the Research Collaboration Agreement, dated April 1, 2018, between the Company and the President and Fellows of Harvard College (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on June 29, 2018).* 10.15 Form of warrant exercise agreement from June 2019 private placement of warrants (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on June 11, 2019). 10.16 Employment Agreement, dated July 9, 2021, by and between the Company and Jeannine Lynch (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 10, 2021**. 10.17 Employment Agreement dated December 10, 2019, by and between the Company and Almog Adar (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 13, 2022).* ** 10.18 Amendment No. 1 to Employment Agreement, dated May 4, 2023, by and between the Company and Almog Adar (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly report on Form 10-Q filed with the SEC on August 11, 2023).** 10.19 Employment Agreement, dated September 2, 2022, by and between the Company and Michael A. Lawless (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly report on Form 10-Q filed with the SEC on November 7, 2022).* ** 10.20 Consulting Agreement, dated as of January 1, 2023), by and between the Company and Richner Consultants LLC (incorporated by reference to Appendix A to the Company’s Definitive Proxy Statement on Schedule 14A filed with the SEC on August 9, 2023).** 10.21 ReWalk Robotics Ltd. Compensation Policy for Executive Officers and Non-Executive Directors (incorporated by reference to Appendix B to the Company’s Definitive Proxy Statement on Schedule 14A filed with the SEC on August 9, 2023).** 10.22 Employment Agreement, dated as of August 11, 2023, by and between the Company and Charles Remsberg (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly report on Form 10-Q filed with the SEC on November 14, 2023).** 10.23 Form of Restricted Share Unit Award (Inducement Award) for non-Israeli employees and executives (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly report on Form 10-Q filed with the SEC on November 14, 2023).** 21.1 List of subsidiaries of the Company.*** 23.1 Consent of Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global Limited. 31.1 Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act 2002. 31.2 Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act 2002. 32.1 Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*** 32.2 Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*** 97.1 Compensation Recovery Policy (incorporated by reference to Annex A to the ReWalk Robotics Ltd. Compensation Policy for Executive Officers and Non-Executive Directors filed herewith as Exhibit 10.21). 101.INS XBRL Instance Document. 101.SCH XBRL Taxonomy Extension Schema Document. 101.PRE XBRL Taxonomy Presentation Linkbase Document. 101.CAL XBRL Taxonomy Calculation Linkbase Document. 101.LAB XBRL Taxonomy Label Linkbase Document. 101.DEF XBRL Taxonomy Extension Definition Linkbase Document. + Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. * Certain identified information in the exhibit has been omitted because it is the type of information that (i) the Company customarily and actually treats as private and confidential, and (ii) is not material. ** Management contract or compensatory plan, contract or arrangement. *** Furnished herewith. ITEM 16. FORM 10-K SUMMARY Not applicable. 77 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ReWalk Robotics Ltd. By: /s/ Larry Jasinski Name: Larry Jasinski Title: Chief Executive Officer Date: February 27, 2024 78 POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENT: That the undersigned officers and directors of ReWalk Robotics Ltd. do hereby constitute and appoint Larry Jasinski and Mike Lawless the lawful attorney and agent with power and authority to do any and all acts and things and to execute any and all instruments which said attorney and agent determines may be necessary or advisable or required to enable ReWalk Robotics Ltd. to comply with the Securities and Exchange Act of 1934, as amended, and any rules or regulations or requirements of the Securities and Exchange Commission in connection with this report. Without limiting the generality of the foregoing power and authority, the powers granted include the power and authority to sign the names of the undersigned officers and directors in the capacities indicated below to this report or amendments or supplements thereto, and each of the undersigned hereby ratifies and confirms all that said attorneys and agents, or either of them, shall do or cause to be done by virtue hereof. This Power of Attorney may be signed in several counterparts. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Larry Jasinski Director and Chief Executive Officer February 27, 2024 Larry Jasinski (Principal Executive Officer) /s/ Mike Lawless Chief Financial Officer February 27, 2024 Mike Lawless (Principal Financial Officer) /s/ Almog Adar Vice President of Finance February 27, 2024 Almog Adar (Principal Accounting Officer) /s/ Jeff Dykan Chairman of the Board February 27, 2024 Jeff Dykan /s/ Dr. John William Poduska Director February 27, 2024 Dr. John William Poduska /s/ Randel Richner Director February 27, 2024 Randel Richner /s/ Joseph Turk Director February 27, 2024 Joseph Turk /s/ Hadar Levy Director February 27, 2024 Hadar Levy 79 PART IV REWALK ROBOTICS LTD CONSOLIDATED FINANCIAL STATEMENTS U.S. DOLLARS IN THOUSANDS INDEX Page Report of Registered Public Accounting Firm F -2 (PCAOB ID 1281 ) Consolidated Balance Sheets F -4 Consolidated Statements of Operations F -6 Statements of Changes in Shareholders’ Equity F -7 Consolidated Statements of Cash Flows F -8 Notes to Consolidated Financial Statements F -10 Kost Forer Gabbay & Kasierer Menachem Begin 144, Tel-Aviv 6492102, Israel Tel: +972-3-6232525 Fax: +972-2-5622555 ey.com REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of REWALK ROBOTICS LTD. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Rewalk Robotics Ltd. and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations, changes is shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. F - 2 Revenue recognition Description of the Matter As described in Note 2 to the consolidated financial statements, the Company generates revenues from sales of its medical devices. Revenue is recognized when obligations under the terms of a contract with the Company's customers are satisfied. Revenue is measured as the amount of consideration to which the Company expects to be entitled in exchange for transferring products or providing services. In addition, the Company provides a service type warranty which is accounted for as a separate performance obligation. Revenue is recognized ratably over the life of the warranty. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis. The Company does not sell the service type warranty of its SCI products on a standalone basis. Auditing the Company’s evaluation of the allocation of the transaction price to the distinct performance obligations was challenging due to the effort and assumptions required to evaluate the standalone selling price of the SCI products service type warranty. The assumptions used in determining the standalone selling price of the service type warranty included costs allocation, inflation rates and expected margins. How We Addressed the Matter in Our Audit To test the management’s determination of standalone selling prices of the SCI products service type warranty, our audit procedures included, among others, evaluating the methodology applied and testing the calculations as well as the completeness and accuracy of the underlying data including the costs allocation, inflation rates and expected margins used by the Company in its estimates. We also evaluated the Company’s disclosures included in notes to the consolidated financial statements. Business Combinations – Valuation Description of the Matter As discussed in Notes 2 and 5 to the consolidated financial statements, the Company completed an acquisition of AlterG Inc. during 2023 for consideration of $22.1 million. The Company accounted for this acquisition as a business combination. The acquisition resulted in the recognition of intangible assets amounting to $14.1 million, which consisted of technology, customer relationship, trademark assets and backlog of $6.1 million, $6.9 million, $0.8 million and $0.3 million respectively. Auditing the Company’s estimation of the fair value of the acquired intangible assets was complex due to the estimation and uncertainty in the Company’s determination of the fair value of acquired identifiable intangible assets. The estimation uncertainty for the acquired intangible assets was primarily due to the underlying assumptions about the future performance of the acquired business, which were utilized in determining the fair value of the acquired intangible assets. The significant assumptions used by management included discount rates and certain assumptions that form the basis of the forecasted results, including revenue growth rates. These significant assumptions were forward-looking and could be affected by future economic and market conditions. How We Addressed the Matter in Our Audit To test the estimated fair value of the acquired intangible assets, our audit procedures included, among others, assessing the fair value methodology used by the Company and testing the significant assumptions and the underlying data used by the Company in its analyses. We also performed sensitivity analyses over the significant assumptions used to evaluate the change in the fair value resulting from changes in the assumptions. Additionally, we tested the completeness and accuracy of the underlying data used in the valuation. We involved our valuation specialists to assist us in our evaluation of the Company’s valuation model, related assumptions and output of the valuation model. KOST FORER GABBAY & KASIERER A Member of EY Global We have served as the Company’s auditor since 2014. Tel-Aviv, Israel February 27, 2024 F - 3 REWALK ROBOTICS LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands December 31, 2023 2022 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 28,083 $ 67,896 Trade receivable, net of credit losses of $ 328 and $ 26 , respectively 3,120 1,036 Prepaid expenses and other current assets 2,366 649 Inventories 5,653 2,929 Total current assets 39,222 72,510 LONG-TERM ASSETS Restricted cash and other long-term assets 784 694 Operating lease right-of-use assets 1,861 836 Property and equipment, net 1,262 196 Intangible assets 12,525 - Goodwill 7,538 - Total long-term assets 23,970 1,726 Total assets $ 63,192 $ 74,236 The accompanying notes are an integral part of these consolidated financial statements. F - 4 REWALK ROBOTICS LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands (except share and per share data) December 31, 2023 2022 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES: Trade payables $ 5,069 $ 1,950 Employees and payroll accruals 2,034 1,282 Deferred revenue 1,504 301 Current maturities of operating leases liability 1,296 564 Earnout liability 576 - Other current liabilities 1,316 685 Total current liabilities 11,795 4,782 LONG-TERM LIABILITIES Earnout liability 2,716 - Deferred revenues 1,506 890 Non-current operating leases liability 607 333 Other long-term liabilities 58 66 Total long-term liabilities 4,887 1,289 Total liabilities 16,682 6,071 COMMITMENTS AND CONTINGENT LIABILITIES Shareholders’ equity: Share capital Ordinary share of NIS 0.25 par value-Authorized: 120,000,000 shares at December 31, 2023 and December 31, 2022; Issued: 64,132,706 and 63,023,506 shares at December 31, 2023 and December 31, 2022, respectively; Outstanding: 60,110,099 and 60,090,298 shares as of December 31, 2023 and December 31, 2022 respectively 4,487 4,489 Additional paid-in capital 281,109 279,857 Treasury Shares at cost, 4,022,607 and 2,933,208 ordinary shares at December 31, 2023 and December 31, 2022, respectively ( 3,203 ) ( 2,431 ) Accumulated deficit ( 235,883 ) ( 213,750 ) Total shareholders’ equity 46,510 68,165 Total liabilities and shareholders’ equity $ 63,192 $ 74,236 The accompanying notes are an integral part of these consolidated financial statements. F - 5 REWALK ROBOTICS LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS U.S. dollars in thousands (except share and per share data) Year ended December 31, 2023 2022 2021 Revenue $ 13,854 $ 5,511 $ 5,966 Cost of revenue 9,401 3,606 3,063 Gross profit 4,453 1,905 2,903 Operating expenses: Research and development, net 4,148 4,031 2,939 Sales and marketing 13,922 9,842 6,993 General and administrative 9,995 7,134 5,626 Total operating expenses 28,065 21,007 15,558 Operating loss ( 23,612 ) ( 19,102 ) ( 12,655 ) Financial income, net 1,467 * ) 13 Loss before income taxes ( 22,145 ) ( 19,102 ) ( 12,642 ) Taxes on income (benefit) ( 12 ) 467 94 Net loss $ ( 22,133 ) $ ( 19,569 ) $ ( 12,736 ) Net loss per ordinary share, basic and diluted $ ( 0.37 ) $ ( 0.31 ) $ ( 0.27 ) Weighted average number of shares used in computing net loss per ordinary share, basic and diluted 59,719,064 62,378,797 47,935,652 The accompanying notes are an integral part of these consolidated financial statements. *) Represents an amount lower than $1. F - 6 REWALK ROBOTICS LTD. AND SUBSIDIARIES STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY U.S. dollars in thousands (except share data) Ordinary Share Additional paid-in Treasury Accumulated Total shareholders’ Number Amount capital Shares deficit equity Balance as of December 31, 2020 25,332,225 1,827 201,392 - ( 181,445 ) 21,774 Share-based compensation to employees and non-employees - - 833 - - 833 Issuance of ordinary shares upon vesting of RSUs by employees and non-employees 398,164 31 ( 31 ) - - - Issuance of ordinary shares in a “Best Efforts” offering, net of issuance expenses in the amount of $ 3,679 (1) 10,921,502 832 35,489 - - 36,321 Exercise of pre-funded warrants and warrants (1)(2) 10,425,258 772 14,288 - - 15,060 Issuance of ordinary shares in a “registered direct” offering, net of issuance expenses in the amount of $ 3,215 (1) 15,403,014 1,199 26,932 - - 28,131 Net loss - - - - ( 12,736 ) ( 12,736 ) Balance as of December 31, 2021 62,480,163 4,661 278,903 ( 194,181 ) 89,383 Share-based compensation to employees and non-employees - - 993 - - 993 Issuance of ordinary shares upon vesting of RSUs by employees and non-employees 543,343 39 ( 39 ) - - - Treasury shares at cost ( 2,933,208 ) ( 211 ) - ( 2,431 ) - ( 2,642 ) Net loss - - - - ( 19,569 ) ( 19,569 ) Balance as of December 31, 2022 60,090,298 $ 4,489 $ 279,857 $ ( 2,431 ) $ ( 213,750 ) $ 68,165 Share-based compensation to employees and non-employees - - 1,328 - - 1,328 Issuance of ordinary shares upon vesting of RSUs by employees and non-employees 1,109,200 76 ( 76 ) - - - Treasury shares at cost ( 1,089,399 ) ( 78 ) - ( 772 ) - ( 850 ) Net loss - - - - ( 22,133 ) ( 22,133 ) Balance as of December 31, 2023 60,110,099 4,487 281,109 ( 3,203 ) ( 235,883 ) 46,510 (1) See Note 9a. (2) See Note 9f. The accompanying notes are an integral part of these consolidated financial statements. F - 7 REWALK ROBOTICS LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS U.S. dollars in thousands Year ended December 31, 2023 2022 2021 Cash flows used in operating activities: Net loss $ ( 22,133 ) $ ( 19,569 ) $ ( 12,736 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 239 202 266 Amortization of intangible assets 1,608 - - Share-based compensation 1,328 993 833 Deferred taxes - 316 ( 29 ) Remeasurement of earnout liability ( 315 ) - - Interest income ( 11 ) - - Exchange rate fluctuations ( 45 ) 79 - Changes in assets and liabilities: Trade receivables, net ( 311 ) ( 408 ) 99 Prepaid expenses, operating lease right-of-use assets and other assets ( 531 ) 94 592 Inventories ( 277 ) ( 117 ) 432 Trade payables 1,037 566 ( 884 ) Employees and payroll accruals ( 14 ) 140 275 Deferred revenues ( 269 ) ( 34 ) 74 Operating lease liabilities and other liabilities ( 973 ) ( 153 ) ( 391 ) Net cash used in operating activities ( 20,667 ) ( 17,891 ) ( 11,469 ) Cash flows used in investing activities: Acquisition of a business, net of cash acquired ( 18,068 ) - - Purchase of property and equipment ( 81 ) ( 25 ) ( 47 ) Net cash used in investing activities ( 18,149 ) ( 25 ) ( 47 ) Cash flows from financing activities: Issuance of ordinary shares in a private placement, net of issuance expenses paid in the amount of $ 3,679 (1) - - 36,321 Issuance of ordinary shares in a “registered direct” offering, net of issuance expenses in the amount of $ 3,215 (1) - - 28,131 Exercise of pre-funded warrants and warrants (1)(2) - - 15,060 Purchase of treasury shares ( 992 ) ( 2,500 ) - Net cash (used in) provided by financing activities ( 992 ) ( 2,500 ) 79,512 Effect of Exchange rate changes on Cash, Cash Equivalents and Restricted Cash 45 ( 79 ) - Increase (decrease) in cash, cash equivalents, and restricted cash ( 39,763 ) ( 20,495 ) 67,996 Cash, cash equivalents, and restricted cash at beginning of period 68,555 89,050 21,054 Cash, cash equivalents, and restricted cash at end of period $ 28,792 $ 68,555 $ 89,050 (1) See Note 9a. (2) See Note 9f. The accompanying notes are an integral part of these consolidated financial statements. F - 8 REWALK ROBOTICS LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS U.S. dollars in thousands Year ended December 31, 2023 2022 2021 Supplemental disclosures of non-cash flow information Classification of other current assets to property and equipment, net $ - $ 22 $ 34 Classification of inventory to property and equipment $ 481 $ 67 $ 32 Amounts related to shares re-purchase not yet paid $ - $ 142 $ - ROU assets obtained from new lease liabilities $ 513 $ - $ - Supplemental disclosures of cash flow information: Cash paid for income taxes $ 126 $ 113 $ 40 Cash received from interest $ 1,341 - - Reconciliation of cash, cash equivalents and restricted cash as shown in the consolidated statements of cash flows Cash and cash equivalents $ 28,083 $ 67,896 $ 88,337 Restricted cash included in other long-term assets $ 709 $ 659 $ 713 Total Cash, cash equivalents, and restricted cash $ 28,792 $ 68,555 $ 89,050 (1) See Note 9a. (2) See Note 9f. The accompanying notes are an integral part of these consolidated financial statements. F - 9 REWALK ROBOTICS LTD. AND SUBSIDIARIES Notes to Consolidated Financial Statements U.S. dollars in thousands NOTE 1:- GENERAL a. ReWalk Robotics Ltd. (“RRL”, and together with its subsidiaries, the “Company”) was incorporated under the laws of the State of Israel on June 20, 2001 and commenced operations on the same date. b. RRL has three wholly-owned (directly and indirectly) subsidiaries: (i) ReWalk Robotics, Inc. (“RRI”) incorporated under the laws of Delaware on February 15, 2012, (ii) ReWalk Robotics GMBH (“RRG”) incorporated under the laws of Germany on January 14, 2013, and (iii) AlterG, Inc. (“AlterG”) incorporated in Delaware on October 21, 2004 under the name of Gravus, Inc. On June 30, 2005, the Company re-incorporated in Delaware and changed its name to AlterG, Inc. in September 2005. c. The Company is 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 physical and neurological conditions. The Company’s initial product offerings were the ReWalk Personal and ReWalk Rehabilitation Exoskeleton devices for individuals with spinal cord injury (collectively, the “SCI Products”). These devices are robotic exoskeletons that are designed for individuals with paraplegia that use the Company’s patented tilt-sensor technology and an on-board 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. The Company has sought to expand the product offerings beyond the SCI Products through internal development and distribution agreements. The Company has developed its ReStore Exo-Suit device, which it 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 disability due to stroke. During the second quarter of 2020, the Company signed two separate agreements to distribute additional product lines in the United States. The Company is the exclusive distributor of the MYOLYN MyoCycle FES Pro cycles to United States (“U.S.”) rehabilitation clinics and for the MyoCycle Home cycles available to US veterans through VA hospitals. In the second quarter of 2020, the Company 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, the Company terminated this agreement as of January 31, 2023. We refer to the MediTouch and MyoCycle devices as the Company’s “Distributed Products.” On August 11, 2023, pursuant to an Agreement and Plan of Merger among RRI, AlterG, Atlas Merger Sub, Inc., a wholly owned subsidiary of RRI (“Merger Sub”), and Shareholder Representative Services LLC, dated August 11, 2023, RRI acquired AlterG and AlterG became a wholly owned subsidiary of the Company. For accounting purposes, RRI was considered the acquirer and AlterG was considered the acquiree. The acquisition was accounted for using the acquisition method of accounting. See Note 5 for additional information. The Company made its first acquisition to supplement its internal growth when it acquired AlterG, a leading provider of AlterG Anti-Gravity systems for use in physical and neurological rehabilitation. The Company paid a cash purchase price of $19.0 million at closing and additional cash earnouts may be paid based upon a percentage of AlterG’s year-over-year revenue growth over the two years following the closing. The AlterG Anti-Gravity systems use patented, NASA-derived Differential Air Pressure (“DAP”) technology to reduce the effects of gravity and allow people to rehabilitate with finely calibrated support and reduced pain. The Company will continue to evaluate other products for distribution or acquisition that can broaden its product offerings further to help individuals with physical and neurological injury and disability. The Company markets and sells its products directly to institutions and individuals and through third-party distributors. The Company sells its products directly primarily in the United States, through a combination of direct sales and distributors (depending on the product line) in Germany, Canada, and Australia, and primarily through distributors in other markets. In its direct markets, the Company has established relationships with clinics and rehabilitation centers, professional and college sports teams, and individuals and organizations in the spinal cord injury community, and in its indirect markets, the Company’s distributors maintain these relationships. RRI and AlterG market and sell products mainly in the United States. RRG markets and sells the Company’s products mainly in Germany and Europe. F - 10 d. The Company depends on one contract manufacturer to manufacture the ReWalk and the ReStore products in its portfolio, Sanmina. Reliance on this vendor makes the Company vulnerable to possible capacity constraints and reduces control over component availability, delivery schedules, manufacturing yields and costs. e. For the full year ended December 31, 2023 the Company incurred a consolidated net loss of $ 22.1 million and has an accumulated deficit in the total amount of $ 235.9 million. The Company’s negative operating cash flow for the full year ended December 31, 2023 was $ 20.7 million. Our cash and cash equivalent on December 31, 2023 totalled $ 28.1 million. The Company has sufficient funds to support its operation for more than 12 months following the approval of its consolidated financial statements for the fiscal year ended December 31, 2023. The Company expects to incur future net losses and the transition to profitability is dependent upon, among other things, the successful development and commercialization of the Company’s products and product candidates, the establishment of contracts for the distribution of new product lines, or the acquisition of additional product lines, any of which, or in combination, would contribute to the achievement of a level of revenue adequate to support the cost structure. Until the Company achieves profitability or generates positive cash flows, it will continue to need to raise additional cash. The Company intends to fund future operations through existing 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, the Company may seek additional capital through arrangements with strategic partners or from other sources and will continue to address its cost structure. Notwithstanding, there can be no assurance that the Company will be able to raise additional funds or achieve or sustain profitability or positive cash flows from operations. NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), applied on a consistent basis, as follows: a. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments, and assumptions. The Company’s management believes that the estimates, judgments, and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, the Company’s management evaluates estimates, including those related to inventories, fair values of share-based awards, contingent liabilities, provision for warranty, allowance for credit losses and sales return reserve. Such estimates are based on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. b. Financial Statements in U.S. Dollars: The functional currency is the currency that best reflects the economic environment in which the Company and its subsidiaries operate and conduct their transactions. Most of the Company’s revenues and costs are incurred in U.S. dollar. In addition, the Company’s financing activities are incurred in U.S. dollars. The Company’s management believes that the dollar is the primary currency of the economic environment in which the Company and each of its subsidiaries operate. Thus, the dollar is the Company’s and its subsidiary's functional and reporting currency. Accordingly, monetary accounts maintained in currencies other than the U.S. dollar are remeasured into U.S. dollars in accordance with ASC 830 “Foreign Currency Matters.” All transaction gains and losses of the remeasured monetary balance sheet items are reflected in the consolidated statements of operations as financing income or expenses as appropriate. F - 11 c. Principles of Consolidation: The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany balances have been eliminated upon consolidation. d. Cash Equivalents: Cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less, at the date acquired. e. Inventories: Inventories are stated at the lower of cost or net realizable value. Inventory reserves are provided to cover risks arising from slow-moving items or technological obsolescence. The Company periodically evaluates the quantities on hand relative to historical, current, and projected sales volume. Based on this evaluation, an impairment charge is recorded when required to write-down inventory to its net realized value. Cost is determined as follows: Finished products - based on raw materials and manufacturing costs on an average basis. Raw materials - The weighted average cost method. The Company regularly evaluates the ability to realize the value of inventory based on a combination of factors, including historical usage rates and forecasted sales according to outstanding backlogs. Purchasing requirements and alternative usage are explored within these processes to mitigate inventory exposure. When recorded, the reserves are intended to reduce the carrying value of inventory to its net realizable value. If actual demand for the Company’s products deteriorates, or market conditions are less favourable than those projected, additional inventory reserves may be required. f. Property and Equipment: Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets at the following annual rates: % Computer equipment 20 - 33 (mainly 33) Office furniture and equipment 6 - 10 (mainly 10) Machinery and laboratory equipment 15 Field service units 20 - 50 Leasehold improvements Over the shorter of the lease term or estimated useful life g. Business Combinations The Company accounts for business combinations in accordance with ASC 805, “Business Combinations” (“ASC 805”). For business combinations accounted for under the acquisition method, ASC 805 requires recognition of assets acquired, liabilities assumed, and any non-controlling interest at the acquisition date, measured at their fair values as of that date. The Company determines the recognition of intangible assets based on the following criteria: (i) the intangible asset arises from contractual or other rights; or (ii) the intangible asset is separable or divisible from the acquired entity and capable of being sold, transferred, licensed, returned or exchanged. The excess of the fair value of the purchase price over the fair values of the identifiable assets and liabilities is recorded as goodwill. Determining the fair value of the identifiable assets and liabilities requires management to use significant judgment and estimates including the forecasted revenue and revenues growth rates, discount rates, customer contract renewal rates and customer attrition rates. The process of estimating the fair values requires significant estimates, especially with respect to intangible assets. Management’s determination of fair value of assets acquired and liabilities assumed at the acquisition date is based on the best information available in the circumstances and incorporates management’s own assumptions and involves a significant degree of judgment. Acquisition related costs include legal fees, consulting and success fees, and other non-recurring integration related costs. Acquisition-related costs are expensed as incurred. F - 12 h. Goodwill and Other Intangibles For business combinations, the purchase prices are allocated to the tangible assets and intangible assets acquired and liabilities assumed based on their estimated fair values on the acquisition dates, with the remaining unallocated purchase prices recorded as goodwill. The Company has no indefinite-lived intangible assets other than goodwill. Acquired identifiable finite-lived intangible assets include identifiable acquired technology, customer relationships, trademarks and backlog and are amortized on a straight-line basis over the estimated useful lives of the assets. The Company routinely reviews the remaining estimated useful lives of finite-lived intangible assets. Goodwill is not amortized and is tested for impairment at least annually. The Company operates as one reporting unit and the fair value of the reporting unit is estimated using quoted market prices of the Company’s stock in active markets. The Company tests goodwill for impairment annually in the fourth quarter and whenever events or changes in circumstances indicate the carrying amount of goodwill may not be recoverable. When testing goodwill for impairment, the Company may first perform a qualitative assessment. If the Company determines it is not more likely than not the reporting unit’s fair value is less than its carrying value, then no further analysis is necessary. If the Company determines that it is more likely than not that the fair value of its reporting unit is less than its carrying amount, then the quantitative impairment test will be performed. The Company may elect to bypass the qualitative assessment and proceed directly to performing a quantitative analysis. Under the quantitative impairment test, if the carrying amount of the Company’s reporting unit exceeds its fair value, the Company recognizes an impairment of goodwill for the amount of this excess. As of December 31, 2023, no impairments of goodwill have been recognized. i. Impairment of Long-Lived Assets The Company’s long-lived assets, including right-of-use (“ROU”) assets and identifiable intangible assets that are subject to amortization, are reviewed for impairment in accordance with ASC 360, “Property, Plant and Equipment” whenever events or changes in circumstances indicate that the carrying amount of an asset (or asset group) may not be recoverable. Recoverability of assets (or asset group) to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the years ended December 31, 2023, 2022 and 2021, no impairment losses have been recorded. j. Restricted cash and Other long-term assets: Other long-term assets include long-term prepaid expenses and restricted cash deposits for offices and cars leasing based upon the term of the remaining restrictions. k. Treasury shares The Company repurchased its ordinary shares and holds them as treasury shares. The Company presents the cost to repurchase treasury shares as a reduction of shareholders' equity. F - 13 l. Revenue Recognition: The Company generates revenues from sales of products. The Company sells its products directly to end customers and through distributors. The Company sells its products to clinics and rehabilitation centres, professional and college sports teams, private individuals (who finance the purchases by themselves, through fundraising or reimbursement coverage from insurance companies), and distributors. The Company recognizes revenue in accordance with ASC 606, “Revenue Recognition” when, or as, control of the promised good or service is transferred to the customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company applies the following five steps: 1. Identify the contract with a customer The Company generally considers a purchase order or a signed quote to be a contract with a customer. In evaluating the contract with a customer, the Company analyzes the customer’s intent and ability to pay the amount of promised consideration (credit risk) and considers the probability of collecting substantially all of the consideration. 2. Identify the performance obligations in the contract At a contract’s inception, the Company assesses the goods or services promised in a contract with a customer and identifies the performance obligations. 3. Determine the transaction price The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring products or services to the customer. The Company does not offer extended payment terms beyond one year to customers. 4. Allocate the transaction price to performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis. 5. Recognize revenue when or as the Company satisfies a performance obligation Revenue is recognized when or as performance obligations are satisfied by transferring control of a promised good or service to a customer. Control either transfers over time or at a point in time, which affects when revenue is recorded. The Company has elected to apply the practical expedient for financing component for transactions in which the difference between the payment date and the revenue recognition timing is up to 12 months. Disaggregation of Revenue (in thousands): Year Ended December 31, 2023 2022 2021 Product $ 10,681 $ 4,175 $ 4,916 Rental 1,033 859 533 Service and warranty 2,140 477 517 Total Revenues $ 13,854 $ 5,511 $ 5,966 Product revenue Revenue from Products is comprised of sale of Anti-Gravity products, sale of systems products to rehabilitation facilities and sale of ReWalk Personal Exoskeleton systems to end users. Revenues generated from the sale of Products are recognized at a point in time, once the customer has obtained the legal title to the items purchased. For systems sold to rehabilitation facilities, the Company includes insignificant training and considers the elements in the arrangement to be a single performance obligation. Therefore, the Company recognizes revenue for the system only when control is transferred after delivery and when the training has been completed, in accordance with the agreements terms with the customer. F - 14 For sales of ReWalk Personal Exoskeleton systems to end users, and for sales of ReWalk Personal or ReWalk Rehabilitation Exoskeleton systems to third party distributors, the Company does not provide training to the end user as this training is completed by the rehabilitation center or by the distributor that have previously completed the ReWalk Training program. Therefore, the Company recognizes revenue in such sales upon delivery. The Company generally does not grant a right of return for its products. In rare circumstances when the Company provides a right of return for its products. the Company records reductions to revenue for expected future product returns based on the Company’s historical experience and estimates. During 2023, the Company offered six products: (1) ReWalk Personal Exoskeletons, (2) ReWalk Rehabilitation Exoskeleton, (3) ReStore, (4) AlterG Anti-Gravity systems, (5) MyoCycle and (6) MediTouch. Due to unsatisfactory sales performance of the MediTouch product lines, the Company terminated this agreement as of January 31, 2023. Rental revenue Rental revenue for the AlterG Anti-Gravity systems is accounted for under ASC Topic 842, Leases. The Company rents its products to customers for a fixed monthly fee over the rental term, which typically ranges from 2 to 3 years. Rental revenues are recorded as earned on a monthly basis. See Note 2x for additional information. For the SCI Products, the Company also offers a rent-to-purchase model in which the Company recognizes revenue ratably according to the agreed rental monthly fee for a limited period prior to selling its products. Service and warranties The Company services its products after expiration of the initial warranty. Service revenue, consisting of time and materials to perform the repairs, is recorded as services are rendered. Determining the transaction price requires of level judgment, which is discussed by revenue category in further detail below. Warranties are classified as either an assurance type or a service type warranty. A warranty is considered an assurance type warranty if it provides the customer with assurance that the product will function as intended for a limited period of time. An assurance type warranty is not accounted for as a separate performance obligation under the revenue model. SCI Products include a five -year warranty . The 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 expired. 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 between three years to ten years, depending on the specific product and part. F or AlterG Anti-Gravity Products, the Company offers customers extended warranty contracts that extend or enhance the technical support, parts, and labor coverage offered as part of the base warranty included with the Anti-Gravity system products. Extended warranty revenue is recognized ratably over the extended warranty coverage period. The Company offers a one-year assurance type warranty to customers in the U.S. and two years assurance type warranty for spare parts only to its international distributors. For these products, the Company determines standalone selling price based on the price at which the performance obligation is sold separately. F - 15 Contract balances (in thousands): December 31, December 31, 2023 2022 Trade receivable, net of credit losses (1) $ 3,120 $ 1,036 Deferred revenues (1) (2) $ 3,010 $ 1,191 (1) Balance presented net of unrecognized revenue that was not yet collected. (2) $ 435 thousands of the December 31, 2022 deferred revenue balance was recognized as revenue during the year ended December 31, 2023. Deferred revenue which represent a contract liability, include unearned amounts related to service type warranty obligations as well as other advances and payments which the Company received from customers prior to satisfying the performance obligation, for which revenue has not yet been recognized. The Company's unearned performance obligations as of December 31, 2023 and the estimated revenue expected to be recognized in the future related to the service type warranty amounts to $3.1 million, which will be fulfilled over one to five years. m. Accounting for Share-Based Compensation: The Company accounts for share-based compensation in accordance with ASC 718, “Compensation-Stock Compensation” (“ASC 718”). ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an Option-Pricing Model (“OPM”). The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company’s consolidated statements of operations. The Company recognizes compensation expenses for the value of its awards granted based on the straight-line method over the requisite service period of each of the awards. The Company account for forfeitures as they occur. The Company selected the Black-Scholes-Merton option pricing model as the most appropriate fair value method for its share-option awards. The option-pricing model requires a number of assumptions, of which the most significant are the fair market value of the underlying ordinary share, expected share price volatility and the expected option term. 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. The expected option term is determined based on the simplified method, as adequate historical experience is not available to provide a reasonable estimate. The simplified method will continue to apply until enough historical experience is available to provide a reasonable estimate of the expected term. The risk-free interest rate is based on the yield from U.S. treasury bonds with an equivalent term. The Company has historically not paid dividends and has no foreseeable plans to pay dividends. The fair value of Restricted Stock Units (“RSUs”) granted is determined based on the price of the Company’s ordinary shares on the date of grant. The Company accounts for options granted to consultants and other service providers under ASC 718. The fair value of these options was estimated using a Black-Scholes-Merton option-pricing model. n. Warrants to Acquire Ordinary Shares: During the twelve -month ended December 31, 2021, the Company issued warrants to acquire up to 15,083,611 ordinary shares. There were no issued warrants during the twelve months ended December 31, 2023 and 2022. The Company assessed the warrants pursuant to ASC 480 "Distinguishing Liabilities from Equity" and ASC 815 "Derivatives and Hedging" and determined that the warrants should be accounted for as equity and not as a derivative liability. Refer to Note 9f for additional information. o. Research and Development Costs: Research and development costs are charged to the consolidated statement of operations as incurred and are presented net of the amount of any grants the Company received for research and development in the period in which the grant was received. F - 16 p. Income Taxes The Company accounts for income taxes in accordance with ASC 740, “Income Taxes” (“ASC 740”), using the liability method whereby deferred tax assets and liability account balances are determined based on the differences between financial reporting and the tax basis for assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to the amounts that are more likely-than-not to be realized. ASC 740 contains a two-step approach to recognizing and measuring a liability for uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company accrues interest and penalties related to unrecognized tax benefits in its taxes on income. As of December 31, 2023, and 2022, the Company did not identify any significant uncertain tax positions. q. Warranty provision: For assurance-type warranty, the Company records a provision for the estimated cost to repair or replace products under warranty at the time of sale. Factors that affect the Company’s warranty reserve include the number of units sold, historical and anticipated rates of warranty repairs and the cost per repair. US Dollars in thousands Balance at December 31, 2022 $ 92 AlterG acquisition – see note 5 535 Provision 200 Usage ( 479 ) Balance at December 31, 2023 $ 348 r. Concentrations of Credit Risks: Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents and trade receivables. The Company’s cash and cash equivalents are deposited in major banks in Israel, the United States and Germany. Such deposits in the United States may be in excess of insured limits and are not insured in other jurisdictions. The Company maintains cash and cash equivalents with diverse financial institutions and monitors the amount of credit exposure to each financial institution. The bank deposits are held in financial institutions which management believes are institutions with high credit standing, and accordingly, minimal credit risk from geographic or credit concentration exists with respect to these deposits. The below table reflects the concentration of credit risk for the Company’s current customers as of December 31, 2023, to which substantial sales were made. Concentration of credit risk with respect to trade receivable is primarily limited to a customer to which the Company makes substantial sales. December 31, 2023 2022 Customer A * )% 27 % Customer B * )% 13 % Customer C - 13 % Customer D - 11 % *) Less than 10% F - 17 The allowance for credit losses is based on the Company's assessments of factors that may affect a customer's ability to pay. The Company regularly reviews the adequacy of the allowance for credit losses based on a combination of factors, including an assessment of the current customer's aging balance, the nature and size of the customer, the financial condition of the customer, and the amount of any receivables in dispute. The Company does not have any off-balance sheet credit exposure related to its customers. As of December 31, 2023, and 2022 trade receivables are presented net of $ 328 thousand and $ 26 thousand allowance for credit losses, respectively. s. Accrued Severance Pay: Pursuant to Israel’s Severance Pay Law, Israeli employees are entitled to severance pay equal to one month’s salary for each year of employment, or a portion thereof. All of the employees of the RRL elected to be included under section 14 of the Severance Pay Law, 1963 (“section 14”). According to this section, these employees are entitled only to monthly deposits, at a rate of 8.33 % of their monthly salary, made in their name with insurance companies. Payments in accordance with section 14 release the Company from any future severance payments (under the above Israeli Severance Pay Law) in respect of those employees; therefore, related assets and liabilities are not presented in the balance sheet. Total Company’s expenses related to severance pay amounted to $ 114 thousand , $ 113 thousand and $ 104 thousand for the years ended December 31, 2023, 2022 and 2021, respectively. t. Fair Value Measurements: Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company uses a three -tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs when determining fair value. If a financial instrument uses inputs that fall in different levels of the hierarchy, the instrument will be categorized based upon the lowest level of input that is significant to the fair value calculation. The three -tiers are defined as follows: ▪ Level 1. Observable inputs based on unadjusted quoted prices in active markets for identical assets or liabilities; ▪ Level 2. Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and ▪ Level 3. Unobservable inputs for which there is little or no market data requiring the Company to develop its own assumptions. The carrying amounts of cash and cash equivalents, short term deposits, trade receivables and trade payables approximate their fair value due to the short-term maturity of such instruments. The following tables present information about the Company’s financial assets and liabilities that are measured in fair value on a recurring basis as of December 31, 2023 and December 31, 2022 (in thousands): Fair value measurements as of Description Fair Value Hierarchy December 31, 2023 December 31, 2022 Financial assets: Money market funds included in cash and cash equivalent Level 1 $ 2,550 $ - Treasury bills included in cash and cash equivalent Level 1 $ 2,525 $ - Total Assets Measured at Fair Value $ 5,075 $ - Financial Liabilities: Earnout Level 3 $ 3,292 $ - Total liabilities measured at fair value $ 3,292 $ - F - 18 The Company classifies cash equivalents within Level 1, because the Company uses quoted market prices or alternative pricing sources and models utilizing market observable inputs to determine their fair values. The earnout was valued using a Monte Carlo simulation analysis, which is considered to be a Level 3 fair value measurement. The following table summarizes the earnout liability activity as of December 31, 2023 (in thousands): Earnout Initial Measurement (August 11, 2023) $ 3,607 Change in fair value ( 315 ) Balance December 31, 2023 $ 3,292 u. Basic and Diluted Net Loss Per Share: Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of ordinary shares outstanding during the period. Diluted loss per share is computed based on the weighted average number of ordinary shares outstanding during the period, plus dilutive potential shares considered outstanding during the period. v. Contingent liabilities The Company accounts for its contingent liabilities in accordance with ASC 450, “Contingencies.” A provision is recorded when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. With respect to legal matters, provisions are reviewed and adjusted to reflect the impact of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. w. Government grants Royalty and non-royalty-bearing grants from the Israeli Innovation Authority (the “IIA”) of the Ministry of Economy and Industry in Israel for funding of approved research and development projects are recognized at the time the Company is entitled to such grants, on the basis of the costs incurred, and are presented as a reduction from research and development expenses (see Note 8c). F - 19 x. Leases At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Operating lease liabilities and their corresponding right-of-use assets are recorded at commencement date based on the present value of lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes its incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for items, such as initial direct costs paid or incentives received. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Lessor accounting - Operating leases A portion of the AlterG rental revenues for the AlterG Anti-Gravity systems are made through lease arrangements. AlterG products are available for lease agreements ranging from 12 to 42 months. If the customer terminates the contract during the lease period, they are required to pay a cancellation fee. The lease period may be extended by an additional period as specified in the contract. In determining the leases classification as a sales type or operating lease, the Company assesses, among other criteria: (i) the lease term to determine if it is for the major part of the economic life of the underlying equipment; and (ii) the present value of the lease payments to determine if they are equal to or greater than substantially all of the fair market value of the equipment at the inception of the lease AlterG Anti-Gravity systems. When these criteria are not met, the lease accounted for as operating leases and revenues are recognized over the term of the lease. Under these arrangements, when the Company acts as the lessor for its product line, the Company accounted for the lease arrangements as operating leases in accordance with ASC 842, “Lease” (“ASC 842”). The total rental revenue for the AlterG Anti-Gravity Products has amounted to $ 249 thousand from the time of acquisition through December 31, 2023. y. New Accounting Pronouncements Recently Implemented Accounting Pronouncements i. Financial Instruments In June 2016, FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in the more timely recognition of losses. The Company adopted ASU 2016-13 as of January 1, 2023. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted i. In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes - Improvements to Income Tax Disclosures” requiring enhancements and further transparency to certain income tax disclosures, most notably the tax rate reconciliation and income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024 on a prospective basis and retrospective application is permitted. The Company is currently evaluating the impact of the adoption of this standard. ii. In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280, “Segment Reporting” on an interim and annual basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2023-07. F - 20 NOTE 3:- PREPAID EXPENSES AND OTHER CURRENT ASSETS The components of prepaid expenses and other current assets are as follows (in thousands): December 31, 2023 2022 Government institutions $ 253 $ 81 Prepaid expenses 1,227 242 Advances to vendors 139 174 Other assets 747 152 $ 2,366 $ 649 NOTE 4:- INVENTORIES The components of inventories are as follows (in thousands): December 31, 2023 2022 Finished products $ 3,157 $ 2,421 Raw materials 2,496 508 $ 5,653 $ 2,929 During the twelve months ended December 31, 2023, 2022, and 2021, the Company recognized, at cost of revenues, reserves for excess and obsolete in the amount of $ 398 thousand, $ 502 thousand, and $ 252 thousand, respectively. F - 21 NOTE 5:- BUSINESS COMBINATION On August 11, 2023, pursuant to an Agreement and Plan of Merger among RRI, AlterG, Merger Sub, and Shareholder Representative Services LLC, RRI, August 8, 2023, the Company acquired AlterG and AlterG became a wholly owned subsidiary of the Company. AlterG develops, manufactures, and markets Anti-Gravity systems for use in physical and neurological rehabilitation and athletic training, both in the United States and internationally. The aggregate purchase price was a total of $ 19.0 million in cash, subject to working capital and other customary purchase price adjustments. Additional cash earnouts may be paid based upon a percentage of AlterG’s year-over-year future revenue growth over the next two years subject to working capital and other customary purchase price adjustments. The total consideration transferred is as follows (in thousands): Cash $ 18,493 Earnout payments $ 3,607 Total consideration $ 22,100 Earnout payments The Company will pay an amount of cash equal to 65% of the amount, if any, by which AlterG revenue attributable to the first 12 months period exceeds revenue target ("first earnout payment"), and an amount in cash equal to 65% of the amount, if any, by which AlterG revenue attributable to the following 12 months period exceeds the revenue from the first 12 month period ("second earnout payment"). At the date of acquisition, management estimated fair value of the earnout payment based on the actual up to date performance of the acquired entity and the probability of the earn out payment occurrence to be at approximately $ 3.6 million. The Earn-out was accounted for as a liability and will be remeasured at each reporting period through the consolidated statement of operations. The Company has accounted for the AlterG acquisition as a business combination. The Company has preliminarily allocated the purchase price of approximately $ 22.1 million fair values, and the excess of the purchase price over the aggregate fair values is recorded as goodwill. The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date (in thousands): Cash and cash equivalent $ 478 Restricted cash 51 Accounts receivable 1,773 Inventory 3,330 Prepaid expenses and other current assets 470 Right of use asset 1,151 Property and equipment, net 827 Other non-current assets 30 Goodwill 7,538 Intangible assets 14,133 Accounts payable ( 2,082 ) Accrued compensation ( 766 ) Other accrued liabilities ( 1,059 ) Deferred revenue ( 2,088 ) Warranty Obligations ( 535 ) Leases Liability ( 1,151 ) Total purchase consideration $ 22,100 F - 22 The following table presents the details of the intangible assets acquired at the date of AlterG acquisition (in thousands): Estimated Estimated Useful Life Fair Value (Years) Trademark $ 795 3 Technology 6,161 4 Customer relationship - Warranty 201 2 Customer relationship - Rental 2,102 4 Customer relationship - Distribution 4,578 5 Backlog 296 1 Under the preliminary purchase price allocation, the Company allocates the purchase price to tangible and identified intangible assets acquired and liabilities assumed based on the preliminary estimates of their fair values. The fair values for the intangible assets acquired were primarily based on significant inputs that are not observable in the market and thus represent a Level 3 measurement in the fair value hierarchy. Customer relationships, distributor relationships, backlog, trademark and developed technology were valued using the income approach, based on estimated projections of expected cash flows to be generated by the assets, discounted to the present value at discount rates commensurate with perceived risk. The discounted cash flow analyses factor in assumptions on revenue and expense growth rates including estimates of customer growth and attrition rates, distributor growth and attrition rates, technology obsolescence, and relief from royalty projections. Additionally, these discounted cash flow analyses factor in expected amounts of working capital, fixed assets, assembled workforce and cost of capital for each intangible asset. Such estimates are subject to change during the measurement period which is not expected to exceed one year. Any adjustments to the preliminary purchase price allocation identified during the measurement period will be recognized in the period in which the adjustments are determined. The Company incurred acquisition-related costs of $ 2.5 million included in General and administrative costs. The table below presents the pro forma revenue and earnings of the combined business as if the acquisition had occurred as of January 1, 2022 (in thousands): Twelve Months Ended December 31, 2023 2022 Revenues 24,923 25,307 Net loss ( 21,761 ) ( 28,369 ) The total revenues and net loss of AlterG, included in the consolidated income statement, since the acquisition date through December 31, 2023, amounted to 7,658 thousand and 249 thousand, respectively. The pro forma financial information for all periods presented above has been calculated after adjusting the results of AlterG to reflect the business combinations accounting effects resulting from these acquisitions. These proforma results reflect additional depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant, and equipment and intangible asset occurred at the beginning of the period, along with consequential tax effects. The unaudited pro forma results have been prepared for comparative purposes only and are not necessarily indicative of what would have occurred had the business combinations been completed on January 1, 2022, nor it is necessarily indicative of future results of operations of the combined company. Furthermore, the unaudited pro forma financial information does not reflect the impact of any synergies resulting from the acquisition. F - 23 NOTE 6:- GOODWILL AND OTHER INTANGIBLE ASSETS, NET The Company has $ 7.5 million of goodwill related to its purchase of AlterG in the third quarter of fiscal year 2023, which has an indefinite life, and is not deductible for tax purposes. As of December 31, 2023, the components of, and changes in, the carrying amount of intangible assets, net, were as follows (in thousands): Cost December 31, 2023 Accumulated Amortization Intangible Assets, Net Trademark 795 ( 104 ) 691 Technology 6,161 ( 604 ) 5,557 Customer relationship - Warranty 201 ( 40 ) 161 Customer relationship - Rental 2,102 ( 206 ) 1,896 Customer relationship - Distribution 4,578 ( 358 ) 4,220 Backlog 296 ( 296 ) - Total Amortized Intangible Assets 14,133 ( 1,608 ) 12,525 The estimated amortization expense is shown below (in thousands): Fiscal 2024 3,347 Fiscal 2025 3,307 Fiscal 2026 3,143 Fiscal 2027 2,172 Fiscal 2028 556 Total 12,525 NOTE 7:- PROPERTY AND EQUIPMENT, NET The components of property and equipment, net are as follows (in thousands): December 31, 2023 2022 Cost: Computer equipment $ 1,690 $ 743 Office furniture and equipment 468 308 Machinery and laboratory equipment 621 621 Field service units 4,166 1,816 Leasehold improvements 658 333 $ 7,603 $ 3,821 December 31, 2023 2022 Accumulated depreciation 6,341 3,625 Property and equipment, net $ 1,262 $ 196 Depreciation expenses amounted to $ 239 thousand, $ 202 thousand, and $ 266 thousand for the years ended December 31, 2023, 2022 and 2021, respectively. F - 24 NOTE 8:- COMMITMENTS AND CONTINGENT LIABILITIES a. Purchase commitment: The Company has contractual obligations to purchase goods from its contract manufacturer as well as raw materials from different vendors. Purchase obligations do not include contracts that may be cancelled without penalty. As of December 31, 2023, non-cancellable outstanding obligations amounted to approximately $ 8.6 million. b. Operating lease commitment: (i) The Company operates from leased facilities in Israel, the United States and Germany. These leases expire between 2024 and 2025. A portion of the Company’s facilities leases is generally subject to annual changes in the Consumer Price Index (CPI). The changes to the CPI are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. (ii) RRL and RRG lease cars for their employees under cancelable operating lease agreements expiring at various dates in between 2024 and 2026 A subset of the Company’s cars leases is considered variable. The variable lease payments for such cars leases are based on actual mileage incurred at the stated contractual rate. RRL and RRG have an option to be released from these agreements, which may result in penalties in a maximum amount of approximately $30 thousand as of December 31, 2023. The Company’s future lease payments for its facilities and cars, which are presented as current maturities of operating leases and non-current operating leases liabilities on the Company’s consolidated balance sheets as of December 31, 2023 are as follows (in thousands): 2024 $ 1,363 2025 674 2026 13 Total lease payments 2,050 Less: imputed interest ( 147 ) Present value of future lease payments 1,903 Less: current maturities of operating leases ( 1,296 ) Non-current operating leases $ 607 Weighted-average remaining lease term (in years) 1.92 Weighted-average discount rate 9.21 % Total lease expenses for the years ended December 31, 2023, 2022 and 2021 were $ 976 thousand, $ 739 thousand, and $ 730 thousand, respectively. c. Royalties: The Company’s research and development efforts are financed, in part, through funding from the Israel Innovation Authority (“IIA”). Since the Company’s inception through December 31, 2023, the Company received funding from the IIA in the total amount of $ 2.6 million. Out of the $ 2.6 million in funding from the IIA, a total amount of $ 1.6 million were royalty-bearing grants, $ 400 thousand was received in consideration of 209 convertible preferred A shares, which converted after the Company’s initial public offering in September 2014 into ordinary shares in a conversion ratio of 1 to 1 , while $ 570 thousand was received without future obligation. The Company is obligated to pay royalties to the IIA, amounting to 3 % of the sales of the products and other related revenues generated from such projects, up to 100 % of the grants received. The royalty payment obligations also bear interest at the LIBOR rate. The obligation to pay these royalties is contingent on actual sales of the applicable products and in the absence of such sales, no payment is required. As of December 31, 2023, the Company paid royalties to the IIA in the total amount of $ 110 thousand. Royalties expenses in cost of revenue were $ 17 thousand, $ 7 thousand and $ 14 thousand, for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023, the contingent liability to the IIA amounted to $ 1.6 million. The Israeli Research and Development Law provides that know-how developed under an approved research and development program may not be transferred to third parties without the approval of the IIA. Such approval is not required for the sale or export of any products resulting from such research or development. The IIA, under special circumstances, may approve the transfer of IIA-funded know-how outside Israel. A dditionally, the License Agreement requires the Company to pay College (“Harvard”) royalties on net sales, see Note 10 below for more information about the Collaboration Agreement (as defined below) and the License Agreement (as defined below). F - 25 d. Liens As part of the Company’s restricted cash and other long-term assets, as of December 31, 2023, an amount of $ 709 thousand has been pledged as security in respect of a guarantee granted to a third party. Such deposit cannot be pledged to others or withdrawn without the consent of such third party. e. Legal Claims: Occasionally, the Company is involved in various claims such as product liability claims, lawsuits, regulatory examinations, investigations, and other legal matters arising, for the most part, in the ordinary course of business. While the outcome of any pending or threatened litigation and other legal matters is inherently uncertain, the Company does not believe the outcome of any of the matters will have a material adverse effect on the Company’s consolidated results of operation, liquidity or financial condition. NOTE 9:- SHAREHOLDERS’ EQUITY a. Equity raise: Follow-on offerings On February 19, 2021, the Company entered into a purchase agreement with certain institutional and other accredited investors for the issuance and sale of 10,921,502 ordinary shares, par value NIS 0.25 per share at $ 3.6625 per ordinary share and warrants to purchase up to an aggregate of 5,460,751 ordinary shares with an exercise price of $ 3.6 per share, exercisable from February 19, 2021, until August 26, 2026 . Additionally, the Company issued warrants to purchase up to 655,290 ordinary shares, with an exercise price of $ 4.578125 per share, exercisable from February 19, 2021, until August 26, 2026 , to the Company February 2021 private placement offering. On September 27, 2021, the Company signed a purchase agreement with certain institutional investors for the issuance and sale of 15,403,014 ordinary shares, par value NIS 0.25 per share, pre-funded warrants to purchase up to an aggregate of 610,504 ordinary shares and ordinary warrants to purchase up to an aggregate of 8,006,759 ordinary shares at an exercise price of $ 2.00 per share. The Pre-Funded Warrants have an exercise price of $0.001 per Ordinary Share and are immediately exercisable and can be exercised at any time after their original issuance until such pre-funded warrants are exercised in full. Each ordinary shares was sold at an offering price of $2.035 and each pre-funded warrant was sold at an offering price of $2.034 (equal to the purchase price per ordinary share minus the exercise price of the pre-funded warrant). The ordinary warrants are exercisable at any time and from time to time, in whole or in part, following the date of issuance and ending five and one-half years from the date of issuance. All of the pre-funded warrants were exercised in full on September 27, 2021, and the offering closed on September 29, 2021. Additionally, the Company issued warrants to purchase up to 960,811 ordinary shares, with an exercise price of $ 2.5438 per share, exercisable from September 27, 2021, until September 27, 2026, to the Company September 2021 registered direct offering. As of December 31, 2023, a total of 9,814,754 outstanding warrants with exercise prices ranging from $ 1.25 to $ 1.79 were exercised, for total gross proceeds of approximately $ 13.8 million. During the twelve months that ended December 31, 2023 no warrants were exercised. b. Share option plans: On March 30, 2012, the Company’s board of directors adopted the ReWalk Robotics Ltd. 2012 Equity Incentive Plan. On August 19, 2014, the Company’s board of directors adopted the ReWalk Robotics Ltd. 2014 Incentive Compensation Plan or the “Plan”. The Plan provides for the grant of stock options, stock appreciation rights, restricted stock awards, RSUs, cash-based awards, other stock-based awards and dividend equivalents to the Company’s and its affiliates’ respective employees, non-employee directors and consultants. F - 26 Starting in 2014, the Company grants to directors and employees also RSU under this Plan. An RSU award is an agreement to issue shares of the company’s ordinary shares at the time the award is vested. As of December 31, 2023 and 2022, the Company had reserved 1,018,945 and 2,934,679 shares of ordinary shares, respectively, available for issuance to employees, directors, officers, and non-employees of the Company. The options generally vest over four years, with certain options granted to non-employee directors vesting over one year. Any option or RSUs that are forfeited or cancelled before expiration becomes available for future grants under the Plan. A summary of employee and non-employee shares options activity during the fiscal year ended 2023 is as follows: Number Weighted average exercise price Weighted average remaining contractual life (years) Aggregate intrinsic value (in thousands) Options outstanding at the beginning of the year 43,994 $ 41.27 4.39 $ - Granted - - - - Exercised - - - - Forfeited ( 10,823 ) 52.78 - - Options outstanding at the end of the year 33,171 $ 37.51 4.39 $ - Options exercisable at the end of the year 33,171 $ 37.51 4.39 $ - There were no options granted during the fiscal year ended December 31, 2023, 2022 and 2021. The aggregate intrinsic value in the table above represents the total intrinsic value that would have been received by the option holders had all option holders, which hold options with positive intrinsic value, exercised their options on the last date of the exercise period. During the years ended December 31, 2023, 2022 and 2021, no options were exercised. A summary of employee and non-employee RSUs activity during the fiscal year ended 2023 is as follows: Number of shares underlying outstanding RSUs Weighted- average grant date fair value Unvested RSUs at the beginning of the year 2,755,057 1.16 Granted 2,258,370 0.66 Vested ( 1,109,200 ) 1.14 Forfeited ( 131,813 ) 1.13 Unvested RSUs at the end of the year 3,772,414 0.87 The weighted average grant date fair values of RSUs granted during the fiscal year ended December 31, 2023, 2022 and 2021, were $ 0.66 , $ 1.00 and $ 1.69 , respectively. Total fair value of shares vested during the year ended December 31, 2023, 2022 and 2021 were $ 1,268 thousand, $ 860 thousand, and $ 802 thousand, respectively. As of December 31, 2023, there were $ 2.7 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the 2014 Plan. This cost is expected to be recognized over a period of approximately 2.9 years. F - 27 The number of options and RSUs outstanding as of December 31, 2023 is set forth below, with options separated by range of exercise price: Range of exercise price Options and RSUs Outstanding as of December 31, 2023 Weighted average remaining contractual life (years) (1) Options Exercisable as of December 31, 2023 Weighted average remaining contractual life (years) (1) RSUs only 3,772,414 - - - $ 5.37 12,425 5.24 12,425 5.24 $ 20.42 - $ 33.75 12,943 4.35 12,943 4.35 $ 50 -$ 52.5 6,230 3.46 6,230 3.46 $ 182.5 -$ 524.25 1,573 1.65 1,573 1.65 3,805,585 4.39 33,171 4.39 (1) Calculation of weighted average remaining contractual term does not include the RSUs that were granted, which have an indefinite contractual term. c. Equity compensation issued to consultants: The Company granted 32,895 RSUs during the fiscal year ended December 31, 2023, to non-employee consultants. As of December 31, 2023, there are 21,929 outstanding RSUs held by non-employee consultants. d. Share-based compensation expense for employees and non-employees: The Company recognized share-based compensation expense in the consolidated statements of operations as follows (in thousands): Year Ended December 31, 2023 2022 2021 Cost of revenue $ 9 $ 16 $ 10 Research and development, net 157 94 55 Sales and marketing 381 250 171 General and administrative 781 633 597 Total $ 1,328 $ 993 $ 833 e. Treasury shares: On June 2, 2022, the Company’s Board of Directors approved a share repurchase program to repurchase up to $ 8.0 million of its Ordinary Shares, par value NIS 0.25 per share. On July 21, 2022, the Company received approval from an Israeli court for the share repurchase program. The program was scheduled to expire on the earlier of January 20, 2023, or reaching $ 8.0 million of repurchases. On December 22, 2022, the Company’s Board of Directors approved an extension of the 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 it expired on August 9, 2023. As of December 31, 2023, pursuant to the Company’s share repurchase program, the Company had repurchased a total of 4,022,607 of its outstanding ordinary shares at a total cost of $ 3.5 million. F - 28 f. Warrants to purchase ordinary shares: The following table summarizes information about warrants outstanding and exercisable as of December 31, 2023: Issuance date Warrants outstanding Exercise price per warrant Warrants outstanding and exercisable Contractual term (number) (number) December 31, 2015 (1) 4,771 $ 7.500 4,771 See footnote (1) December 28, 2016 (2) 1,908 $ 7.500 1,908 See footnote (1) February 25, 2019 (5) 45,600 $ 7.187 45,600 February 21, 2024 April 5, 2019 (6) 408,457 $ 5.140 408,457 October 7, 2024 April 5, 2019 (7) 49,015 $ 6.503 49,015 April 3, 2024 June 5, 2019, and June 6, 2019 (8) 1,464,665 $ 7.500 1,464,665 June 5, 2024 June 5, 2019 (9) 87,880 $ 9.375 87,880 June 5, 2024 June 12, 2019 (10) 416,667 $ 6.000 416,667 December 12, 2024 June 10, 2019 (11) 50,000 $ 7.500 50,000 June 10, 2024 February 10, 2020 (12) 28,400 $ 1.250 28,400 February 10, 2025 February 10, 2020 (13) 105,840 $ 1.563 105,840 February 10, 2025 July 6, 2020 (14) 448,698 $ 1.760 448,698 January 2, 2026 July 6, 2020 (15) 296,297 $ 2.278 296,297 January 2, 2026 December 8, 2020 (16) 586,760 $ 1.340 586,760 June 8, 2026 December 8, 2020 (17) 108,806 $ 1.792 108,806 June 8, 2026 February 26, 2021 (18) 5,460,751 $ 3.600 5,460,751 August 26, 2026 February 26, 2021 (19) 655,290 $ 4.578 655,290 August 26, 2026 September 29, 2021 (20) 8,006,759 $ 2.000 8,006,759 March 29, 2027 September 29, 2021 (21) 960,811 $ 2.544 960,811 September 27, 2026 19,187,375 19,187,375 (1) Represents warrants for ordinary shares issuable upon an exercise price of $ 7.500 per share, which were granted on December 31, 2015 to Kreos Capital V (Expert) Fund Limited (“Kreos”) in connection with a loan made by Kreos to the Company and are currently exercisable (in whole or in part) until the earlier of (i) December 30, 2025 or (ii) immediately prior to the consummation of a merger, consolidation, or reorganization of the Company with or into, or the sale or license of all or substantially all the assets or shares of the Company to, any other entity or person, other than a wholly owned subsidiary of the Company, excluding any transaction in which the Company’s shareholders prior to the transaction will hold more than 50% of the voting and economic rights of the surviving entity after the transaction. None of these warrants had been exercised as of December 31, 2023. (2) Represents common warrants that were issued as part of the $ 8.0 million drawdown under the Loan Agreement which occurred on December 28, 2016. See footnote 1 for exercisability terms. (3) Represents common warrants that were issued as part of the Company’s follow-on public offering in November 2018. (4) Represents common warrants that were issued to the underwriters as compensation for their role in the Company’s follow-on public offering in November 2018. (5) Represents warrants that were issued to the exclusive placement agent as compensation for its role in the Company’s follow-on public offering in February 2019. (6) Represents warrants that were issued to certain institutional purchasers in a private placement in the Company’s registered direct offering of ordinary shares in April 2019. (7) Represents warrants that were issued to the placement agent as compensation for its role in the Company’s April 2019 registered direct offering. F - 29 (8) Represents warrants that were issued to certain institutional investors in a warrant exercise agreement on June 5, 2019, and June 6, 2019, respectively. (9) Represents warrants that were issued to the placement agent as compensation for its role in the Company’s June 2019 warrant exercise agreement and concurrent private placement of warrants. (10) Represents warrants that were issued to certain institutional investors in a warrant exercise agreement in June 2019. (11) Represents warrants that were issued to the placement agent as compensation for its role in the Company’s June 2019 registered direct offering and concurrent private placement of warrants. (12) Represents warrants that were issued to certain institutional purchasers in a private placement in the Company’s best efforts offering of ordinary shares in February 2020. As of December 31, 2023, 3,740,100 warrants were exercised for total consideration of $ 4,675,125 . During the twelve months that ended December 31, 2023, no warrants were exercised. (13) Represents warrants that were issued to the placement agent as compensation for its role in the Company’s February 2020 best efforts offering. As of December 31, 2023, 230,160 warrants were exercised for total consideration of $ 359,625 . During the twelve months that ended December 31, 2023, no warrants were exercised. (14) Represents warrants that were issued to certain institutional purchasers in a private placement in the Company’s registered direct offering of ordinary shares in July 2020. As of December 31, 2023, 2,020,441 warrants were exercised for total consideration of $ 3,555,976 . During the twelve months that ended December 31, 2023, no warrants were exercised. (15) Represents warrants that were issued to the placement agent as compensation for its role in the Company’s July 2020 registered direct offering. (16) Represents warrants that were issued to certain institutional purchasers in a private placement in the Company’s private placement offering of ordinary shares in December 2020. As of December 31, 2023, 3,598,072 warrants were exercised for total consideration of $ 4,821,416 . During the twelve months that ended December 31, 2023, no warrants were exercised. (17) Represents warrants that were issued to the placement agent as compensation for its role in the Company’s December 2020 private placement. As of December 31, 2023, 225,981 warrants were exercised for total consideration of $ 405,003 . During the twelve months that ended December 31, 2023, no warrants were exercised. (18) Represents warrants that were issued to certain institutional purchasers in a private placement in the Company’s private placement offering of ordinary shares in February 2021. (19) Represents warrants that were issued to the placement agent as compensation for its role in the Company’s February 2021 private placement. (20) Represents warrants that were issued to certain institutional purchasers in a private placement in the Company’s registered direct offering of ordinary shares in September 2021. (21) Represents warrants that were issued to the placement agent as compensation for its role in the Company’s September 2021 registered direct offering. NOTE 10:- RESEARCH COLLABORATION AGREEMENT AND LICENSE AGREEMENT On May 16, 2016, the Company entered into a Collaboration Agreement (as amended, the “Collaboration Agreement”) and an Exclusive License Agreement (as amended, the “License Agreement”) with Harvard. The Collaboration Agreement concluded on March 31, 2022. Under the License Agreement, Harvard has granted the Company an exclusive, worldwide royalty-bearing license under certain patents of Harvard relating to lightweight “soft suit” exoskeleton system technologies for lower limb disabilities, a royalty-free license under certain related know-how and the option to obtain a license under certain inventions conceived under the joint research collaboration. F - 30 The License Agreement required the Company to pay Harvard an upfront fee, reimbursements for expenses that Harvard incurred in connection with the licensed patents, royalties on net sales and several milestone payments contingent upon the achievement of certain product development and commercialization milestones. The Harvard License Agreement will continue in full force and effect until the expiration of the last-to-expire valid claim of the licensed patents. As of December 31, 2023, the Company achieved three of the milestones which represent all development milestones under the License Agreement. The Company continues to evaluate the likelihood that the other milestones will be achieved on a quarterly basis. The Company has recorded expenses in the amount of $ 29 thousand, $ 74 thousand, and $ 293 thousand as research and development expenses related to the License Agreement and to the Collaboration Agreement for the years ended December 31, 2023, 2022 and 2021, respectively. No withholding tax was deducted from the Company’s payments to Harvard in respect of the Collaboration Agreement and the License Agreement since this is not taxable income in Israel in accordance with Section 170 of the Israel Income Tax Ordinance 1961-5721. NOTE 11:- INCOME TAXES The Company’s subsidiaries are separately taxed under the domestic tax laws of the jurisdiction of incorporation of each entity. a. Corporate tax rates in Israel: Presented hereunder are the tax rates relevant to the Company in the years 2021-2023: The Israeli statutory corporate tax rate and real capital gains were 23 % in the years 2021-2023. b. Income (loss) before taxes on income is comprised as follows (in thousands): Year Ended December 31, 2023 2022 2021 Domestic $ ( 19,638 ) $ ( 19,110 ) $ ( 12,780 ) Foreign ( 2,507 ) 8 138 $ ( 22,145 ) $ ( 19,102 ) $ ( 12,642 ) c. Taxes on income (benefit) are comprised as follows (in thousands): Year Ended December 31, 2023 2022 2021 Current $ ( 12 ) $ 151 $ 123 Deferred - 316 ( 29 ) $ ( 12 ) $ 467 $ 94 Year Ended December 31, 2023 2022 2021 Domestic $ - $ - $ - Foreign ( 12 ) 467 94 $ ( 12 ) $ 467 $ 94 F - 31 d. Deferred income taxes (in thousands): Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company’s deferred tax assets as of December 31, 2023 and 2022 are derived from temporary differences. In assessing the realization of deferred tax assets, the Company considers whether it is more likely than not that all or some portion of the deferred tax assets will not be realized. Based on the Company’s history of losses, the Company established a full valuation allowance for RRL. Undistributed earnings of certain subsidiaries as of December 31, 2023 were immaterial. The Company intends to reinvest these earnings indefinitely in the foreign subsidiaries. As a result, the Company has not provided for any deferred income taxes. December 31, 2023 2022 Deferred tax assets: Carry forward tax losses $ 64,090 $ 50,833 Research and development carry forward expenses-temporary differences 1,311 844 Accrual and reserves 849 392 Share based compensation 394 456 Credit tax carry forwards 1,714 - Lease liabilities 480 214 Total deferred tax assets 68,838 52,739 Deferred tax liabilities: Right-of-use asset ( 470 ) ( 214 ) Intangible Assets ( 3,015 ) - Property and equipment ( 144 ) - Net deferred tax assets 65,209 52,525 Valuation allowance ( 65,209 ) ( 52,525 ) Net deferred tax assets $ - $ - The net changes in the total valuation allowance for each of the years ended December 31, 2023, 2022 and 2021, are comprised as follows (in thousands): Year Ended December 31, 2023 2022 2021 Balance at beginning of year $ ( 52,525 ) $ ( 48,098 ) $ ( 42,941 ) Changes due to exchange rate differences - 1,418 ( 1,488 ) Adjustment previous year loss ( 5 ) ( 14 ) - Acquisition ( 7,269 ) - - Additions during the year ( 5,410 ) ( 5,831 ) ( 3,669 ) Balance at end of year $ ( 65,209 ) $ ( 52,525 ) $ ( 48,098 ) F - 32 e. Reconciliation of the theoretical tax expenses: A reconciliation between the theoretical tax expense, assuming all income is taxed at the statutory tax rate applicable to income of the Company, and the actual tax expense (benefit) as reported in the consolidated statements of operations is as follows (in thousands): Year Ended December 31, 2023 2022 2021 Loss before taxes, as reported in the consolidated statements of operations $ ( 22,145 ) $ ( 19,102 ) $ ( 12,642 ) Statutory tax rate 23 % 23.0 % 23.0 % Theoretical tax benefits on the above amount at the Israeli statutory tax rate $ ( 5,093 ) $ ( 4,393 ) $ ( 2,908 ) Income tax at rate other than the Israeli statutory tax rate 56 ( 2 ) 7 Non-deductible expenses including equity-based compensation expenses and other  - 262 102 Operating losses and other temporary differences for which valuation allowance was provided 5,410 5,375 3,669 Permanent differences ( 342 ) ( 775 ) ( 784 ) Adjustment in respect of prior years ( 43 ) - - Other - - 8 Actual tax expense (benefit) $ ( 12 ) $ 467 $ 94 f. Foreign tax rates: Taxable income of RRI and AlterG was subject to tax at the rate of 21 % in 2023, 2022 and 2021. Taxable income of RRG was subject to tax at the rate of 30 % in 2023, 2022, and 2021. g. Tax benefits under the Law for the Encouragement of Capital Investments, 1959 (the “Investment Law”): Conditions for entitlement to the benefits: Under the Investment Law, in 2012 the Company elected “Beneficiary Enterprise” status which provides certain benefits, including tax exemptions and reduced tax rates. Income not eligible for Beneficiary Enterprise benefits is taxed at a regular rate. Income derived from Beneficiary Enterprise from productive activity will be exempt from tax for ten years from the year in which the Company first has taxable income, providing that 12 years have not passed from the beginning of the year of election. In the event of a dividend distribution from income that is exempt from company tax, as aforementioned, the Company will be required to pay tax of 10 %- 25 % on that income. In the event of distribution of dividends from the said tax-exempt income, the amount distributed will be subject to corporate tax at the rate ordinarily applicable to the Beneficiary Enterprise’s income. Tax-exempt income generated under the Company’s “Beneficiary Enterprise” program will be subject to taxes upon dividend distribution or complete liquidation. The entitlement to the above benefits is conditional upon the Company’s fulfilling the conditions stipulated by the Law and regulations published thereunder. h. Tax assessments: RRL, RRI and RRG has had final tax assessments up to and including the 2017 tax year. F - 33 AlterG files income tax returns in the United States and in various U.S. states. AlterG returns for the years ended December 31, 2020 and later are generally subject to federal tax examination, while the AlterG returns for the years ended December 31, 2019 and later are generally subject to state tax examination. However, the AlterG net operating losses and tax credits generally remain subject to tax examination and adjustment until they are utilized on a future tax return and the statute of limitations closes for that year. Thus, the AlterG tax attributes generally remain open to federal and state tax examination and adjustment. i. Net operating carry-forward losses for tax purposes: As of December 31, 2023, RRL has carry-forward losses amounting to approximately $ 242.6 million, which can be carried forward for an indefinite period. As of December 31, 2023, AlterG had approximately $ 31.4 million of federal net operating loss (“NOL”) carry forwards, and $ 47.2 million of state NOL carry forwards, which will begin to expire in 2025 and 2028 , respectively. The federal net operating losses from years beginning after January 1, 2018, of approximately $ 14.7 million may be carried forward indefinitely and losses prior to January 1, 2018 of approximately $ 16.7 million expire beginning in 2028 under prior law. Internal Revenue Code Section 382 places a limitation ("Section 382 Limitation") on the amount of taxable income which can be offset by NOL carry forwards after a change in control (generally greater than 50% change in the value of the stock owned by 5% shareholders during the testing period) of a loss corporation. California has similar rules. On August 11, 2023, AlterG was involved in an equity transaction that constitutes a Section 382 change in ownership. The change in ownership limits the ability to utilize net operating loss carry forwards in future years. The 382-limitation impact on NOLs has been included in the current period provision. The Company may have had earlier Section 382 changes in ownership. This will be assessed upon realization of tax attributes. F - 34 NOTE 12:- FINANCIAL (EXPENSES) INCOME, NET The components of financial (expenses) income, net were as follows (in thousands): Year Ended December 31, 2023 2022 2021 Foreign currency transactions and other $ 133 $ 22 $ 38 Interest Income 1,354 - - Bank commissions ( 20 ) ( 22 ) ( 25 ) $ 1,467 $ * ) $ 13 *) Represent an amount lower than $1. NOTE 13:- GEOGRAPHIC INFORMATION AND MAJOR CUSTOMER AND PRODUCT DATA The Company manages its business on a basis of one reportable segment. Total revenues from external customers on the basis of the Company's geographical areas are as follows (in thousands): Year Ended December 31, 2023 2022 2021 Revenue based on customer’s location: United States 7,636 2,303 2,519 Europe 5,044 3,057 3,381 Asia-Pacific 387 115 60 Rest of the world 787 36 6 Total revenues $ 13,854 $ 5,511 $ 5,966 December 31, 2023 2022 Long-lived assets by geographic region: Israel $ 529 $ 757 United States 2,404 231 Germany 190 44 $ 3,123 $ 1,032 (*) Long-lived assets are comprised of property and equipment, net, and operating lease right-of-use assets. Major customers data as a percentage of total revenue: Year Ended December 31, 2023 2022 2021 Customer A 12.2 % 14.2 % * ) Customer B * ) * ) 11.0 % *) Less than 10% F - 35 NOTE 14:- BASIC AND DILUTED NET LOSS PER SHARE The following table sets forth the computation of the Company’s basic and diluted net loss per ordinary share (in thousands, except share and per share data): Year ended December 31, 2023 2022 2021 Net loss $ ( 22,133 ) $ ( 19,569 ) $ ( 12,736 ) Net loss attributable to ordinary shares ( 22,133 ) ( 19,569 ) ( 12,736 ) Shares used in computing net loss per ordinary shares, basic and diluted 59,719,064 62,378,797 47,935,652 Net loss per ordinary share, basic and diluted $ ( 0.37 ) $ ( 0.31 ) $ ( 0.27 ) Basic and diluted net loss per share was the same for each period presented as the inclusion of all potential shares of ordinary shares and warrants outstanding would have been anti-dilutive. For the twelve months ended December 31, 2023, the total number of ordinary shares related to the outstanding warrants and share option plans aggregated to 19,220,546 , was excluded from the calculations of diluted loss per ordinary share since it would have an anti-dilutive effect. For the twelve months ended December 31, 2022, the total number of ordinary shares related to the outstanding warrants and share option plans aggregated to 19,464,888 , was excluded from the calculations of diluted loss per ordinary share since it would have an anti-dilutive effect. NOTE 15:- RESTRUCTURING ACTIVITIES On December 12, 2023, the Board of Directors of the Company approved a re-organization plan (the “2023 Reorganization Plan”) that included, among other things, downsizing approximately 15 % of the Company’s workforce and adapting the Company's organizational structure, roles, and responsibilities accordingly. During the year ended December 31, 2023, in connection with the 2023 Reorganization Plan, the Company recorded expenses of $ 670 thousand, for one time employee termination benefits and legal expenses. $ 175 thousand attributable to research and development, net, $ 70 thousand to sales and marketing and $ 425 thousand to General and administrative expenses. However, none of these amounts were paid in 2023. The Company does not expect to incur additional costs related to the 2023 Reorganization Plan. F - 36