10-Q: Lifeward Q3 2025: Cash Burn Improves Amid Going Concern Doubt

Lifeward Ltd. reported a 6.4% revenue decrease for the nine months ended September 30, 2025, but improved gross profit margins and reduced operating cash burn, while facing a Nasdaq delisting notice and securing a $3.0 million loan.

Summary

• Lifeward Ltd. reported total revenues of $16.953 million for the nine months ended September 30, 2025, a decrease of 6.4% from $18.118 million in the same period of 2024.
• Gross profit increased by 15.2% to $7.340 million for the nine months ended September 30, 2025, compared to $6.372 million in 2024, with gross profit margin improving to 43.3% from 35.2%.
• The company incurred a net loss of $14.566 million for the nine months ended September 30, 2025, an increase from $13.664 million in the prior year.
• Operating loss for the nine months ended September 30, 2025, was $14.556 million, compared to $14.119 million in 2024.
• A goodwill impairment charge of $2.783 million was recorded during the nine months ended September 30, 2025, due to a sustained decline in the company's stock price.
• Cash and cash equivalents stood at $1.956 million as of September 30, 2025, down from $6.746 million at December 31, 2024.
• Net cash used in operating activities improved to $13.271 million for the nine months ended September 30, 2025, from $17.749 million in the same period of 2024.
• The company's accumulated deficit reached $279.4 million as of September 30, 2025.
• Management estimates existing cash resources will fund operations into the first quarter of 2026, raising substantial doubt about the company's ability to continue as a going concern.
• Lifeward received a Nasdaq deficiency letter on August 5, 2025, for its share price falling below the $1.00 minimum bid requirement, with a deadline of February 2, 2026, to regain compliance.
• The company secured a $3.0 million secured promissory note from Oramed Ltd. on November 14, 2025, bearing 15% interest and maturing on May 14, 2026, convertible into ordinary shares at $0.45 per share.
• Record ReWalk Medicare beneficiary placements were achieved in Q3 2025, the highest since Medicare formalized its fee schedule in April 2024.
• The ReWalk 7 Personal Exoskeleton received CE mark approval, enabling commercial sales in Europe.

Sentiment

Score: 3

Explanation: The sentiment is predominantly negative due to the 'going concern' warning, Nasdaq delisting risk, increased net loss, and significant cash burn. While there are positives like improved gross margins and Medicare progress, these are overshadowed by the severe financial and operational uncertainties.

Positives

• Gross profit margin improved significantly to 43.7% for Q3 2025 (from 36.2% in Q3 2024) and 43.3% for the nine months ended September 30, 2025 (from 35.2% in 2024), driven by lower production costs and manufacturing transitions.
• Quarterly cash burn improved to $3.8 million in Q3 2025, down from $4.5 million in Q3 2024, reflecting cost-structure optimization and improved reimbursement efficiency.
• Net cash used in operating activities decreased by $4.5 million, or 25.2%, for the nine months ended September 30, 2025, compared to the same period in 2024.
• Achieved record ReWalk Medicare beneficiary placements in Q3 2025, the highest since Medicare formalized its fee schedule in April 2024.
• Received the first commercial revenue under a Medicare Advantage plan coverage for a ReWalk 7 Personal Exoskeleton.
• The ReWalk 7 Personal Exoskeleton received CE mark approval, enabling commercial sales in Europe, a market representing approximately 40% of the company's exoskeleton sales.
• An Administrative Law Judge (ALJ) ruled in favor of Medicare coverage and reimbursement for the ReWalk Personal Exoskeleton in June 2025, establishing a legal basis for its medical necessity.
• CMS confirmed personal exoskeletons are included in the Medicare brace benefit category as of January 1, 2024, with a final lump-sum Medicare purchase fee schedule amount of $91,032 established on April 11, 2024.
• Entered an exclusive distribution agreement with CorLife, LLC. in March 2025, to increase penetration of SCI Products into the workers compensation market.

Negatives

• Total revenues decreased by 6.4% to $16.953 million for the nine months ended September 30, 2025, compared to $18.118 million in the prior year, primarily due to lower average selling prices, an unfavorable sales mix, and reduced service-related revenues from AlterG.
• Net loss increased to $14.566 million for the nine months ended September 30, 2025, from $13.664 million in the same period of 2024.
• The company recorded a goodwill impairment charge of $2.783 million during the nine months ended September 30, 2025, due to a sustained decline in its stock price.
• Cash and cash equivalents significantly decreased to $1.956 million as of September 30, 2025, from $6.746 million at December 31, 2024.
• Management has concluded that substantial doubt exists about the company's ability to continue as a going concern for at least 12 months from the date of issuance of the financial statements, with cash funding operations only into the first quarter of 2026.
• Received a Nasdaq deficiency letter on August 5, 2025, for failing to maintain a minimum bid price of $1.00, risking delisting if compliance is not regained by February 2, 2026.
• The earnout liability of $608 thousand related to the AlterG acquisition was eliminated during the nine months ended September 30, 2025, as performance targets for the remaining period were not met.
• General and administrative expenses increased by $2.5 million, or 72.8%, for the nine months ended September 30, 2025, partly due to a $0.6 million bad debt expense and restructuring costs related to leadership transition.

Risks

• Substantial doubt exists about the company's ability to continue as a going concern, requiring additional funding that may not be secured on acceptable terms or in sufficient amounts.
• Failure to regain and maintain compliance with Nasdaq's minimum bid price requirement could lead to delisting of ordinary shares, impairing liquidity and value.
• Inability to repay the $3.0 million Secured Promissory Note with Oramed Ltd. could result in the transfer of secured assets (cash) held as collateral to Oramed, and Oramed could accelerate all obligations.
• Future equity or convertible debt issuances to raise capital could result in significant dilution to existing stockholders.
• Reliance on third-party suppliers for product components and contract manufacturers for production, with non-cancelable purchase obligations amounting to approximately $7.5 million as of September 30, 2025.
• Potential impact of substantial sales of shares by certain shareholders on the market price of ordinary shares.
• Market and other conditions, including inflationary pressures, interest rate, currency rate fluctuations, changes in trade policies, or global instability (e.g., ongoing conflicts in Russia-Ukraine and the Middle East), may disrupt business operations or financial condition.

Future Outlook

Management expects future growth to be driven by sales of the ReWalk Personal Exoskeleton through expanded commercial and government third-party payor coverage, increased penetration of AlterG Anti-Gravity systems in rehabilitation clinics, and more placements of the MyoCycle device. The company intends to focus R&D resources on supporting current products and making design enhancements to reduce material costs for ReWalk and AlterG product lines. However, the company anticipates incurring future net losses and negative operating cash flows, requiring additional funding to support planned operations and achieve profitability.

Management Comments

• Management intends to raise funds through one or more financings in the near term to meet cash requirements for the next 12 months.
• The company expects its cash to fund operations into the first quarter of 2026.
• We expect our growth to be driven by sales of our ReWalk Personal Exoskeleton through expansion of coverage and reimbursement by commercial and government third-party payors, more shipments of our AlterG Anti-Gravity system through greater penetration of rehabilitation clinics in the U.S. and internationally, and more placements of the MyoCycle device with rehabilitation clinics and personal users.
• We intend to focus our research and development resources primarily on supporting our current products and making design enhancements to reduce the material costs for our ReWalk and AlterG product lines.
• Our sales and marketing efforts are expected to focus on driving growth in our commercial product portfolio, expanding the reimbursement coverage by commercial payors of our ReWalk Personal Exoskeleton device, and expanding the commercial and clinical capabilities of the Lifeward organization.

Industry Context

Lifeward operates in the medical device industry, specializing in physical rehabilitation and recovery solutions, including robotic exoskeletons and anti-gravity systems. The industry is heavily influenced by regulatory approvals (FDA, CE Mark) and reimbursement policies from government and private payors (Medicare, commercial insurers). The company's progress in securing Medicare coverage for its ReWalk Personal Exoskeleton and expanding distribution through partners like CorLife reflects a strategic focus on navigating complex reimbursement landscapes and broadening market access, which are critical trends in the medical device sector. The pausing of ReBoot development highlights the challenges of balancing innovation with commercial viability and reimbursement potential in this capital-intensive industry.

Management Changes

Corporate Governance

Stakeholder Impact

• Shareholders face significant dilution risk from ongoing and future capital raises, as well as the potential for delisting from Nasdaq, which could impair share liquidity and value.
• Employees may experience workforce reductions in non-revenue-generating functions and consolidation of corporate infrastructure as part of cost reduction initiatives.
• Customers may benefit from continued product development and expanded reimbursement pathways for devices like the ReWalk Personal Exoskeleton, but potential operational disruptions could affect service.
• Creditors, particularly Oramed Ltd., have a secured interest in the company's cash, providing a senior claim in the event of default, which could impact other creditors.

Next Steps

• Regain compliance with Nasdaq's minimum bid price requirement by February 2, 2026.
• Raise additional funds through equity and/or debt financings to support operations and address the 'going concern' doubt.
• Focus research and development resources on supporting current products and making design enhancements to reduce material costs for ReWalk and AlterG product lines.
• Expand reimbursement coverage by commercial payors for the ReWalk Personal Exoskeleton device.
• Expand the commercial and clinical capabilities of the Lifeward organization.

Key Dates

Recommendation

The company faces severe financial distress, evidenced by the 'substantial doubt about its ability to continue as a going concern' and critically low cash reserves projected to last only into Q1 2026. The Nasdaq delisting notice adds significant uncertainty and risk to shareholder value and liquidity. While there are some operational improvements like better gross margins and reduced cash burn, these are heavily overshadowed by the existential threats. The recent capital raises have been highly dilutive, and the new secured loan from Oramed further encumbers the company's cash. Given these profound risks and the precarious financial position, a seasoned investor would likely recommend a strong sell.

Keywords

Lifeward, LFWD, SEC filing, 10-Q, Quarterly Report, medical device, exoskeleton, rehabilitation, ReWalk, AlterG, financial results, cash flow, Nasdaq, capital raise, Oramed, Medicare, going concern, goodwill impairment, corporate governance