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DATE

Friday, May 15, 2026 at 8:30 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — William Grant
• Chief Financial Officer — Almog Adar

TAKEAWAYS

• Revenue -- $3.9 million, down from $5 million, primarily due to lower AlterG shipments resulting from temporary supply chain and working capital constraints and final manufacturing transition activities.
• ReWalk Personal Exoskeleton Revenue -- $1.6 million, up 11% year over year, supported by increased reimbursement coverage, channel expansion, and growth in international markets.
• Germany Segment Growth -- ReWalk revenues increased nearly 25% sequentially from the prior quarter in Germany.
• Gross Margin -- 34.2%, compared to 42.2%, with 75%-85% of the margin decline attributed to tariffs and foreign currency exchange fluctuations; the rest to lower manufacturing absorption from reduced production volume.
• GAAP Operating Loss -- $10.3 million, primarily reflecting a $4.9 million onetime noncash R&D expense from acquired Oratech intellectual property assets.
• Adjusted (Non-GAAP) Operating Expenses -- $5.9 million, down 12% from $6.8 million, due to improved sales productivity, lower reimbursement costs, and reduced R&D following major program completions.
• Adjusted (Non-GAAP) Operating Loss -- $4.6 million, unchanged year over year, despite the lower revenue base.
• Cash Used in Operating Activities -- $3.7 million, representing a 33% reduction, driven by operational efficiencies and improved working capital management.
• Ending Cash Position -- $11.4 million in unrestricted cash and equivalents at quarter end, up from $2.2 million at year-end, reflecting $10 million in convertible note financing and approximately $6.5 million of Oratech-acquisition cash, partially offset by operational use.
• Acquisition of Oratech -- Completed, adding a protein oral delivery platform and ORMD-0801 oral insulin asset; clinical program responsibilities and costs remain outside Lifeward due to existing Oramed arrangements.
• Upper Body Exoskeleton Acquisition -- Obtained new technology for stroke rehabilitation, targeting approximately 4.6 million stroke survivors, now in development towards commercialization.
• AlterG Backlog and Shipment Outlook -- Backlog of secured AlterG orders is in place, with management expecting improved shipment execution in the coming quarters as timing constraints ease.
• 2026 Revenue Outlook -- Management states total revenue for 2026 is expected to be similar to 2025, with a "better exit trajectory" than entry, but declines to provide formal guidance.
• Medicare Advantage Coverage Expansion -- ReWalk achieved broader access through new coverage from Aetna, Humana, and UnitedHealthcare, supporting portfolio growth potential.
• Manufacturing Transition -- Facility closure in Fremont, California and move to contract manufacturing in Massachusetts completed, incurring temporary disruptions.

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RISKS

• Gross Margin Pressure -- Gross margin declined by 8 percentage points due to tariffs, unfavorable foreign exchange, and lower manufacturing absorption from reduced volume and production transitions.
• AlterG Revenue Timing -- Supply chain delays and working capital constraints led to deferred AlterG shipments, materially impacting revenue in the quarter, with management noting these issues may persist into the next quarter.
• Onetime Expense Impact -- A $4.9 million onetime, noncash research and development expense tied to the Oratech transaction caused a substantial increase in GAAP operating loss.

SUMMARY

Lifeward Ltd. (LFWD 2.96%) completed the acquisition of Oratech, adding a novel protein oral delivery platform, and acquired upper body exoskeleton technology aimed at stroke rehabilitation, diversifying its pipeline. The company reported significantly lower revenue due to delayed AlterG product shipments from supply chain constraints and manufacturing transitions, but ReWalk personal exoskeleton sales rose 11% year over year, driven by international and reimbursement gains. Despite a sharp gross margin decline, non-GAAP adjusted operating expenses dropped 12%, and cash used in operating activities declined 33%, reflecting cost optimization. Management emphasized an improved cash position of $11.4 million and anticipated revenue for 2026 to match the previous year, citing a stronger exit trajectory and operational stabilization.

• Management said, "we have a backlog of secured AlterG orders in place now and have visibility to improve shipment execution during the second and third quarters as we ship against those orders," indicating near-term revenue recovery is likely as timing issues resolve.
• The company stated clinical management and funding for the ORMD-0801 insulin program remain with Oramed, minimizing new operational burdens for Lifeward.
• Broadened reimbursement access for the ReWalk platform, specifically through Medicare Advantage insurers, was cited as a significant driver of recurring revenue opportunity.
• Operational restructuring, including the shift to contract manufacturing in Massachusetts, is now complete and expected to reduce future supply disruptions.
• An upper body exoskeleton is in development, positioning Lifeward to enter the stroke rehabilitation market, with commercial launch timing pending further progress.

INDUSTRY GLOSSARY

• AlterG: A Lifeward product line focused on rehabilitation equipment, referenced in the call regarding shipment timing.
• Exoskeleton: Wearable robotic device designed to assist movement for patients with neurological injuries or disabilities; core to Lifeward's neurorehabilitation platform.
• ORMD-0801: Oral insulin candidate acquired via Oratech, with clinical program responsibility retained by Oramed.
• Medicare Advantage: U.S. government health insurance plans run by private insurers, now including coverage for ReWalk as discussed in the call.

Full Conference Call Transcript

William Grant: Thank you, Almog, and thank you for everybody for joining us today. The first quarter of 2026 marked an important strategic milestone for Lifeward as we successfully completed the acquisition of Oratech. We believe this transaction significantly strengthens Lifeward's position as a diversified biomedical innovation company while reinforcing our focus on neurorehabilitation and our path toward profitability. We believe this was a highly strategic and capital-efficient transaction for Lifeward shareholders. Through the equity-based acquisition of Oratech, we gained access to the protein oral delivery platform, a potentially transformative technology across many therapeutic indications, including ORMD-0801 oral insulin, which is expected to commence a Phase II study.

Importantly, the clinical program management responsibilities remain with Oramed, utilizing funds previously transferred to Oratech as part of the strategic transaction. That means Lifeward and our shareholders by owning the protein orally delivered platform outright effectively receive a meaningful option on the potential success of the promising technology with minimal near-term operational burden, no material increase in operating expenses and limited management bandwidth requirements beyond my own involvement, supporting strategic oversight and development guidance. As many of you know, my background includes extensive experience in diabetes and metabolic disease, and I believe this platform has meaningful long-term potential. At the same time, Lifeward's core focus remains firmly centered on scaling our neurorehabilitation MedTech business.

The second key takeaway from the quarter is Lifeward is now substantially better positioned on its path to profitability. With the $10 million from our convertible note financing, we have significantly strengthened our balance sheet and improved our operating flexibility. This allows us to stabilize and build upon the fundamental and foundational work we have done over the last several quarters, while maintaining our disciplined focus on operational efficiency, market access and innovation across our neuro rehabilitation platform. We expect continued operational stabilization over the next several quarters as our baseline resets following our manufacturing transition initiatives completed over the last year and the consummation of the important transaction this quarter.

This gives us improved visibility as we move toward the end of 2026 and into 2027. Turning to commercialization. We continue to make progress expanding distribution in the U.S. and internationally as well as broadening reimbursement access for ReWalk, including through Medicare Advantage insurers such as Aetna, Humana and UnitedHealthcare. We believe this positions our entire neurorehabilitation portfolio and ReWalk in particular, for very long-term growth. On the commercial side, ReWalk's personal exoskeleton sales increased 11% year-over-year, reflecting the continued uptrend we are seeing in international sales, reimbursement and distribution expansion. Total revenue for the quarter was impacted primarily by the AlterG shipment.

We experienced temporary timing disruptions associated with working capital constraints late last year that affected sourcing and supply chain execution. Importantly, we have a backlog of secured AlterG orders in place now and have visibility to improve shipment execution during the second and third quarters as we ship against those orders. We are also impacted by tariffs and the financial impacts of our manufacturing transition following the closure of our Fremont, California facility and the shift to contract manufacturing in Massachusetts. Finally, we continue to evaluate strategic and accretive acquisition opportunities that complement our core rehabilitation and biomedical platform.

During the first quarter, we acquired an upper body exoskeleton technology designed to address the substantial unmet need of approximately 4.6 million stroke survivors. This is a great complement to our ReWalk platform. Development work is underway as we work towards commercial launch. Overall, we believe Lifeward is stronger strategically and operationally than it was a year ago. We are building a scalable platform with improving operational leverage and multiple potential drivers for future growth. With that, I'll turn the call back over to Almog.

Almog Adar: Thank you, Mark. Revenue for the first quarter of 2026 was $3.9 million compared to $5 million in the first quarter of 2025. The year-over-year decline was primarily driven by lower AlterG shipments resulting from temporary supply chain and sourcing constraints associated with working capital limitations and the final stage of our manufacturing transition activities. Importantly, ReWalk personal exoskeleton revenue increased 11% year-over-year to $1.6 million, reflecting continued progress in reimbursement coverage, channel expansion and international sales. Gross margin for the quarter was 34.2% compared to 42.2% in the prior year quarter. The decrease was primarily attributable to lower manufacturing absorption resulting from reduced production volumes, higher freight and tariff expenses as well as unfavorable foreign currency exchange rate movements.

Despite lower revenue, we continue to make meaningful progress in improving our operating expenses structure. Total operating expenses were $11.7 million, an increase primarily due to a onetime noncash research and development expense of approximately $4.9 million related to the acquired intellectual property assets in connection with Oratech transaction. On a non-GAAP basis, adjusted operating expenses declined 12% to $5.9 million compared to $6.8 million in the first quarter of 2025. The reduction was driven primarily by improved productivity across sales and marketing operations, lower reimbursement-related costs and reduced R&D spending following the completion of several major development programs. We believe these actions are creating a more efficient operating platforms capable of generating meaningful leverage as revenue volumes increase.

GAAP operating loss increased for the quarter to $10.3 million, primarily due to the Oratech-related onetime expenses I just described. On a non-GAAP basis, adjusted operating loss was unchanged year-over-year at $4.6 million despite lower revenue, reflecting the benefits of our cost optimization initiatives. Cash used in operating activities declined by 33% to $3.7 million compared to the first quarter of 2025, primarily reflecting improved operational efficiencies and working capital management. Turning to liquidity. We ended the quarter with $11.4 million in unrestricted cash and cash equivalents compared to $2.2 million at the year-end 2025.

The increase reflects the successful closing of our strategic transaction, including the $10 million financing and the additional approximately $6.5 million of cash associated with the Oratech acquisition. As we move through 2026, our focus remains on disciplined cash management, improving operational efficiency and positioning the business for scalable growth and long-term profitability. With that, we will now open the call for Q&A, followed by closing remarks from Mark.

Operator: [Operator Instructions] The first question comes from Dr. Yale Jen with Laidlaw & Company.

Yale Jen: My first one is that in terms of AlterG, we understand the first quarter figure was due to the timing of shipments. So should we anticipate for the second and third quarter, you will get back to the level similar to last year and sort of make up for the differences? And then I have a follow-up.

William Grant: Yale, I think that's a fair assumption. And I think it is going to bridge across the second and third quarter.

Yale Jen: So that -- okay. So maybe just on top of that question, on the last earnings call, you guys suggest that the 2026 total revenue will be similar to 2025. And given a little bit lower first quarter figures this year, should we anticipate additional growth in the remaining 3 quarters, again, to match up to the total revenue similar to last year?

William Grant: I think some of the things that most people don't appreciate, and we probably didn't explain well is we had a manufacturing move from Fremont to Massachusetts. We also had a complete facility move within Massachusetts, and we started a contract manufacturer all at the same time. And so all of these things led, with our cash constraints, to timing issues on everything. I would expect that we have similar to last year. And I would also expect the exit trajectory to be better than it is the entry trajectory.

Yale Jen: Okay. Great. That's very helpful. Maybe the last question here is the ReWalk units in Germany -- the leap in Germany, maybe also in the United States. Could you give a little bit color on both of those?

Almog Adar: So the revenues in Germany specifically increased almost 25% quarter versus quarter in ReWalk. And in total, the increase is 11% year-over-year or for ReWalk revenues, we ended with $1.6 million compared to $1.3 million in prior year quarter.

Operator: The next question comes from Dr. Ram with H.C. Wainwright.

Swayampakula Ramakanth: This is RK from H.C. Wainwright. A couple of questions from me, Mark and Almog. Just trying to understand the AlterG supply/working capital issue. What's the nature of that? And do you think you have already resolved it? Or do you feel you can get it resolved soon so that the flow of product into the market during Q2 and Q3 is going to be smooth. And additionally, I'm not sure you stated this in the call, is there a book of sales that you can give us so that we understand what is expected over the next couple of quarters?

William Grant: Yes. So I'll address the first part. I'll let Almog pick up the second part. So by and large, we're going to resolve the issues with AlterG as we go through and exit this quarter. Those were -- RK, those are basically and really relegated to the cash constraints and procurement as we pushed into this quarter. And so it's a timing issue for us. As we stated, we have a backlog of AlterG sales that we're working through today, and we expect those sales to gain momentum as we exit the quarter and move into Q3. But I will caution everybody, I don't believe I'm going to resolve everything this quarter.

I think that we'll actually probably carry some into next quarter. But during Q3, we could become whole and be in really good shape. And as far as the outlook -- and again, Almog can give some color on. As far as the outlook, we're going to continue to hold that revenues will be similar to last year, and you could see the trajectory change as we exit the year. But this has been a substantial restructuring of the company, moving to the new strategic partner, changing facilities. And as we get through this lift and start to really mature things, we'll start to give a forward-looking forecast. But right now, we're going to hold. Almog, anything to add?

Almog Adar: No, nothing special. At this stage, as Mark mentioned, we are not providing this year guidance, but we're expecting that to be similar to previous year and to do some catch up in Q1.

Swayampakula Ramakanth: Okay. Great. And then on the gross margin decline of 800 bps, how much of that is tariff versus FX versus either volume or absorption?

Almog Adar: It's a good question, RK. Like -- the fluctuation in the exchange rate together with the tariff, it covered like between 75% to 85% from this gap compared to prior year quarter. The other is mainly the absorption that we mentioned related to the production reduction.

Swayampakula Ramakanth: Okay. A couple more questions from me, sorry. On the Medicare Advantage coverage that you have from Aetna, Humana and UnitedHealthcare, is there a way you can give us additional commentary regarding what's the traditional Medicare and what's the conversion rate that you're seeing, especially on submitted claims?

William Grant: So when I came into the business, I did an assessment of the business and part of that assessment was actually looking at moving products into the payer landscape and what it takes. If I look back over the innovation trail of Lifeward, they did a phenomenal job of innovation, where they actually had some gaps were how they address payers. And you know the story over the last 3 years where they really started working with Medicare to gain coding, to gain pricing and then now we've started to get coverage and payer placement across other payers.

We have a team in the background that's been working with us since I joined the company to assess the situation and to build it since now you've seen Aetna, United and Humana come on board, and our pipeline continues to grow. We need to push further into the private placement into the market, the blues of the world, if you will. And so that pipeline continues to build. Part of the structure is that we're moving to our channel partners, which we announced like Verita Neuro, who have deeper transitions into payers.

And so my goal is to get to every patient everywhere in 2 forms, one of which is through their payer and secondarily is to get to them in the community. And so you're asking a great question. This is a piece of the business that has great overlap with my past and that we're building on today. I don't have a direct answer for the pipeline right now as we continue to shift that pipeline from us to our channel partners and continue to build out the distribution network. But there's a lot more to come on this. It's probably the most exciting piece about the business outside of innovation.

Swayampakula Ramakanth: And talking about shifting the pipeline, not only you have the products from Oratech, but now you also have an upper body exoskeleton product, which you brought onto your portfolio. So since there are quite a few moving parts, how are you managing your resources and also navigating through all these changes? And you yourself are kind of getting settled into this. So I'm just trying to understand what's the trajectory of things? How should we think about growth from here? And is this a 2-year plan? Or is this a 5-year plan?

William Grant: So I think a couple of things, one of which is everybody is going to understand that I've got 3 decades of actually managing these particular revenue cycles. So they're very comfortable to me. Number two, and just to redescribe the Oratech transaction. So there is little to no interaction from our staff with what needs to happen with ORMD-0801 oral insulin. That's going to be handled with Oramed and also is prefunded. And so I'm the only one who actually has overlap with that from a strategic perspective, so it doesn't have any drain on resources. So that's one thing that's really exciting.

As we bring in the new upper body exoskeleton, and I'm glad you mentioned that, and we start to work against commercialization and finalizing MVP and bringing that to market, that -- you're going to find that we're going to be known as an innovator, an aggregator and an exploiter of commercial models, right? And those, in particular, are channel partners. We're looking for partners and have partners secured that have these patients at hand. Going out and finding these patients one by one, the needle in the haystack, is definitely not a good business model, and that's why we've made the conscious shift.

We're going to work with channel partners that excel in these areas like the CorLifes of the world. We work with workers' comp, where they have these patients at hand, they can market to them and it's a complementary therapy. You could expect the same for all of our portfolio. That's where the vast amount of my experience was spent, was developing channel partners, driving innovation and execution and then obviously, the payer landscape with my background. So those shifts are super exciting and needed for the company. But going to areas where we actually can get to patients directly with channel partners is probably one of the most important things to me going forward.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Mark Grant for any closing remarks.

William Grant: Drew, thank you. Listen, we believe that Lifeward is entering into a new phase as more diversified biomedical innovation company with improving financial flexibility and a clear path for profitability. We remain focused on executing our operational priorities, scaling our neurorehabilitation platform and advancing strategic partnerships while fostering a unique and potentially very high-value event with our biomedical platform. Thank you again for joining us today. We look forward to updating you on our progress next quarter. Thank you, everybody.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.