SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2026

Cash and cash equivalents, restricted cash, prepaid expenses and other assets, trade payables and accrued expenses and other liabilities, are stated at their carrying value which approximates their fair value due to the short time to the expected receipt or payment.

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 March 31, 2026 and December 31, 2025 (in thousands):

		Fair value measurements as of
Description	Fair Value Hierarchy	March 31, 2026		December 31, 2025

Financial Liabilities:
Pre-Funded Warrant Liability	Level 3		2,154		-
Derivative liability	Level 3		3,197		1,366
Warrant Liability	Level 3		4,688		-
Total liabilities measured at fair value		$	10,039	$	1,366

The estimated fair value of the derivative liability and warrant liability is using the Black-Scholes option-pricing model, which is a Level 3 fair value measurement. The model requires the use of several key assumptions, including the stock price, exercise price, expected term, expected volatility, risk-free interest rate, expected dividend yield and assumptions related to the Company’s non-performance risk and other company-specific risk adjustments, which represent significant unobservable inputs.

The estimated fair value of the pre-funded warrant liability was based on the quoted fair value of the underlying instrument, adjusted for company-specific risk considerations and other valuation assumptions. As the valuation incorporated significant unobservable inputs, the pre-funded warrant liability was classified as a Level 3 fair value measurement under ASC 820.

The following table provides the inputs used for Level 3 fair value measurements of derivative liability:

	March 31, 2026			December 31, 2025
Stock price	$	6.63		$	6.96
Term (in years)	2.99			0.37
Volatility		80.01	%		87.91%-93.12%
Risk-free rate		3.88	%		3.65%-3.65%
Dividend yield		0	%		0	%

The following table provides the inputs used for Level 3 fair value measurements of warrant liability:

	March 31, 2026			December 31, 2025
Stock price	$	6.63		$	-
Term (in years)	4.99			-
Volatility		72.37	%		-
Risk-free rate		4.01	%		-
Dividend yield		-			-

Derivative liability at fair value

The following table summarizes the derivative liability activity as of March 31, 2026 (in thousands):

	Derivative liability
Balance December 31, 2025	$	1,366
Issuance of derivative liability	2,478
Change in fair value		(647	)
Balance March 31, 2026	$	3,197

Pre-Funded Warrant and Warrant Liabilities at Fair Value

The following table summarizes the warrant liability activity as of March 31, 2026 (in thousands):

	Warrant liability
Balance December 31, 2025	$	-
Issuance of warrant liability	6,720
Change in fair value		122
Balance March 31, 2026	$	6,842

Convertible Promissory Notes

The Company applies ASC 470-20, “Debt with Conversion and Other Options” (“ASC 470-20”). In accordance with ASC 470-20 the Company first allocates the proceeds to freestanding liability instrument that are measured at fair value at each reporting date, based on their fair value. The remaining proceeds are allocated between the convertible debt and any bifurcated embedded derivatives.

In accordance with ASC 815 “Derivatives and Hedging” (“ASC 815”), the Company bifurcates embedded derivatives for the conversion option that require bifurcation and accounts for it separately from the convertible debt.

The Company applies ASC 815, “Derivatives and Hedging” to all features related to convertible debt. When features meet the definition of a derivative that do not qualify for any scope exceptions within ASC 815, they are required to be accounted for separately from the debt instrument and recorded as derivative instrument liabilities. The fair value assigned to the embedded derivative instruments is marked to market in each reporting period. The Company has recorded embedded derivative liabilities related to the convertible promissory note. Liability classified bifurcated embedded derivatives are presented in the same line item with the related debt host liability

For further information regarding the convertible promissory notes, see Note 9.

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 centers, professional and college sports teams, private individuals (who finance the purchases by themselves, through fundraising or reimbursement coverage from insurance companies), and distributors.

Disaggregation of Revenues (in thousands):

	Three Months Ended March 31,
	2026		2025
Sale of products	$	2,967	$	3,726
Lease of products		409		460
Service and warranties		547		848
Total Revenue	$	3,923	$	5,034

Product revenue

The Company offered to its customers five products: (1) ReWalk Personal, (2) ReWalk Rehabilitation, (3) AlterG Anti-Gravity system, (4) MyoCycle, and (5) ReStore.

Revenue from Products sold to rehabilitation facilities and end users is recognized at a point in time once the customer has obtained control of the products usually upon delivery.

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

With the recent establishment of a Medicare reimbursement pathway for the ReWalk product, the Company includes variable consideration in the form of implicit price concessions if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. The Company reassesses variable consideration at each reporting period and, if necessary, these estimates are adjusted to reflect the anticipated amounts to be collected when those facts and circumstances become known.

For contracts with Medicare, the Company determines the amount of variable consideration that should be included at the transaction price, using contractual agreements and historical reimbursement experience with Medicare. The Company applies constraint to the transaction price, such that revenue is recorded only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in the future. If actual amounts of consideration ultimately received differ from the Company’s estimates, the Company adjusts these estimates, which would affect revenue in the period such adjustments become known. During the three-month period ended March 31, 2026, as a result of a change in estimate, the Company increased revenue by approximately $0.1 million , due to the consideration ultimately received compared with the amounts previously estimated.

Lease revenue

A portion of the Company's sales of products to customers are made through lease arrangements which typically include AlterG Anti-Gravity systems. Revenue for the lease of AlterG Anti-Gravity systems is accounted for under ASC Topic 842, Leases. AlterG Anti-Gravity systems being utilized under service agreements, accounted for in accordance with ASC 842 as an operating lease. Revenues are recognized ratably over the lease term.

Service and warranties

The Company provides product assurance warranties for periods of 1- 10 years (usually 2 years) that cover the compliance of the products with agreed-upon specifications. A provision is recorded for estimated warranty costs based on the Company's experience.

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.

In certain contracts, the company also provides a service-type warranty. Service-type warranty is accounted for as a separate performance obligation, and revenue is recognized ratably over the service period as the customer consumes the benefit over the service term.

Contract balances (in thousands):

	March 31,		December 31,
	2026		2025
Trade receivable, net of credit losses	$	5,664	$	6,138
Deferred revenues (1)	$	2,174	$	2,153

During the three months ended March 31, 2026, $443 thousand of the December 31, 2025 deferred revenues balance was recognized as revenues.

Deferred revenue is composed primarily of unearned revenue related to service type warranty obligations, multi-year services contracts, 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 March 31, 2026 and the estimated revenue expected to be recognized in the future amounts to $2.4 million, which will be fulfilled over one to five years.

Concentrations of Credit Risks

Concentrations of Credit Risks:

The below table reflects the concentration of credit risk for the Company’s current customers as of March 31, 2026, to which substantial sales were made:

	March 31,			December 31,
	2026			2025
Customer A		62	%		56	%

The allowance for credit losses is based on the Company’s assessment of the collectability of accounts. The Company regularly assessed collectability 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 future expected economic conditions. The Company does not have any off-balance sheet credit exposure related to its customers. As of March 31, 2026 and December 31, 2025 trade receivables are presented net of allowance for credit losses in the amount of $234 thousand and $192 thousand respectively.

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, 2025	$	343
Provision	133
Usage		(136	)
Balance at March 31, 2026	$	340

Basic and diluted net loss per ordinary share

Basic and diluted net loss per ordinary share:

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.

As of March 31, 2026 and 2025, outstanding warrants, pre-funded warrants, share options and convertible notes convertible or exercisable into 6,973,007 and 357,779 ordinary shares, respectively, were excluded from the calculation of diluted loss per ordinary share because their effect would have been anti-dilutive.

Goodwill and acquired intangible assets

Goodwill has been recorded in the Company's financial statements resulting from various business combinations. Goodwill represents the excess of the purchase price in a business combination over the fair value of identifiable tangible and intangible assets acquired and liabilities assumed. Goodwill is subject to an annual impairment test.

The Company currently has one reporting unit.

ASC 350, Intangibles - Goodwill and other (“ASC 350”) requires goodwill to be tested for impairment at least annually and, in certain circumstances, between annual tests. The accounting guidance gives the option to perform a qualitative assessment to determine whether further impairment testing is necessary. The qualitative assessment considers events and circumstances that might indicate that a reporting unit's fair value is less than its carrying amount. If it is determined, as a result of the qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative test is performed. The Company elects to perform an annual impairment test of goodwill as of December 31 of each year, or more frequently if impairment indicators are present.

The Company concluded that no impairment of goodwill was identified for the three months ended March 31, 2026 and 2025. Refer to Note 5 for further details.

Acquired In-Process Research and Development

In an asset acquisition, the initial costs of rights to in-process research and development projects acquired are expensed as R&D in the consolidated statements of operations unless the in-process research and development has an alternative future use. In a business combination, the fair value of in-process research and development is capitalized as an indefinite-lived intangible asset, regardless of whether the in-process research and development asset has an alternative future use.

During the three months ended March 31, 2026, the Company recognized approximately $4.9 million of acquired in-process research and development expense related to the Oratech asset acquisition, as the acquired in-process research and development assets were determined to have no alternative future use.

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.

New Accounting Pronouncements

Recently Implemented Accounting Pronouncements

In July 2025, the Financial Accounting Standard Board (“FASB”) issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606, Revenue from Contracts with Customers. The practical expedient assumes that current conditions as of the balance sheet date do not change for the remaining life of the assets. The Company adopted this guidance on January 1, 2026. on a prospective basis, and elected the practical expedient provided by ASU 2025-05. Under this expedient, the Company assumes that economic conditions as of the balance sheet date remain unchanged for the remaining life of all current accounts receivable and current contract assets arising from transactions under ASC 606. The Company continues to estimate expected credit losses for non-current receivables and contract assets in accordance with ASC 326. The adoption did not have a material impact on its consolidated financial statements.

Recent Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.

ii.

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. The update provides recognition, measurement, presentation, and disclosure requirements for government grants, including guidance for grants related to an asset and grants related to income. The amendments introduce two permitted approaches for asset-related grants: a deferred income approach or a cost accumulation approach. The guidance is effective for the Company beginning December 15, 2028, with early adoption permitted. The Company is currently evaluating the impact on its consolidated financial statement.

iii.

In December 2025, the FASB issued ASU 2025-11 to amend the guidance in Interim Reporting (Topic 270). The update provides clarifications intended to improve the consistency and usability of interim disclosure requirements, including a comprehensive listing of required interim disclosures and a new disclosure principle for reporting material events occurring after the most recent annual period. The amendments do not change the underlying objectives of interim reporting but are designed to enhance clarity in application. The guidance is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years. The Company is currently evaluating the impact on its consolidated financial statement disclosures.