Lifeward (LFWD) risk factors, FY2024 10-K

Risks Related to Our Business and Our Industry

1. 01We have concluded that there is substantial doubt as to our ability to continue as a going concern
2. 02Global, regional, and local economic weakness and uncertainty could adversely affect our demand for our products and services and our business and financial performance
3. 03We may not fully realize the anticipated positive impacts to future financial results from our streamlining efforts
4. 04We face economic and political risks associated with doing business in Taiwan, particularly due to the geopolitical tension between Taiwan and China, and in Russia that could negatively affect our business and hence the value of your investment
5. 05If we fail to meet the requirements for continued listing on the Nasdaq Capital Market, our ordinary shares could be delisted from trading, which would decrease the liquidity of our ordinary shares and our ability to raise additional capital
6. 06Our future growth and operating results will depend on our ability to develop, receive regulatory clearance for and commercialize new products and penetrate new product and geographic markets
7. 07The market for medical exoskeletons, including soft suit devices, remains relatively new and unproven, and important assumptions about the potential market for our current and future products may be inaccurate
8. 08Future products for those with paraplegia or other mobility impairments or spinal cord injuries may have the same or other restrictions
9. 09We expect that in the future a significant source of payment for ReWalk systems will be private insurance plans and managed care programs, government programs such as Medicare, the VHA, workers’ compensation plans, and other third-party payors
10. 10Defects in our products or the software that drives them could adversely affect the results of our operations
11. 11If we are unable to leverage our sales, marketing, and training infrastructure we may fail to increase our sales
12. 12The potential health benefits of our ReWalk products have not been substantiated by long-term clinical data, which could limit sales of such products
13. 13We depend on third-party suppliers to manufacture our ReWalk and AlterG products and we rely on a limited number of third-party suppliers for certain components of our products
14. 14We operate in a competitive industry that is subject to rapid technological change, and we expect competition to increase
15. 15We utilize independent distributors for the ReWalk and ReStore products who are free to market other products that compete with ours
16. 16We may receive a significant number of warranty claims or our ReWalk, AlterG, or ReStore systems may require significant amounts of service after sale
17. 17We may not be able to enhance our exoskeleton product offerings through our research and development efforts
18. 18obtain the necessary regulatory clearances and approvals for proposed products
19. 19We may enter into collaborations, in-licensing arrangements, joint ventures, strategic alliances, business acquisitions or partnerships with third parties that may not result in the development of commercially viable products or the generation of significant future revenue
20. 20We may seek to grow our business through acquisitions of businesses, products or technologies, and the failure to manage acquisitions, or the failure to integrate them with our existing business, could have a material adverse effect on our business, financial condition, and operating results
21. 21increased legal and accounting costs relating to the acquisitions or compliance with regulatory matters

Risks Related to Government Regulation

1. 22Although the FDA granted Breakthrough Device Designation status to our ReBoot device, this designation does not guarantee regulatory clearance, or a speedier clearance timeline
2. 23U.S. healthcare reform measures and other potential legislative initiatives could adversely affect our business
3. 24Our devices are subject to the FDA’s regulations pertaining to marketing and promotional communications, among others. Failure to comply with such regulations may give rise to a number of potential FDA enforcement actions, any of which could have a material adverse effect on our business
4. 25We are subject to extensive governmental regulations relating to the manufacturing, labeling, and marketing of our products, and a failure to comply with such regulations could lead to withdrawal or recall of our products from the market
5. 26If we or our third-party manufacturers fail to comply with the FDA’s Quality System Regulation, or QSR, our manufacturing operations could be interrupted
6. 27pursuit of criminal prosecution
7. 28We are subject to various laws and regulations, including “fraud and abuse” laws and anti-bribery laws, which, if violated, could subject us to substantial penalties
8. 29If we are found to have violated laws protecting the confidentiality of patient health information, we could be subject to civil or criminal penalties, which could increase our liabilities and harm our reputation or our business

Risks Related to Our Intellectual Property and Information Technology

1. 30Our success depends in part on our ability to obtain and maintain protection for the intellectual property relating to or incorporated into our products
2. 31Our patents and proprietary technology and processes may not provide us with a competitive advantage
3. 32We are not able to protect our intellectual property rights in all countries
4. 33We may be subject to patent infringement claims, which could result in substantial costs and liability and prevent us from commercializing our current and future products
5. 34We rely on trademark protection to distinguish our products from the products of our competitors
6. 35We may be subject to damages resulting from claims that our employees or we have wrongfully used or disclosed alleged trade secrets of their former employers

Risks Related to Ownership of Our Ordinary Shares

1. 36Sales of a substantial number of ordinary shares by us or our large shareholders, certain of whom may have registration rights, or dilutive exercises of a substantial number of warrants by our warrant-holders could adversely affect the value of our ordinary shares
2. 37If we are unable to offer our key management personnel long-term incentive compensation, including options, and restricted stock units, as part of their total compensation package, we may have difficulty retaining such personnel, which would adversely affect our operations and financial performance
3. 38We are a “smaller reporting company” and the reduced reporting requirements applicable to such companies may make our ordinary shares less attractive to investors
4. 39The price of our ordinary shares may be volatile, and you may lose all or part of your investment
5. 40announcements regarding business acquisitions

Risks Related to Our Incorporation and Location in Israel

1. 41Conditions in Israel, including Israel's wars against Hamas and other terrorist organizations in the Gaza Strip and against Hezbollah on Israel's northern border, may materially and adversely affect our business and results of operations
2. 42Many of our employees and independent contractors who reside in Israel are required to perform military reserve duty, which may disrupt their work for us
3. 43Our technology development and quality headquarters and the manufacturing facility for our ReWalk products are located in Israel and, therefore, our results may be adversely affected by economic restrictions imposed on, and political and military instability in, Israel
4. 44Our operations and the operations of our contract manufacturer, Sanmina, may be disrupted as a result of the obligation of Israeli citizens to perform military service
5. 45Our sales may be adversely affected by boycotts of Israel
6. 46The tax benefits that are available to us require us to continue to meet various conditions and may be terminated or reduced in the future, which could increase our costs and taxes
7. 47Furthermore, the consideration available to our shareholders in a future transaction involving the transfer outside of Israel of technology or know-how developed with IIA funding (such as a merger or similar transaction) may be reduced by any amounts that we are required to pay to the IIA
8. 48We may become subject to claims for remuneration or royalties for assigned service invention rights by our employees, which could result in litigation and adversely affect our business
9. 49Provisions of Israeli law and our Articles of Association may delay, prevent, or otherwise impede a merger with, or an acquisition of, us, even when the terms of such a transaction are favorable to us and our shareholders
10. 50Your rights and responsibilities as a shareholder will be governed by Israeli law, which differs in some material respects from the rights and responsibilities of shareholders of U.S. companies
11. 51Our business could be negatively affected as a result of actions of activist shareholders, which could be disruptive and costly and may impact the trading value of our securities

General Risks

1. 52Exchange rate fluctuations between the U.S. dollar, the euro and the NIS may negatively affect our earnings
2. 53Our operations also could be adversely affected if we are unable to effectively hedge against currency fluctuations in the future
3. 54We are subject to certain regulatory regimes that may affect the way that we conduct business internationally, and our failure to comply with applicable laws and regulations could materially adversely affect our reputation and result in penalties and increased costs
4. 55Our business may be materially affected by changes to fiscal and tax policies. Potentially negative or unexpected tax consequences of these policies, or the uncertainty surrounding their potential effects, could adversely affect our results of operations and share price
5. 56If there are significant disruptions in our information technology systems, our business, financial condition, and operating results could be adversely affected
6. 57If we fail to properly manage our anticipated growth, our business could suffer
7. 58We are highly dependent on the knowledge and skills of our senior management, and if we are not successful in attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy
8. 59Shutdowns of the U.S. federal government could materially impair our business and financial condition