Q4 2022 Rewalk Robotics Ltd Earnings Call
Good morning, everyone and welcome to the reward robotics fourth quarter earnings Conference call.
All participants will be in a listen only mode.
Do you need assistance. Please single conference specialist by crushing the Starkey followed by zero.
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At this time I'd like to turn the conference call over to Mike Wallace Chief Financial Officer Surf. Please go ahead.
Thanks, Jamie.
Good morning, and welcome to Reebok Robotics fourth quarter and full year 2022 earnings call him, Mike Wallace re walk robotics, Chief Financial Officer in with me on the call or <unk>, <unk>, Chief Executive Officer, and <unk>, Vice President of Finance.
This morning, we walk issued a press release detailing financial results for the three months and full year ended December 31 2022.
Press release in a webcast of this call can be accessed through the Investor Relations section of the <unk> website at <unk> Dot com.
Before we get started I would like to remind everyone that any statements made today's conference call that expressly beliefs expectation projection forecast anticipation or intent regarding future events and the company's future performance may be considered forward looking statements as defined by the private Securities Litigation Reform Act. These forward looking statements are based on.
Information available the Reebok management as of today.
<unk> and uncertainties, including those noted in our press release and reworks filings with the SEC.
Such forward looking statements are not guarantees of future performance.
Actual results may differ materially from those projected in the forward looking statements.
<unk>, specifically disclaims any intent or obligation to update these forward looking statements, except as required by law.
A replay will be available shortly after the completion of the call accessible from the dial in information in today's press release, the archived webcast will be available in the Investor Relations section of the company's web site.
For the benefit of those who may be listening to the replay or archived webcast. This call was held in recorded on February 23rd 2022, 2023, excuse me [laughter] since that day, we walk maybe may have made subsequent announcements related to the topics discussed. So please reference the company's most recent press releases and SEC filings.
For the most up to date information.
With that I'll turn the call over to Reeboks CEO , Larry just in ski.
Thank you Mike.
Good morning, Thank you for joining us today.
We closed 2022 with positive results in Q4, and more importantly, with progress in each of our major areas of focus to drive the business over the next three years.
The goals of 2022 or to move forward with CMS.
To expand acceptance of direct supply in Germany.
To improve the reward system by adding clued in stair climbing features in the U S and with an advanced model the reward that can improve the user experience.
And to identify additional product offerings to build our critical and strategic math that improves our financial performance.
Sales and 2421 $8 million driven by new VA activity post COVID-19 the.
The provision of systems from direct supply acceptance in Germany, and the growth with the distributed Monocycle product.
The mile cycle is an excellent example, the efficiency and value of an adjacent offering and a model for adding more products.
Mike will address our results further in the financial discussion.
During 2022, we requested a benefit category in the public hearings with the healthcare common procedure coding systems noticed <unk> under our established coverage.
CMS has not yet provided the category in pricing, but instructed us to begin the process of some of the cases.
The first Medicare patient received their system during Q4 and has completed their training Burger.
Category and pricing are still in processing with the Medicare administrative contractor the Mac.
We are now moving ahead with multiple patient submissions and building the required infrastructure to replicate this for a large number of patients on an ongoing basis.
In November farmer, the second largest statutory health insurer PSA Jai in Germany elected to adopt direct supply and withdrew their federal Court Social Court challenge.
Immediately supplied the individual from the case with the reward system and have moved for others forward under the direct supply approach.
Our initial submission to the U S FDA to expand access for the disabled community by adding stare and curved function was reviewed and we received questions in the form of an additional information request for the submission.
Among the questions was a request for usability data.
As per new FDA guidelines, we promptly setup and conducted the required study and this additional information was subsequently submitted to the FDA for consideration.
In parallel we also conducted a similar study would be advanced generation of the reward system and we'll include that information in that submission.
The next generation of the reward system includes additional user controls.
Provision of additional data and utilization for the user and care providers and enhanced longer cycle batteries system and other design features requested by users over the past few years.
Over the course of 2022, we considered a number of significant number of past to increase our critical mass and to develop a long term strategic mass.
<unk> goal is to add products that fit within the neuro rehabilitation segment and that are adjacent to our call points within the clinics and in the home community after connect treatment or training is completed.
With the emphasis on financial value, we're focused on product lines that will be accretive to our financial position in the 12 months or less cycle offer leverage and synergy and operational costs and contribute and will contribute to achieving a breakeven profitable position with our current capital.
And I'd like to turn the call over to Mike per view of financial details Mike.
Thanks, Larry.
For most of my discussion of the financial results I am going to focus on the queue for performance as our press release and 10-K address the annual results for the fourth quarter of 2022 re walk reported revenue of $2.2 million up zero point $9 million or 75% as compared to $1.2 million in the fourth quarter of 2021.
The increase in quarterly revenue was a result of improved sales performance across product lines and geographies for our core exoskeleton product line, we experienced growth in volumes in both the us and Y-you both from a year over year standpoint versus Q4, 21, and the sequential basis from Q3 22.
We also had strong performance in queue for from our distributed Biocycle Fas products.
We market these as an exclusive distributor to us rehabilitation clinics, VA hospitals and to veterans for home use since we started distributing this product line in 2000 2000, 2020, we have steadily grown it and achieve revenue of over half a million dollars in queue for marking by far our highest quarterly performance.
<unk> for this product line.
I also want to briefly comment on the annual revenue performance for the full year 2022, we achieved revenue with $5.5 million as opposed to $6.0 million for the full year 2021. The decline in revenue as a result of two factors first in 2021 with a large one time multiple units shipment to an academic medical center that was at the park.
<unk> from a typical sales and which did not reoccur in 2022.
Second during 2022, we had a significant foreign exchange headwind due to the erosion of the Euro dollar exchange rate.
Excluding the impact of these two factors revenue would have increased by 10% in 2022, reflecting growth in our underlying based business.
Now I will transition to our pipeline with increased revenue performance in queue for we succeeded in converting some of our near term opportunities in our pipeline to revenue during.
During the first quarter of 2023, we will focus our efforts on adding to our commercial pipeline in order to lay the foundation for growth. In 2023. These efforts include generate more leads and our traditional reimbursement market segments such as in the U S for individuals covered by the VA or selected workers compensation insurance and in Germany for individuals covered under the German health.
Care system Adair.
Additionally, we are focusing a great deal of resources and planning on an anticipated future new market segment individuals who are Medicare beneficiaries within our traditional market segments for the reward product line. The current pipeline of actor rentals consists of 16 cases, including 13 in Germany in <unk> VA rentals in the U S are overall number of <unk>.
Purses and process currently sits at 65 with 49 in Germany and 16 in the U S.
Importantly, these pipeline figures do not include cases that would be eligible for Medicare reimbursement since although CMS is established Medicare coverage for Exoskeletons CMS is still in the process of establishing a benefit category designation under which we can be reimbursed.
The initial claim that we filed back in November is set in motion process, which we believe will create a mechanism for us to be reimbursed by Medicare in the near future. If we've successfully worked with with CMS to establish an acceptable reimbursement mechanism, we expect to build a pipeline of Medicare eligible patients, which could meaningfully supplement our future pipeline volumes.
Okay, turning to margins from Q for our queue for 22 gross profit was zero point $7 million or 38% of revenue up 4.3 percentage points as compared to zero point $3 million or 26.5% of revenue in queue for 21. This.
This increase was mainly driven by the impact of higher revenue volumes leveraging our fixed production costs. During Q4, 2002, we applied and impairment in reserve against certain electronic components in a restore inventory due to the potential obsolescence of these parts. If we exclude the impact of this non-cash reserved gross profit would have been one $2 million or 53.
9% of revenue in Q4.
Operating expenses in queue for where $5 7 million up $1.5 million or 36% as compared to $4 $2 million in Q4 21.
Within R&D spending increased zero point $4 million or 59%, primarily due to higher spending on professional services related to the development products for new product introductions expected over the next 12 months.
Selling and marketing spending increased zero point $8 million or 44%, primarily due to hire consulting fees associated with the CMS reimbursement progress.
And greater commercial activity is COVID-19 related restrictions are lifted <unk>.
Including Tradeshow travel and personnel related expenses.
General and administrative expenses grew zero point $3 million or 17% as compared to zero.
As compared to 20 Q4 21.
But did declined sequentially from Q3 hundred 22 as the last of the professional services expenses associated with expanded 2022 proxy process did not carry over into Q4.
Our net loss for Q4, 22 was $5 $3 million or nine per share as compared to a net loss of $3 $9 million or six cents per share in Q4 21.
Or non-GAAP net loss for Q4 hundred 22 was $4 $9 million or eight per share as compared to $3.6 million or six cents per share in Q4 21.
We ended the quarter with $67.9 million in cash and cash equivalents and know that we continue to have a strong balance sheet with resources to fund our organic growth, including our efforts to expand access for Medicare beneficiaries to our reward.
Extra skeletons.
As well as to pursue attractive business development opportunities to distribute or acquire additional complimentary products with which we can build in scale and supplement our growth.
Since the initiation of a share repurchase program in Q3 hundred 22, we have repurchased $3.3 million of stock representing about 6% of total shares issued.
Our initial six month authorization from the Israeli court for the repurchase program expired in January of this year. So we filed a motion with the court for permission to continue with repurchases for a second six month period, and we received approval.
Of this from the court upon exit from our trading blackout two days following the date of this call and the earnings release, we will be eligible once again to repurchase shares and we expect to monitor equity market conditions and evaluate potential buyback activities as needed.
With that I'd like to turn the call back to Larry for further comments.
Thank you Mike.
Our goals for 2023 or one to achieve sales growth via our CMS and be activity, along with adding more commercial in Germany.
And Germany to to expand our product offering through distribution and acquisition.
And to leverage these activities to move towards that breakeven profitable operations with our current capital.
The internal sales growth will build upon the 2022 progress on direct supply in Germany.
With the placement of systems with U S. Medicare program with CMS and with expansion to more VA centers.
Other growth drivers will be technical and regulatory advancements of the re walk exoskeleton an expansion of the company through the addition of product lines.
To measure our progress in 2023, I have seven areas I would like to highlight.
Number one <unk>.
Expansion of CMS case emissions, we are building our infrastructure for qualifying and processing claims within within the expected requirements of the regional Max with CMS. These are extensive submissions to ensure patient selection is optimal to become successful we walkers.
This approach will benefit the user.
CMS other insurers and the company was successful use of the product.
We will target between 35 to 50 CMS submissions in 2023, when a building an infrastructure to expand that significantly in 2024 and 2025.
Until late 2022 R. U S coverage was limited to the VA, ESOP, which comprised approximately 10% of the spinal cord injury market.
Spinal cord injury occurs at a younger population in five years post injury approximately 39%.
Of the spinal cord injury market is covered under Medicare.
And another $25, 2% are covered under Medicaid.
We also anticipate the progress to CMS will be considered by private payers and we will begin contacts with private insurers as the market develops.
These activities allow us to develop this market.
The new access to a larger audience.
As an example, many conditions we speak with have been unwilling to write a prescription for a product that was unlikely to be accessible via coverage to the individual.
With coverage expanding through CMS and others.
Access to this ichnology is becoming realistic which will allow the development were fluorine further patients who who want to emulate with an exoskeleton system.
We currently have over 170 previously screened CMS leads.
And quality <unk> qualified for submissions.
Our lead base was very limited in the pandemic period. As this population is a high risk group, we will now seek to expand our lead gathering efforts through digital promotion Tradeshows and by building referral efforts with key opinion leaders.
Number two expansion of training centers.
As the resources NBA medical centers the V Max.
Are becoming increasingly active post COVID-19.
We are working closely with the VA to expand both the number of the Max that can actively qualify and conduct or manage exoskeleton training in the use of qualified and contracted community based provider groups that may be more conveniently geographic.
For veterans there are currently three active reliable centers indicted states and our goal is to expand that by at least six over the remainder of the calendar year 2023.
Number three.
In Germany, we will seek to add additional groups to our direct supply contracts now that we are in the where post the acceptance of the direct supply from the court proceedings.
We also must reestablish our lead base post COVID-19 going to shift towards digital promotion working with local societies and the reemergence of Tradeshows in full in 2023.
Number four product acquisition.
We have identified product lines and entities that have interest in that would financially benefit from operating within a consolidated enterprise infrastructure focused on neural rehabilitation.
The profile for this strategy is to work with adjacent accretive advanced technologies that support the clinics and the patient community.
These considerations of a high priority and we have a banking partner assisting in the analysis transaction considerations and completing these efforts. We report on these initiatives as they reach conclusions.
Number five.
Ganic product improvements.
A significant user limitation exists when a reward for his walk in and they've been encounter occurred our stairs that prevents access.
Examples include visiting a friend's home with steps or stairs or locations, where curb cut outs ramps, our elevators or not available.
Addition of the curb stare function is under review at the FDA from our submission in 2002.
We have responded in full to the Fda's additional information request and or prospectively preparing training programs for launch in 2000 2003.
This is subject to completing a successful FDA review.
On the next advancements of the reward system. We are in Finalization of late stage development in final preparation for FDA submission, we expect to submit this for FDA review and CE review in the second half of 2023.
Number six day.
Data expansion.
For our stroke technology designs were supporting the independent study of a comparison of the motor and cable driven system of a plant reflection focus technology to the existing ankle.
Technologies, commonly known as <unk>.
Are targeted based technology for a home community used design has been named the reboot.
We have previously been granted a breakthrough designation that would have included some Medicare coverage at that time.
That program has since been deferred by the U S government and replacement programs are being considered but we no longer expect that path is likely coverage badly for this innovative design.
As we have conducted a parallel reimbursement review we believe this design may be covered within existing codes. If our data demonstrates the benefit of this technical innovation over in AFL.
This initial study as a pilot to support consideration of a larger company sponsored randomized clinical trial.
For a relaunch Sci product, we supported a grant to the VA considering the medical costs of a reward ambulate or to the medical outcome of a match profile wheelchair user.
That data will be presented and published during 2000 2003.
And number seven.
Financially 2023 includes further investment in reimbursement to complete the submission definitions to provide the processing infrastructure to allow patient access and to provide growth for the company.
In addition, as our mission and position expand we have increased our investment to support Investor relations to broaden the communication and reach to the investment community.
In conclusion.
Our overall direction is to succeed with the core Sci product line is insurance access is more widely accepted and to build both critical and strategic math as a consolidator that will meet the broader needs in the clinic and into community neuro rehabilitation.
We understand and are seeking keep this level of expansion and growth to breakeven profitability on our current cap.
We are going the right direction.
And I wish to thank the team for the results in 2022 and how they are building upon them in 2023.
I also wish to thank our shareholder base for the continued commitment and supporting these life changing technologies and their support as we expand this business in 2023 and 2024.
I look forward to providing further updates during 2000 2003.
At this point operator, we're prepared to take an answer all questions. If we could move to that process.
Hello, Ladies and gentlemen at this time, if you would like to ask a question. Please press star and then one on a touchtone telephone to withdraw your questions. You May press Star and two if you are using a speaker phone. We do ask that you. Please pick up the handset prior to pressing the numbers to ensure the best song.
Quality.
Once again that is star and then one to join the question queue will pause momentarily to some other roster.
And our first question today comes from.
Slammed the caller.
Ramonica from RFC Wainwright. Please go ahead with your question.
Thank you and this is RK from Pennsylvania.
So.
Good morning, gentlemen, looks like fantastic fourth quarter.
And <unk>.
Other than that.
Interest in 23 as well.
A lotta you've stated and a seven different.
You are.
Hoping to execute or is that with the rest of the year.
So.
Given.
Given that two positives from last year, especially.
From the CMS and also from the Chairman Court Kennedy just highlights uhm off.
Among the progress that you are making beyond.
Initial success in defense.
And a renewed subdue submitted one application to the Mac.
How are you.
Right now they're progressing.
As the progress in creating an app that you can.
Go forward with our national submissions and on the gentleman caught a side and I just had the.
Insurance company over there.
As.
Given.
Has started working through the applications.
In short lives.
How is that going forward.
Expectations in terms of revenue Brian .
That.
From that particular worker's comp.
Okay, I will notify the long question.
Although unquestionably I took notes so I think I'll remember everything or at least most of it.
And our first yes, it was a good quarter and the seven targets. We believe are very achievable for us. This year. The things that are highlighted the back end and I'll update those every quarter.
Regarding.
The Mac process and the progress.
So many of the first cases, the hardest because you're interpreting and with everything and try to establish the standards for their case.
And we use that as a base for okay, how to construct the rest of them.
And that's really been a lot of infrastructure building and also to make sure that.
We comply in every way as a Medicare supplier, we are an accredited supplier and that requires everything from everything must be handled perfectly relative to HIPAA.
Compliance and how we're handling data and in the systems that we have so there was a lot of internal auditing preparation.
For the go live mindset, and that's really the great value of case, one because case, one we put more effort in than we probably put in anything for a long time.
Relative to a single case too.
To make sure we have that structure, because we're not trying to set this up or just one case, we're trying to set it up to do as I said 35 to 50. This year. So it's been a process development.
So from an internal side, we've come a long way.
The <unk>.
Mac sighed.
The case is moving forward, but I don't have anything I can report at this time.
The most important thing is the user has their system they've completed their training.
And the completion of the process is now being worked with.
With them.
So that's that's as much as I can give you on the first part.
The second part of the German court.
The.
We action by bomber was what we'd hoped it would be in that the the individuals who was the courtly Scottish unities walking and so that is a big success released if you're the view of the individual and then the other cases they had that were.
Open have been <unk>.
Quickly move forward, so that tells us that yes, they completely accepted what they said they would do.
The contract process in Germany is very important to us and it is sort of an annualized are.
Periodic thing and as we are now redoing our contracts with many groups relative to things such as pricing and some other details that that change year over year.
We would hope to bring some of these other groups that are not under contract under contracts. So that is our goal and that is of the conversations that are underway.
And between now and sometime in queue to those should reach a conclusion with them either joining or not join in the contracts.
And fundamentally there is a benefit to them and to us for them to be under contract.
But they still have to make decision to do it and it just makes it easier to process.
So the German one is.
Moving also forward in a way that we believe will help us for the 2023 revenue.
Thanks for that Larry and.
This court case, where bomber.
<unk> walked away from.
Okay.
That that.
And may as a strong precedent.
The 10, Germany's worker's comp.
So that now.
And now and now you have the potential for success with other workers comp.
If that's the case or is it still going to be individually.
Each worker's comp insurance can make a decision.
Independent of what happened in the bombers Court case.
One quick clarity.
Bomber is a statutory health insurers so it's the.
More of the general public insurance and private insurance that go through their German health system, B Workman's comp and Germany is the D J U b and.
And we have a contract with them so our workmen's comp in Germany, as well established relative to the statutory health insurers environment, which very your question was.
As they will make a decision as to whether the end of the contract.
And other.
Oops typically have a decision whether or not they joined the contract.
But we do not believe there is a strong basis for any of them to challenge whether or not if they supply these whether they're underact supply or not.
There is is Barbara withdrew and accepted.
There is no formal court case decisions. So I can't say, there's a court case that as a precedent however, because that one had gone so far and the number 123 insurers in Germany now.
Have all accepted this would be difficult for others to claim that it is not the standard in the industry.
But I can't say, there's a specific precedent that that answers your question.
Okay. Thank you I have one more two part question and then I'll step back into line.
In terms of the year expansion that you're talking about the training center expansion.
But.
Is that more color you can provide us and in that sense.
I believe.
My notes right. There are 16 cases in rentals.
Are there I'm guessing most of them are.
Right.
This should.
Should we expect that to increase to continue to expand it to training centers and the second part of the question.
Bit different on the miles high call product distribution, which was strong in the queue for.
Increasing.
And then have a middleman.
Is that something that can.
And sustainable or.
Or 2003 and beyond or is this one of those one of things that you have.
Have to wait and watch at the quarters progress.
Okay.
Thank you I'll start with the VA.
We still have a good number of veterans waiting in line for training or waiting to move through processing at the VA and a lot of the limitation has been around either available personnel to train.
Or geographic location.
So this expansion with the VA presently we have three really reliable centers that they can take care of patients, but that only covers three parts of the United States and they're mostly in the south.
Central South and southeast.
Which we need to expand it more geographically so the veterans and places that do not have access are there and what we've got in in one of our more recent successes was with the.
Program, where the community care networks were able to get a VA to cover it but the training was done locally at a community character ever. So this expansion of six additional centers that are utilizing it will provide us the ability to get two more patients because.
We just have patients that are in locations that can not currently get their training done.
And what's different now <unk>.
Post COVID-19.
With very few exceptions are fully reopened and we have found and much more.
Interested in moving with these community care networks, where they didn't have the resource are the people to do it.
So.
I think as if you are a veteran now is a good time to go back and reach to these groups, where you will be able to get training and move to the process if you're qualified patient.
On the mile cycle first it's a really good product and it works.
Lee for the exact same patience, we already colon.
Solely reward user is very commonly also.
Benefit with the mind cycle.
And the VA covers.
So we do believe it's sustainable I don't know, what the exact quarter to quarter number, but the year over year product line.
Has very good potential an expectation that it would grow.
And that's the type of products that we think fit nicely with the so sustain.
Sustainable, yes on an annual basis.
Thank you. Thank you very much for that lie I appreciate that.
Our next question comes from Martin Polack from KMT are please go ahead with your question.
Yes, just several questions I'll kind of break it down into couple more about the.
Actual Germany.
Court decision and then maybe talk about a few financial ramifications of actually what we're seeing is numbers on a German court is a way for you to describe if not immediately.
The number of leads that you would be expected.
Sure it's covered <unk> now.
You would think that the gym core business driven business would be significantly higher multiples higher than what it is today.
So maybe it's a matter of interest is describing that via weeds and what could end up.
Being a 2425% sales rep.
Revenue type number.
There'll be very useful to know because I think that decision was not well received by the marketplace.
Have very little impact.
The company's stock price factor.
Fact overall the stock declined.
Somewhat after that period. So please explain that Germany court decision.
And it's long term impact.
Okay I'll start with that.
Firstly, the German court case was withdrawn so there wasn't a formal decision, but it was clear.
Clear acceptance by the number to ensure.
So this is a good outcome, especially for the patient.
The impact of that as we saw the court cases that were in line for direct supplied direct.
Process through so that's that's a good sign now I think you've hit the most important point, what how does that translate to Leeds and growth for 23 24 25.
And we have not done well in Leeds with Germany. During the Covid period, we literally were in the desert for most of the last two years relative to leads with no tradeshows and a population that has.
It has a higher risk during the COVID-19 periods. So we've got to rebuild that lead.
Element and that has a lot of our early focus to get those leads go into getting get these cases back into the insurers at much higher numbers. So our early focus in 2023 and 2024 is and we think we're going to have tradeshows in full again.
Is to build back to the lead levels we saw.
Pandemic.
When those would translate into.
Things that are more easily.
Process through the insurers with the acceptance of direct supply.
So the impact is going to be there, but it's going to be there more later this year or cycle time for most of these patients still remains.
Six to 12 months dependent on the specifics of all the individuals from the time, they think about it to the time they administrating.
So that building of leads this year will be an important measurement will impact sales. Some this year, but law impact sales that if we do it effectively more in the out years.
Let's deal with some of the financial.
The application of what we're saying.
2022, close with about 21 million operating expenses.
Broken down between R&D marketing.
Sales and SG&A.
You look back at 2021.
Actually 19, you're running about $13 million, which explained why.
As bad as time viewer.
January an operating loss of $12 million to $13 million.
Per year.
We saw.
Looking at <unk>.
Considerably higher loss.
Which means the cash is considerable.
So as we look forward if you could talk about maybe the absolute type number what is SG&A on a normalized basis.
<unk> forward with your plans.
Clearly you have plans to grow.
A number of those.
[noise] expenses may be rising but.
Are you likely he'd be out running revenues during that time, so we should realistically expect.
Further losses.
This year, even worse and possibly 2022 I mean.
Really lucky.
How you think about SG&A because you also talk about ultimately.
Model that can go to the breakeven.
Without an acquisition.
And is your model model that can actually do that and when do you expect that to happen.
There's parts of that for me and parts of that for Mike I think looking backward on some of the operating expenses or what might start there and I'll pick up on the other side.
Yeah. So.
So I would say that.
We did see an increase in and spend in 2022 versus 2021 and much of that was related to.
Several factors one was.
Gearing up and entering into this process of submitting claims to Medicare as.
Larry are described.
Quite.
For the first time, that's that's quite a costly and time consuming process to do it correctly and so we had to invest in resources to be able to be in a position to be able to do that another factor was that we were completing.
Several product improvements in new product for new product introductions in 2023 and.
Probably early 2024, so there was some a product improvements going on so there is some R&D spend that increased as a result of.
Of that factor, so I would say that those with the two primary things were really gearing up commercially four and then the third thing was was gearing up commercially for being able to sell to an expanded market being the Medicare market. In addition to the existing markets. We sell now so so yes, there was an increase in investment between 2000.
21, and 22, but that's all related to these key priorities that we've talked about.
And it's gotten to this point now where we really feel like we're we're very close to the finish line or very close to the goal line. If you want to use a football analogy. So.
I would expect that.
Once we can <unk>.
Normalized the process and increase the volumes of patient submissions to to Medicare that the revenue is going to build off of that and these investments will will begin to pay off.
Are you suggesting that.
New dorm room for.
The SG&A may in fact be even lower going forward because of these kind of one time situations that you know.
We had last year.
It would be great to see that because clearly.
If you continue to be at this level, even higher you would have to have.
Different growth in revenues.
Just to be able to maintain.
Certainly not burn more cash and Youre doing already.
So the only other question is I will say what I felt.
Quite positive in these results in terms of the the.
The cash uses I C for this quarter was considerably lower considering you said.
$3.3 million or extent of spend on the share repurchase was that what you said.
I think I saw that in accounting.
Q.
Accumulative amount yes.
Yes.
But.
Galaxy, the cash flow statement, but it looked to me cash <unk>.
Much better than we saw in the previous.
Quarter of two.
Cashews, which was more like $3 million, maybe for the quarter.
Well, we had we had significant also expenses and Q2 and Q3 related to the expanded proxy challenge that we had signed that unfortunately, the required us to devote divert a lot of resources.
That otherwise could have been spent on on growing the business or preserving that capital. So.
It is also another factor that's that drove some of the increase from 21% to 22 that we hope will not repeat itself.
So would you say that is looking at cash burn, which clearly at this point is just.
The thing that's that's going to continue.
Hope is that we're not going to be trying to get to the kind of numbers. We saw a 22 overall, but do you think they call it sustainable.
Cash use.
Even share repurchases.
Could be about 12 $13 million, that's more likely.
To be the kind of number that you're thinking about.
Annually, we back to that kind of earlier level.
That you've done a lot of that's forward spending already.
I mean, there's a big difference in terms of how quickly this caches.
It's going away.
Yeah I think.
Until until we get a better sense for the ramp.
Timing and are anticipated medic.
Medicare.
Coverage and benefit establishment and the ramp associated with that benefit it's a little premature for us at this stage to comment on on full year numbers, but I would say that certainly we will be exiting the year and Ah.
We anticipate will be exiting the year in a much better position than we are right now because we will have that expanded market.
With that much larger revenue potential.
Last question, just maybe this morlock Larry.
Outlook outlook.
In our previous quarters by the last one was based on what you were saying.
Revenue growth.
Would continue.
And then last last quarter, apparently that does not happen.
When you think about full year outlook with all of these things.
Going on with all the opportunities.
Is there any reason why you wouldn't be able to make it more clear statement.
Growth from 2023.
And at the same time, just make a comment about acquisition.
Opportunities it seems that.
And acquisition another vertical for the company is essentially even if it's an adjacent speak clearly would be great but.
The ability to.
Integrated company provide some stable.
Revenues and have your income.
Would make a lot of sense.
Quite a bit of sense, while you're building this tremendous growth engine, which I think is.
Very powerful.
But you know it.
They still take two or three years for us to see the full effect so why not in the interim.
Really get down to an acquisition is there one or one or two that you're actually dealing with our negotiating.
Because I think we were led to understand that previous calls.
Now that's a very big.
Factor in your expectations.
Walking down an acquisition.
Using the current cash balance that you have.
Okay.
Yes, yes.
Try to comment properly on these for Ya.
2000 twenty-three growth.
The biggest variable to us as the timing of wind CMS will process and pay.
So are a lot of our focus this year is filled a funnel. That's why you want to do the 35 to 50 submissions.
I believe.
Placed one last year and that's one in our whole history relative to CMS that was the first one so this year there'll be up to another 49 more <unk>.
How many of those may make it or not make it into through the process. We.
We can't forecast that yet but.
There is reason to be optimistic, but I just don't have any timelines that I can give you out of the final details with CMS.
At this point.
And the acquisition side.
When we look at the infrastructure we built.
That can manage everything from the complexity of Medicare claims and the complexity of a product for spinal cord injury.
We have a particularly strong team and.
And what we learned under adding a product with like the mile cycle through the distribution agreement was that.
We were able to very effectively do that and it helped.
Leveraged our cost so what we're looking to do part of this is we must grow Sci we will grow Sci we've got all the pieces go in the right way.
Putting some things parallel to that.
Makes a great deal of business sets.
We have put in.
Excessive amount of effort and.
Spoken with many potential groups and the landscape, but there's nothing I can comment more on that at this time.
That.
We have interest in others have interest we've got to see if something makes sense at the end of the day and.
And will report it.
We get there.
Because essentially and with regard to outlook at this point.
Not really.
So look good, but you're not committing yourself too.
A growth outlook for 2023 is that the way to understand your comments.
Just don't want to talk about because.
Okay.
Wow.
Try to be more specific we will grow we believe.
Our numbers will be bigger this year than last year, and we have a particular goal in our in our plan, but we don't.
Don't give public guidance on it.
The question is how much we grow and how quickly.
But this will be a growth year.
Very cool.
Alright. Thank you appreciate it.
Okay. Thank you Marty.
And I would just once again, if you would like to ask a question. Please press star anyone.
And our next question comes from Charles Maccario from G. T. N. Please go ahead with your question.
Yes. Thank you for taking my call I appreciate it an excellent job on actually the revenue and actually I turn the company around.
Again, the people out there the handicapped community is probably be happy that you guys are doing a great job and everything.
Question comes from the F. D. A five can you guys have sitting over there at the.
The FDA.
Does that one if it does get approved again I hope it does what kind of an impact will that put on the product and the sales going forward and is there any competitors out there that argues something similar to what is already out there in the marketplace.
Well first the biggest impact as the users given access to places they can't go.
And.
Why why we're here.
What will it do for sales I believe as we are expanding particularly with CMS.
That is a innovative feature and why we were given a breakthrough designation by FDA for that stairs climbing.
Component it should have an impact and help us.
For more patients through the system <unk>.
Competitively there is not a product.
In the world other than ours that can do this.
So it puts us also in a competitive position that is advantageous for the home user that months that type of access.
Excellent. Thank you and another quick question will be I know Brooks rehabilitation has been a <unk> since they have a lot of work with it.
What's the status with them or they start pushing since out there working with it and also have you guys. Instead of leasing some of the some clout to some of the training plan is to get the <unk>.
Now get more of the public market in mind on that.
I'm going to ask on the first part of your question on the leasing foods that has been an option we have offered points.
Point in time and that May expand as we get more training centers going under CMS, because I think that would work. The first part of your question I wasn't sure who you were referencing I didn't hear that clearly it was that Brooks rehabilitation I believe they are.
Okay.
Yeah are they still doing it and adding standing at a stop watching it.
I haven't worked with Brooks recently, they've been a great center.
I know some really good outcomes out of out of there I will ask my local rep as to what they've done last few weeks or months, but as far as I know they are still in great standing and or an outstanding center.
I know a couple of the patients in fact, one of them was here and helped us in our usability studies recently and.
They were well trained.
Alright.
Okay.
No no no you didn't need to enact against the final question is the acquisitions I know you had a lot of it.
You guys looking at the acquisitions outside I know, you've gotta be selective and obviously I note competitive marketplace out there. It seems like there's a coupla 123 of the big plays out.
<unk> <unk> <unk> <unk>.
In the marketplace much in that.
The acquisition you guys looking for something at some of what the product is that you're looking for something totally different I mean to add to your product line.
We believe we are the market leader with the exoskeleton in the developed we have developments, we have going around it for Sci.
Will be stay ahead of our competition. So we're not looking to acquire something that's really that close in but we.
We are in the clinics for spinal cord injury patients for stroke patients for Ms patients and companies that have products that can help those populations. We have a good infrastructure to help them be more successful in selling those are more of the things. We're looking at so we're trying to stay in the neighborhood and the universe, which we understand and have talented.
But we believe we already have a market leading technology and can keep advancing that if we can build the referral network and the market creation side of this through access. So we're not looking to add more exoskeletons for Sci, but we certainly want to help other patients that in this clinic community that go home.
I can't be more specific than that but those are the types of things. We're looking for well congratulations I think companies and answering the best shape. It's been in in a long time and I think you guys are going in the right direction. So keep up all the great work and thanks for helping all the patients out there.
Thank you thanks for the comments thank you.
And ladies and gentlemen, with that and showing our additional questions I'd like to turn the floor back over to the management team for any closing remarks.
Jamie Thank you very much for the call for everybody that joined US today I appreciate it and for anyone who listens to this please feel free to come forward with us and ask questions.
As I have indicated I laid out seven goals for this year, we're going to report on those quarterly.
So you can measure how we're doing in the progress that we're making so thank you for your time and please reach out if you have other questions is we are going to expand our outreach to our investors going forward.
And ladies and gentlemen, with that will end today's presentation. We thank you for joining you may now disconnect your lines.
Alright.