ReWalk Robotics Ltd. Q1 2023 Earnings Call
Speaker 1: And that that C.
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Speaker 2: Please note that this event is being recorded today. I would now like to turn the conference over the Chief Financial Officer Mike Lawless. Please go ahead, sir.
Speaker 3: Thanks, Joe. Good morning and welcome to ReWalk Robotics' first quarter 2020 to the earnings call. Unlike Lawless, ReWalk Robotics Chief Financial Officer, and with me on today's call is Larry Jizinski, ReWalk's Chief Executive Officer.
Speaker 3: Earlier this morning, ReWalk issued a press release detailing financial results for the three months ended March 31, 2023. The press release and a webcast of this call can be accessed through the Investor Relations section of the ReWalk website at rewalk.com.
Speaker 3: Before we get started, I'd like to remind everyone that any statements made on today's conference call that express a belief, expectation, projection, forecast, anticipation, or intent regarding future events in the company's future performance may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act.
Speaker 3: These forward-looking statements are based on information available to rewalk management as of today. It involved risks and uncertainties, including those noted in our press release and rewalk's filings with the SEC.
Speaker 3: Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from those projected in the forward-looking statements.
Speaker 3: Rewok specifically disclaims any intent or obligation to update these four looking statements, whether as a result of new information, future developments or otherwise, except as required by law.
Speaker 3: A replay will be available shortly after 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 website.
Speaker 3: For the benefit of those who may be listening to the replay or the archived webcast, this call was held and recorded on May 11, 2023. Since that date, RE-WALK may have made subsequent announcements related to topics discussed. So please reference the company's most recent press releases.
Speaker 3: and SEC filings for the most up-to-date information. With that, I'll turn the call over to Rewox CEO Larry Jizinski.
Speaker 3: for the most up-to-date information. With that, I'll turn the call over to Rewox CEO , Larry Gizinski. Thanks, Mike.
Speaker 4: Welcome, everyone. We appreciate your time with us today.
Speaker 4: We achieved positive results in Q1 and specifically
Speaker 4: had continued progress on each of our major areas of focus to drive the business over the next three years.
Speaker 4: We are on track in all respects.
Speaker 4: The goals remain to move forward with the Centers for Medicare and Medicaid Services, CMS, to rebuild our active case submission base post-COVID with the acceptance of the state court ruling for direct supply in Germany, to advance the design of the RE-WALK personal exoskeleton to further improve the user experience.
Speaker 4: and to identify additional product offerings to build our critical and
Speaker 4: Sales in Q1 were 1.23 million in line with internal expectations and in line to support your growth driven over the second half of 2023.
Speaker 4: The United States has expanded cases with the VA, and Germany had a significant increase in submissions in Q1, which will translate to improved second-half 2023 sales. Cases were also in line with internal expectations.
Speaker 4: Michael addresses further in the financial results section.
Speaker 4: further in the financial results section.
Speaker 4: Our ongoing efforts with CMS to expand coverage of exoskeletons for Medicare beneficiaries is a key element of our strategic path and a defining point for the exoskeleton industry. We have gained widespread acceptance from SCI societies and key companies in this market.
Speaker 4: Creating a repeatable process to secure payment for the ReWalk device for Medicare beneficiaries is an essential priority for us. The Medicare SEI population is the largest population segment of individuals who could benefit from this technology and therefore our single largest potential market segment on
Speaker 4: in our single largest potential market, the United States.
Speaker 4: The ReWALK Personal Exoskeleton is innovative, it has been designed as a breakthrough device by the FDA and was cleared through the de novo pathway.
Speaker 4: Being on the leading edge is both an opportunity and a challenge.
Speaker 4: Being on the leading edge is both an opportunity and a challenge. The opportunity is that the value is recognized.
Speaker 4: There are lots of individuals in the federal agencies at the highest levels that are working to help ensure the device is available to patients.
Speaker 4: The challenge is that CMS and its local Medicare administrative contractors, MAX, haven't directly processed anything quite like this previously.
Speaker 4: So the process by which these claims are handled must be created to ensure that payment is consistent and timely.
Speaker 4: The reality is that implementing these new procedures can take time despite the support and guidance that we have continued to receive from leadership within CMS and the MAX.
Speaker 4: And the only way to refine this is to submit claims in order to test the process, to clarify what needs to be clarified, and to fix what needs to be fixed.
Speaker 4: The good news is that we have made significant progress to this point.
Speaker 4: For this strategy, we submitted our first Medicare claim and in Q1, early Q2, has seen advancement and meaningful feedback on this claim.
Speaker 4: As we anticipated, the lack of an established process for submitting claims to the coverage of personal exoskeletons has presented issues that need to be addressed in order for the claim to be paid.
Speaker 4: We receive questions on benefit category, documentation, and pricing methodology.
Speaker 4: We even had some simple administrative challenges for Medicare's claims portal operations. Again, this was to be expected given that this is the first time an exoskeleton claim is moving through the Medicare process.
Speaker 4: Fortunately, both CMS and the MAC involved in this claim have engaged with us to move claim one forward for this beneficiary.
Speaker 4: Importantly, no significant or insurmountable issues have been identified.
Speaker 4: Our strategy to submit one claim to start was purposeful.
Speaker 4: Based upon this experience, we are now ready to submit our next round of claims for additional patient beneficiaries. We aim to submit claims for approximately 10 additional SCI Medicare beneficiaries in Q2, and have received significant positive interest from many more SCI patients and their providers who will be in the queue to follow shortly.
Speaker 4: Overall, navigating a new category and process for payment is more tedious than any of us would like.
Speaker 4: but this is progressing in a meaningful manner.
Speaker 4: We have put a great team together to support this effort and we will be relentless.
Speaker 4: because this truly is in the best interest of both patients and our health care system.
Speaker 4: I am confident that with the support we have received from both CMS leadership and the MACs involved, we will continue to make material progress one step at a time.
Speaker 4: At the same time, we are preparing for the future.
Speaker 4: We have built our organization to enable scaling of our efforts to manage a growing number of claims.
Speaker 4: This includes putting an experienced program manager in place, defining and implementing quality standards and operating procedures to operate as a CMS supplier.
Speaker 4: and adding a medical director with a background in physical medicine and rehabilitation and in CMS claims oversight to help with our upcoming claims preparation.
Speaker 4: We have made progress on all of these initiatives. We will expand this structure further to support increased claims in 2024 and 2025.
Speaker 4: I am confident that the results of our efforts will positively shape the industry in the long term.
Speaker 4: To reiterate again, this is important because over half of all SCI patients are covered by Medicare and Medicaid within five years of injury. So the results of these initiatives will ultimately define beneficiary access to the only technology solution that makes it possible for them to stand.
Speaker 4: walk, ascended decent stairs, and perform activities of daily living in their home and community.
Speaker 4: We also have technical progress in parallel with the CMS MAC processes.
Speaker 4: On March 7th, we announced the achievement of FDA clearance for our STAIRS-enabled rewalk personal exoskeleton.
Speaker 4: This FDA clearance broadens the ability for utilization of the system by removing limits that are a physical reality in areas where people want to walk.
Speaker 4: This FDA clearance broadens the ability for utilization of the system by removing limits that are a physical reality in areas where people want to walk. Those are...
Speaker 4: This is in the home of friends or family where they have steps at the entry in a ramp.
Speaker 4: Areas where there are no curb cutouts on city sidewalks. Or using the front door of a business that has an accessible access around back. Expanding access to everyday walking in everyday environments is a major leap for those who are blocked from too many activities or locations.
Speaker 4: The design includes the softer and controls to ascend or descend steps and curves and enhance structure components of the ankle and thigh to further improve the robustness of the design.
Speaker 4: Our extreme example is Simon Kinley-Sides in England, who achieved a Guinness World Record last year after climbing 1,444 steps in a 51 story building in one day.
Speaker 4: which shows the durability of the system. I congratulate him. Our real focus is everyday life and this FDA clearance offers increased opportunities to experience the benefits of walking in everyday environments, even when those environments contain obstacles such as stairs or curves. We remain active on a seat.
Speaker 4: new opportunities to scale our business in the broader neural rehabilitation market.
Speaker 4: I'd now like to turn the call over to Mike for review of the financial details. Mike?
Speaker 3: Thanks, Larry. As discussed during our last earnings call, the Q422 performance reflected our success in converting near-term opportunities in our pipeline to revenue. As a result, our focus during Q123 was to continue to deliver revenue while adding to our commercial pipeline and lay the foundation for growth in 2023.
Speaker 3: For the first quarter of 2023, we accomplished both of these objectives with solid revenue and an improved pipeline. RE-WALK reported revenue of $1.2 million up $0.4 million, or 40%, in the first quarter of 2023, as compared to $0.9 million in the first quarter of 2022.
Speaker 3: This was in line with our internal budget and we remain on track to our internal growth targets for the fiscal year. The increase in revenue compared to Q122 was a result of improved RE-WALK sales performance in the U.S.
Speaker 3: partially offset by less traction in the EU. We also grew revenue from our distributed product line, the MyoCycle FES training cycles.
Speaker 3: In Q1, 2023 revenue was over $200,000 up 14% versus revenue in Q1, 22.
Speaker 3: The sequential decline versus Q422 we believe to be a result of the timing of trade shows and seasonal buying patterns of our customers. We expect to build sales volumes and miles sequentially as we move through the rest of the year.
Speaker 3: Turning to our pipeline metrics within the current markets for the Reebok product line, which includes individuals covered by the Veterans Administration or Workers' Compensation Insurance in the US and by private insurance in Germany. The current pipeline of active rentals consists of 18 cases, including 14 in Germany, 12 of only insurance and two self pay.
Speaker 3: and four VA rentals.
Speaker 3: Our overall number of cases in process is 71 with 53 in Germany and 14 in the US.
Speaker 3: As a reminder, these pipeline figures do not include cases that would be eligible for Medicare reimbursement since, although we have established Medicare coverage, CMS is still in the process of establishing a benefit category designation under which we can be reimbursed.
Speaker 3: If our progress with CMS successfully results in the establishment of an acceptable reimbursement mechanism and payment rate, we expect to add our list of already identified Medicare eligible patients for inclusion in our future pipeline figures.
Speaker 3: Moving to gross margin, in Q123 our gross profit was $571,000 or 46.4% of revenue, up to 16 percentage points as compared to $265,000 or 30.3% of revenue in Q122. This increase in gross margin was primarily driven by several factors.
Speaker 3: The impact of higher revenue volumes leveraging our fixed production costs, higher average sales prices on the rewalk devices, and reduced freight and overhead expenses. Operating expenses in Q123 were $4.9 million, up 0.4 million or 9% as compared to 4.5 million in Q122.
Speaker 3: services due to the completion of the STAIRS project and the accomplishment of significant milestones on the REWALK 7 project.
Speaker 3: Selling and marketing expenses increased 0.3 million or 14 percent, primarily due to higher consulting fees associated with CMS reimbursement-related activity and travel expenses.
Speaker 3: General administrative expenses increases $0.2 million or 17% due to higher employee-related expenses and professional service fees partially offset by lower insurance costs.
Speaker 3: Our net loss for the first quarter of 2023 was $4.3 million or $0.7 per share as compared to a net loss of $4.4 million or $0.7 per share in the first quarter of 2022.
Speaker 3: We ended the quarter with $61.9 million of cash in equivalents and no debt. Our operating cash usage in Q1 was $4.9 million, which was a decrease from $5.5 million in Q1 of 2022.
Speaker 3: However, this is an increase sequentially from Q422 because the first quarter of each fiscal year is seasonally the highest quarter for cash consumption.
Speaker 3: variable compensation typically occur in Q1.
Speaker 3: We expect quarterly operating cash usage to decline in Q2 and remain lower than Q1 level for the rest of 2023.
Speaker 3: We believe our cash balance provides us ample resources to fund the growth of our existing business, including our efforts to expand reverse and the coverage of the re-walk device, as well as to pursue attractive business development opportunities to acquire additional, complimentary products.
Speaker 3: We believe both of these investment areas are crucial for us to build scale and accelerate our path to profitability.
Speaker 3: During Q123, we were purchased approximately 771,000 shares of $771,000 of re-walk ordinary shares.
Speaker 3: As you may recall, 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, which the court approved.
Speaker 3: We created a new 10b51 plan for the second six month period which automatically repurchases shares when the criteria of the plan are met.
Speaker 3: Now I would like to briefly comment on our financial outlook for Q2 23 in the 4 year 23.
Speaker 3: Based on the current pipeline for re-wok systems, we expect Q2 revenue to be similar to the level in Q1 revenue with growth accelerating in the second half of the year. For the full year 2023, we anticipate revenue growth of approximately 15-20% versus the results in full year 2022.
Speaker 3: Importantly, these outlooks for Q2 and FY23 do not include revenue from sales to Medicare-eligible patients. While we will be shipping more RE-WALK devices to users and submitting claims to Medicare during Q2, as Larry described, these transactions will not contribute to revenue until the MACs begin to process and pay claims.
Speaker 3: Until that process gets underway and we visibility to the processing time table and payment rates, we will continue to exclude the impact of potential Medicare payments from our financial health lawyers. Are you ready?
Speaker 3: With that, I'll turn the call back to Larry for further remarks. Thank you, Mike.
Speaker 4: We laid out our goals for 2023 at the start of the year and I will provide progress on each of them after each quarter.
Speaker 4: To restate the goals, to achieve sales growth via our workman's compensation and VA activity in the United States, along with more contracted insurers in Germany. Number two, to expand our portfolio products through distribution agreements or product line acquisitions.
Speaker 4: And number three, to leverage these activities to move towards break-even, profitable operations with our current capital.
Speaker 4: To measure our progress in Q1, I have seven areas I would like to highlight.
Speaker 4: To measure our progress into you when I have seven areas I would like to highlight.
Speaker 4: Expansion of CMS case submissions. Our processes and infrastructure for qualifying and processing claims is operational to meet our goals in 2023.
Speaker 4: We added experience talent in terms of preparing the pipeline for submissions.
Speaker 4: Expanded clinical experience with recruiting a medical director with significant experience managing CMS claims, who is also a physical medicine and rehabilitation physician, typically noted as a PMNR physician or physiatrist, with clinical experience treating spinal cord injury patients. Our interaction with the CMS...
Speaker 4: key steps that support achieving our goal.
Speaker 4: We have now tested the system, identified the requirements, and streamlined the claims process. Given these critical steps, we expect to have a repeatable system that will expand in 2024.
Speaker 4: Progress with establishing coverage for Medicare benefits is especially meaningful for this population as approximately 30% of U.S. individuals with spinal cord injury are covered under Medicare and another 25% are covered under Medicaid within five years after they're injured.
Speaker 4: Accompanion coverage from Medicare benefits, especially meaningful for this population, as approximately 30% of U.S. individuals spend, according to our covered under Medicare, and another 25% are covered under Medicaid within five years after their injuries. Second.
Speaker 4: Expansion of VA training centers. We now have five active centers in the US and our goal is to expand that by five or more of the remainder of the calendar year.
Speaker 4: We have new sites recruiting veterans, additional certification training scheduled, and active discussions with six new centers presently.
Speaker 4: Third, in Germany, we have now presented up to states to DGUV and are scheduling discussions with additional groups for our direct supply contracts now that we oppose the acceptance in Q4 of direct supply from the court proceedings. We were able to increase submissions in Q1 to a record level and those cases will impact revenue in Q3 and Q4. Fourth, product acquisition.
Speaker 4: We recognize the operative value and financial efficiency of expanding to multiple adjacent product offerings. We have demonstrated success with our integration of distribution products.
Speaker 4: These considerations remain highly active and we report on these initiatives as I reach conclusions.
considerations remain highly active and we report on these initiatives as they reach conclusions. Fifth, data expansion.
on May 9th at ISCOR, which is the Professional Society for Health Economics and Outcomes Research.
had a publication titled, Powered Exoskeletons for Personal Use in the Home and Community, may be associated with lower health resource utilization costs in veterans with SCI.
This study compared outcomes with 31 exoskeleton users to 54 wheelchair-only users.
Also, a greater proportion of the exoskeleton group had lower health resource utilization cost the year after the prescription than the wheelchair-only group.
Six, organic product improvement. The next advancement of the rewalk system is nearing completion of late-stage development and final preparations for FDE and CE submission.
We expect to submit this newest design for our review and CE review in the second half of 2023.
And seventh, financially, 2023 includes further investment to continue building the required reimbursement and health economic operational infrastructure to support Medicare, VA, and private payers.
Our Investor Relations Program has increased resources now to communicate the breadth of activity.
Our company's fly deck has been updated to provide more information is now on our website.
With the recent and pending milestones, we are now presenting at new investor conferences and with nondial road short activities with the help of our industry relations firm, life side, advisors.
In conclusion.
is more widely accepted, while in parallel adding adjacent critical and strategic mass as a neurorehabilitation technology and product consolidated.
We understand and are seeking to complete this level of expansion and growth to achieve a break-even, profitable operation on our current capital.
I also wish to thank our shareholders for the continued commitment in supporting these life changing technologies as we expand this business in 2023 and 2024.
I look forward to providing further updates each quarter and through communication of each milestone achieved. Now I'd like to answer any questions you may have. So operator, if you could open this up to our audience, we would appreciate that.
We will now begin the question and answer session.
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At this time, we will pause this momentarily to assemble our roster. And our first question here will come from Suoyam Pakula, Ramakomph, H.C. Wainwright. Please go ahead and have your question.
Thank you. This is RK. Good morning Larry and Mike.
I appreciate you doing this call. Certainly this quarter seems to be very strong. It started off on a good foot. In terms of submissions to the Germany...
workers comp and other insurance that you're talking about.
What do you think of the timing or is there anything that you can give us to see?
You know, the how soon the conversion could could happen. Are you see them going to be lumpy during the second quarter and the second half?
In this scenario, I'll answer it first. We see that the record submissions and the number that we got in in Q1 are likely to convert in Q3, Q4.
Whether they occur in Q3 or Q4 is more variable, so there's a little bit of lumpiness to us. And then, of course, the submissions we get in here in Q2 would be more geared towards Q4. So the increase in submissions we're beginning to see on the positive side, post-COVID, we've got new interests, our leads are...
back to pre-COVID levels. Our limiters primarily have been the
We have centers are not still staffed at levels to where the dates at which we schedule the users are not as soon as we'd like We'd like tomorrow and they're given us like you know a week after tomorrow, but Other than that the progressing reasonably well so the predicted timing for most of these at six to nine months for a
submission to translate to revenue. On the
on the CMS expansion, the reimbursement expansion I need. So can you give us a little bit more color as to?
why you're so confident that you learned enough from one case that you think, not only the smoothness of the submission, but also in terms of them processing.
the claims is going to be better as either in the second quarter or in the second half.
I'm going to answer that two ways. First, our competence starts with our product. We absolutely and relentlessly will push this because the data is that good. And what I'm seeing at CMS is a recognition and not a challenge of that. This changes lives.
and CMS seems to want to take care of its beneficiaries. So a lot of that is in the data and the science, is why we're confident. But there's a parallel element. They've chosen to interact with us. We have had a reasonable number.
of interactions, some of them inefficient, they couldn't answer things the way we wanted, but they worked to help get things through. They've not given us anything that tells us they're going a different path. And we've certainly talked to them a fair amount in this process. And the advice of putting in additional cases is coming from CMS.
mean the processing time is going to...
Do you have any idea on the processing time, just like what you talked about Germany being anywhere from three to six months, or is it just too early to call it?
And they're trying to fit it in within rules and guidelines they have. And this product is so innovative and unique, it doesn't fit very well in their structure. And that's been the biggest headache we've had so far. They've been trying to figure out where to put it and how to process it. And part of them processing it the way they are now with the MAX is the MAX have a little more flexibility. And I think we'll see more structure.
You know, VA is one organization that has seen this product for the longest of time. With COVID, or basically no COVID at this point, the
So what are you seeing in terms of people getting trained and also them trying to speed up? Is there, you know, are there the similar issues as in the German training centers in terms of?
them having enough personnel to train and other such issues.
That varies greatly by site. There are some sites that are well resourced and able to do it. And as we look at the newer centers, some of them are ones that are well resourced, so that's why they jumped in. The others have progressed towards a model of they'll still handle the patient, but they've used the community care networks, the CCNs.
as a place to do the training which is dealt with their staffing challenges. And that seems to be a formula of some of the other VA's like. The addition was somewhere we were at three in the past. We noted that they're now five, so we've gone up by two since we last talked to you. And we're looking at another five. The coverage for these individuals will start to broaden. One of our other limits was we were really limited to.
five matters and if we're ending the year with at least ten active centers, we're going to get to be able to fill the request of a large percentage of the ones that have been waiting over these past few years. Thank you.
getting to use the exoskeleton to climb stairs, as you said, is certainly a huge benefit for some of the users. So how is that translating into potential...
patients trying to come in and say, now that you have it, so you have everything that I want, so can I get trained? That sort of a conversation. How much of that is increasing, and what are your comments on that end of things? nd
The specific patients, they look at it as the more they can use this the better, the ones that are more favorable. And when you take away limitations, they're more favorable in the product. But I would generally say most of them are already favorable, and it was a matter of finding a way to get it paid for. So the CMS and VA coverage is going to get the majority of the audience.
What this will really do is make it a better product for the beneficiaries of CMS and better product for the VA because the users will use it more. And that's what they really want. So that is the bigger value. It takes away obstacles, but it's generally so far taken away obstacles from people who already wanted it.
But what this will really do is make it a better product for the beneficiaries of CMS and better product for the VA because the users will use it more. And that's what they really want. So that is the bigger value. It takes away obstacles. But it's generally so far taken away obstacles from people who already wanted it. Perfect, thank you very much for taking all my questions.
Again, if you have a question, you may press star then 1 to join the question queue.
Our next question here will come from Martin Pawlik with KNCR. Please go ahead with your question.
Good morning gentlemen. Two questions. I would like to ask you first with regard to the commentary you provided which was quite useful and helpful in terms of providing more transparency.
When one sees a quarter result, let's say you are not on that conference call, you virtually get nothing in terms of outlook, in terms of commentary that you have reserved for the conference call itself. In the past you have actually done that.
call as we know there's just the two investors who come on
Give us the progress points.
Another thing you don't tell us is your outlook statement and the actual text of the release. Let me ask you a few questions on that.
Based on what you're saying, it seems to be a very much a second-hand floated result here. When you say 15 to 20% year-over-year growth,
you're saying it seems to be a very much a second half loaded results here. When you say 15 to 20 percent year-over-year growth for second half are we talking about
Actually, second half also results last year because the second half
of 2022 was $3.1 million in revenues. What should we surmise about the actual outlook for second half based on what you're saying? Are you suggesting a run rate of revenues or revenues about $3.5 million to $4 million?
versus four-year 2022. So that would imply a growth rate north of 15 to 20% for the second half if you're looking at second half in isolation because we're adding together the growth in the first half and the growth in the second half and the growth in the second half is going to be higher.
comment on until so such time that we have more clarity on what the status of the Medicare reimbursement is going to be. Okay so that actually suggests 545 million revenues in 2022 you'll exceed that number pretty solidly.
Yet, you didn't think it was valuable enough to put it in a commentary because when one sees the revenue number, it's back to just the kind of…
The kind of numbers were saying all over the place. Obviously, fourth quarter was very strong, third quarter was very weak.
When you go back and forth, it seems to me, where is the transparency that could have come through in your actual detailed summary? I am curious also, do you see the gross margin breaking through the 50% area over the kind of revenue runway you expect in the second half? Through May.
quarter of 47% gross margin I believe it was. If you're looking at the second half you would think that gross margin would be considerably higher for the second half revenues is that correct?
I'm not going to guide to margins for the year or for the second half. Right now I'm more comfortable talking about top line. We certainly believe that with higher volumes we will achieve higher margins. Part of the challenge with our margins right now is that it's off a very small revenue base.
the notion that you can get it to break even.
I wonder if you believe that is the case without an acquisition, meaningful acquisition that you are involved with. I would like for you to make a comment about how important acquisitions are to this entire story. I would like to see the adjacency that you would expect.
a commentary that suggests this is the single most important thing outside of CMS. Where do you see that as a priority? I'm happy to hear this from both you and Larry on this question.
Well, we've stated both in our objective over the past two years the intention to add product lines in order to leverage the cost structure that we have in place and the skill sets, frankly, that we offer. So it's very important and it's been a stated objective multiple times over the last two years. We have a high depth update in every quarter.
I think it's important because it makes it easier to work with our customer base. It allows us to use a infrastructure that we built with certain types of expertise whether it be in clinical or reimbursement or other areas. So it is a important business strategy of ours that we are pursuing.
But we're pursuing it prudently. Whatever we add has got to be something that meets the criteria that we have set out as a company. We're not looking to add things just for the sake of adding. We're adding something that fits strategically and will enhance the business. And I think the real value of it is it shortens the path to profitability.
because the CMS path will take some time for a market that will be meaningful. By adding additional product lines, it will shorten that timeline, we believe, to profitability. It's clear to me, and I think all investors are looking at the burn rate quarter to quarter as that number continues.
and clearly there there's a end goal which is to turn this company around get the scalability of not only the exoskeleton but also on the other products potentially.
The notion that an acquisition is important, I wonder if you could just tell us.
Are you involved in some serious discussions with a particular acquisition target? Because if you are, it is okay to say we have not closed anything, we are not there yet, but I think we need to know whether you are actually in serious discussion with any potential targets. I think as investors we should know that.
This becomes a very critical reason why investors will say, okay, transformation like position is really still part of the story.
Can you tell us where you are on the acquisition hunt?
I could tell you that we have looked at many companies and have had discussions where we believe they make sense but I can't comment beyond that.
Even to say that you might be in a due diligence point with any particular acquisition targets, have you defined that target? At least is there one?
that you're saying will be the first of those potential targets that you can, you know, you're actually in some discussions with? Clearly, I don't expect to know that you're going to close anything at any time, but you know investors who are listening to this call would want to know how far along are you in these discussions?
We have clearly defined targets that we believe would fit well with our company, but completing a process has a lot of elements to it and I can't comment further than that at this point until we get past all of the stages that it requires to make that.
the public announcement. Larry, last question with regard to profitability.
the public announcement. Larry, our last question with regard to profitability. Do you see that possible?
let's say the next 12 to 18 months with the current business model that you have in place. I mean, is that possible? And the reason is clearly because...
you know, a slippery slope, and we don't know where it's going to stop. Clearly, there's some very positive fundamentals around everything you've said today. I think it would have been much better if some of this was in print. But please comment on profitability. Can you be profitable without an acquisition? That depends on CMS, to answer that question to an extent. So, there are circumstances where it certainly could be. We have developed models of what it would take to get us to profitability on our current cash. That is a combination of existing products and adding products.
If coverage were more favorable and more easily achieved, it could be more easily done with the ReWALK product line as a standalone, but we think it's most efficiently done by having a few product lines with the same call points, the same physician groups, but adding things that are going to be accretive in a very short cycle.
Okay, thank you, John . Thanks, Marty. Thank you, Marty. And our next question will come from Dane Yorgrove with NBS Investments. Please go ahead with your question. Yes, sir. Thank you for taking the call. I'd like some color on the repurchase program, where it exists.
earlier that I think in the first quarter it was $771,000 that I was wondering if that's an inclusive number of everything that's been repurchased on the 8 million or that's just a quarterly figure. So could y'all give us some color on that? And secondly...
I know that there can't be an active strategy. It's based on what we do, but...
What's the progress or is there any strategy or is there any forward looking on part of the stock price? Increase the stock price.
You want to start with the buyback and I'll be sure about the hours. Hi Daniel, so this is Mike. So the 770,000 dollars I quoted in the remarks earlier related to activity in
It was in it there'd be an additional two two point five million dollars that we purchased repurchased before or last quarter So it would be the combination of the seven seventy in the two two point five million dollars or three point three million dollars in total Okay, and so y'all are on projection in the next and this next six month cycle to get the rest purchased or is it gonna take another? execution when other six months turns to get it done It's it's highly dependent on the share price and the volume of shares that are treated
So I can't give you that answer because we don't know until we get there. And I think the other half of the question is part of the answer where you ask about the price per share. And we believe that there are several things that should impact our stock price.
Milestones are the biggest. The process with CMS changes this industry, and it changes this company once we cross that milestone. The addition of other product lines also would change some of the profile of our company. So the milestone components we believe are reasonably close in.
But with the government you can't define reasonably entirely for timing, but they're working with us. In parallel, you've seen a change in investment and time and money and talent for investor relations, and we believe that will help us bring in more value.
higher volumes and more investors built around the milestones and the long-term path that we have. We are very aggressively in both of those areas using them as a vehicle to improve the price per share if we can achieve these milestones and communicate it well.
I appreciate that because as a long-term investor, I believe strongly in the product and I'm pretty much all in on it. We are and I'm interested in that idea of a better flow of information. It's hard to come by.
So any efforts you could put into special relations and a better free flow of information would be highly appreciated, and I'll leave it with that. Thank you very much. Thank you, and with the addition of LifeSci Advisors, I think they will help us a great deal as they do this with many companies.
And this concludes our question and answer session. I would like to turn the conference back over to Larry for any closing remarks.
Okay, I would like to thank everybody for the participation. I think the question asked at the beginning around CMS expansion and our confidence in where this is going. Very clearly this product works. Our data is there.
And we see the market reacting to it slowly, but reacting to it. CMS has taken this this far. When or if and how they finish it is still to be determined. But we have come a very long way over these past 6 to 12 months with CMS. And that's why you see us putting in.
10 claims in Q2 and 35 to 50 for the year. Those are game changers, and I think that's the most important thing to watch as to when and how they develop. So with that, thank you and for anybody who is looking for information, please reach to Life Science Advisors, Mike or myself, and we will communicate everything that we can.