Q4 2023 Ekso Bionics Holdings Inc Earnings Call

Operator: and many more. Thank you. Greetings and welcome to the fourth quarter 2023 financial results. Time when all participants are in, a brief question and answer session will follow. If anyone should require operators..., star zero. As a reminder, this conference. It is now my pleasure to introduce your host, Steinberg.

Okay.

Greetings and welcome to the XL Bionics fourth quarter 2023 financial results Conference call.

At this time all participants are in a listen only mode.

A question and answer session will follow the formal presentation.

If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host Matt Steinberg Finn partners.

Matt Steinberg: Thank you. Thank you, Operator, and thank you all for participating in today's call. Joining me from Ekso Bionics are Scott Davis, Chief Executive Officer, Jerome Wong, Chief Financial Officer, and Jason Jones, Chief Operating Officer. Earlier today, Ekso Bionics released financial results for the quarter and year ended December 31st, 2023. A copy of the press release is available on the company's website. Before we begin, I would like to remind you that management will make statements during this call that are forward-looking statements within the meaning of the federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements made during this call that are not statements of historical facts should be deemed to be forward-looking statements.

You may begin.

Thank you operator, and thank you all for participating in today's call. Joining me from Exo Bionics are Scott Davis, Chief Executive Officer.

Wong Chief Financial Officer, and Jason Jones, Chief operating Officer.

Earlier today, <unk> Bionics released financial results for the quarter and year ended December 31st 2023.

A copy of the press release is available on the company's website.

Before we begin I would like to remind you that management will make statements. During this call that include forward looking statements within the meaning of the federal Securities laws, which are made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1995 eight.

Any statements made during this call that are not statements of historical facts should be deemed to be forward looking statements.

Matt Steinberg: All forward-looking statements, including statements regarding our business strategy, future financial or operational expectations, or our expectations of the regulatory landscape governing our products and operations, are based upon management's current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements.

All forward looking statements, including statements regarding our business strategy future financial or operational expectations or our expectations of the regulatory landscape governing our products and operations are based upon management's current estimates and various assumptions.

These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward looking statements accordingly.

Accordingly, you should not place undue reliance on these statements.

Matt Steinberg: For a list and description of the risks and uncertainties associated with our businesses, please see our filings with the Securities and Exchange Commission. Ekso disclaims any obligation, except as required by law, to update or revise any financial or operational projections, its regulatory outlook, or other forward-looking statements, whether because of new information, future events, or otherwise. Any forward-looking statements made on this call speak only as of the date of this call. I will now turn the call over to Ekso Bionics Chief Executive Officer, Scott Davis. Thank you, Matt.

For a list and description of the risks and uncertainties associated with our businesses. Please see our filings with the Securities and Exchange Commission.

XO disclaims any obligation except as required by law to update or revise any financial or operational projections, it's regulatory outlook or other forward looking statements, whether because of new information future events or otherwise.

Any forward looking statements made on this call speak only as of the date of this call I will now turn the call over to <unk> Bionics, Chief Executive Officer, Scott Davis.

Thank you Matt we're excited to have closed out 2023 on a positive note highlighted by record annual revenues $18 3 million.

Scott G. Davis: We're excited to have closed out 2023 on a positive note, highlighted by record annual revenues of $18.3 million, an increase of 42% from the prior year period. Our solid results reflect continued improvements in consistency of returns from our scalable commercial strategy, in addition to the early contributions of our indigo product lines that we acquired in late 2022. On today's call, I'll briefly discuss and review our fourth quarter 2023 results and share other business updates. Starting with our Q4 results, we generated revenue of $4.8 million in the fourth quarter of 2023, a 36% increase from the same period in 2022. During the quarter, we sold 38 Ekso Health devices. Throughout our enterprise ExoHealth segment, inpatient rehabilitation facilities continue to leverage our advanced exoskeleton technology to help stroke, traumatic brain injury, multiple sclerosis, and spinal cord injury patients on the road to recovery. Our clinically proven patient improvements in functional outcomes support our efforts to elevate the standard of care for neurorehabilitation.

An increase of 42% from the prior year period.

Our solid results reflect continued improvements in consistency of returns from our scalable commercial strategy. In addition to the early contributions of our indigo product lines that we acquired late 2022.

On today's call I'll briefly review, our fourth quarter 2023 results and share other business updates.

Starting with our Q4 results, we generated revenue of $4 8 million in the fourth quarter of 2023, 36% increase from the same period in 2022.

During the quarter, we sold 38 XO health devices.

Throughout our enterprise XO health segments inpatient rehabilitation facilities continued to leverage our advanced exoskeleton technology to help stroke traumatic brain injury multiple sclerosis spinal cord injury patients on the road to recovery.

Clinically proven patient improvement in functional outcomes support our efforts to elevate the standard of care for neuro rehabilitation. Additionally.

Scott G. Davis: Additionally, the economic value proposition for neurorehab providers that implement our ExoNR and ExoIndigo therapy devices into their programs has been shown to increase patient throughput and drive higher patient volumes. Altogether, we continue to translate these compelling data points into our commercial strategy by selling both multi-unit orders and multi-unit renewals to our vast network of operators. The output from our commercial team led to a record year of Ekso Health devices sold. For the full year 2023, we sold 151 Ekso Health devices, up 51% from 2022 levels. We believe we are well-positioned to build upon this momentum to drive sustained growth for our EksoHealth enterprise devices as we continue to strengthen our distribution network and expand our pipeline of opportunities. Earlier this year, we were pleased to have launched our GateCoach software for XONR. Gait Coach is our next-generation gait therapy software for Ekso and R that simplifies the use of robotics.

Additionally, the economic value proposition for neuro rehab providers implement are excellent.

When you go therapy devices into the programs have been shown to increase patient throughput and drive higher patient volumes.

Altogether, we continue to translate these compelling data points into our commercial strategy by selling both multi unit orders and multi unit renewals to our vast network of operators the.

The output from our commercial team led to a record year of XO health devices Salt.

For the full year 2023, we sold 151 XO health devices up 51% from 2022 levels. We believe we are well positioned to build upon this momentum to drive sustained growth for XO health enterprise devices as we continue to strengthen our distribution network and expand our pipeline of opportunities.

Yes.

Earlier. This year, we were pleased to have launched our gate coach software for XO and R.

<unk> coaches are next generation gait therapy software for XL into our simplifies the use of robotics.

Scott G. Davis: The intention is to improve user trust in technology, provide impactful, dynamic feedback, and offer specific guidance, acting as an extra set of clinical eyes. We believe GateCoach will reduce training demands and increase utilization, making the device more intuitive and easier to use for both patients and physical therapists. Users of XONR, recently introduced to GateCoach through initial survey results, have exhibited support for this software upgrade, with nearly all users finding it to be intuitive. Feedback also indicated that guidance from GateCoach makes XONR easier to use, is useful for new or less experienced therapists at the clinic, and is believed to further help patients achieve their clinical goals. A demonstration of this exciting new software can be found on our website. Now, turning to an update on our Ekso Indigo personal device. On February 29th, CMS announced that it deferred payment determination for personal exoskeletons, including the Ekso indigo personal.

The tension is to improve user trust in technology provide impactful dynamic feedbacks and offer specific guidance I think is an extra set clinical lives.

We believe gate coach will reduce training demand and increased utilization, making the device more intuitive and easier to use for both patients and physical therapists and marking a milestone in improvement of our product portfolio.

Users of XO and our recently introduced the gate coach through initial survey results have exhibited support for this software upgrade with nearly all users finding it to be intuitive.

<unk> also indicated guidance from gate coach makes XO and are easier to use.

It's useful for new or less experienced therapist at the clinic and is believed to further help patients achieve their clinical goals for.

The demonstration of this exciting new software can be found on our website.

Now turning to an update on our XO indigo personal advice on February 29th CMS announced that is deferred payment determination for personal exoskeletons, including the <unk> personal.

Scott G. Davis: As part of its communication, CMS requested additional examples of non-Medicare payer data that would support a payment determination where products qualify under HCPCS code K1007, such as our Indigo personal. We intend to provide materials to CMS to help provide additional commercial details supporting reimbursement. Until a reimbursement rate has been established, we will provide relevant support to help our customers process Medicare claims on a case-by-case basis. As we have done throughout 2023, we will continue to offer our Indigo personal advice to veterans through the VA's established reimbursement program. The lightweight, packable, modular design of this device allows individuals living with a spinal cord injury to more easily bring it along with them for use in their communities. And the advanced gait feature allows them to achieve average walking speed, an important consideration when navigating crosswalks.

As part of its communication CMS requested additional examples of non Medicare payer data that would support payment determination.

Our products qualify under Haig's fixed code K 1007, such as our indigo.

No.

We intend to provide materials to CMS to help provide additional commercial details supporting our reimbursement rate.

Till a reimbursement rate has been established we will provide relevant support to help our customers processed Medicare claims on a case by case basis.

As we've done throughout 2023, we will continue to offer our indigo personal device to veterans through the Va's established reimbursement program the <unk>.

Light weight Packable modular design of this device allows individuals living with spinal cord injury to more easily bring it along with them for use in their communities and the advanced gate feature allows them to achieve average walking speeds and important consideration is navigating crosswalks.

Scott G. Davis: Ekso is committed to delivering well-built, affordable products and to helping enable this potentially life-changing technology to reach a higher number of individuals living with a spinal cord injury. We look forward to our continued work with CMS and the SDI community. On the international front, we achieved solid performance across the EMEA and APAC regions, as we generated an increase in sales volume built on the strength of our distribution network. Not only are we getting more placements, but our network enables us to gain operating leverage abroad. Notably, in the fourth quarter, we generated multi-unit Ekso NR sales across Eastern Europe.

XO is committed to delivering well built affordable products and to help enable this potentially life changing technology reached higher number of individuals living with spinal cord injury.

We look forward to our continued work with CMS and the Sci community.

On the international front, we achieved solid performance across EMEA and APAC regions as we generated an increase in sales volume built on the strength of our distribution network.

Not only are we getting more placements, but our network enables us to gain operating leverage abroad.

Notably in the fourth quarter, we generated multiunit XO and our sales across eastern Europe.

Scott G. Davis: Looking ahead, we continue to focus on building relationships with larger customers in these regions as we invest in our international footprint to support Ekso's ongoing growth across the globe. Now, I'd like to turn to an update on our industrial segment, EksoWorks. In 2023, we drove notable progress in our industrial product line, especially on the operational side with the implementation and initial supply of EVOs from our new high-volume contract manufacturer. By reducing supply constraints and substantially lowering costs for our contract-manufacturer relationship, we believe we'll be able to better meet the supply and pricing demands of a potentially high-volume industrial customer pipeline. Based on this, we feel we are poised for continued growth and market expansion. While revenue contributions from our industrial segment have recently been at modest levels, we remain steadfast in our commitment to maximize EVO's placement in large industrial settings, leveraging a significant emerging market opportunity.

Looking ahead, we continue to focus on building relationships with larger customers in these regions as we invest in our international footprint to support <unk> ongoing growth across the globe.

Now I'd like to turn to an update on our industrial segment XO works in 2023, we drove notable progress in our industrial product line, especially on the operational side with the implementation and initial supply of <unk> from our new high volume contract manufacturer.

By reducing supply constraints and substantially lowering costs through a contract manufacturer relationship. We believe we'll be able to better meet the supply and pricing demands.

Potentially high volume industrial customer pipeline.

Based on this we feel we are poised for continued growth and market expansion.

While revenue contributions from our industrial segment have recently been modest levels, we remain steadfast in our commitment to maximize <unk> placement large industrial settings.

Leveraging a significant emerging market opportunity.

Overall, I am enthusiastic with our record breaking revenue performance in 2023.

Jason C. Jones: Overall, I'm enthusiastic about our record-breaking revenue performance in 2023. We're focused on building out the market across the continuum of care for pioneering ExoHealth devices and believe we are well positioned to deliver on our objectives. Now, I will turn the call over to Jason Jones, our Chief Operating Officer, for an operational update. Thank you, Scott.

We're focused on building out the market across the continuum of care for a pioneering XO health devices and believe we are well positioned to deliver on our objectives.

Now I will turn the call over to Jason Jones, our Chief operating officer for an operational update.

Thank you Scott I'm pleased to report several key achievements and developments within <unk> operations in 2023.

First we bolstered our operating leverage reflecting a more efficient and scalable operational model.

Our revenues grew by 42% year over year in 2023, our operating expenses increased by only 11%.

Jason C. Jones: I'm pleased to report several key achievements and developments within Ekso's operations in 2020. First, we will bolster our operating leverage, reflecting a more efficient and scalable operational model. While our revenues grew by 42% year-over-year in 2023, our operating expenses increased by only 11%. We believe this is indicative of the operating levels we are able to achieve going forward as we continue to manage expenses. Further, our efforts in inventory management allowed us to reduce our inventory on hand by 3% as of the end of 2023 compared to the prior year. However, we believe there is still room to improve on inventory efficiency.

We believe this is indicative of the operating leverage we aim to achieve going forward as we continue to manage expenses.

Further our efforts and inventory management have allowed us to reduce our inventory on hand by 3% as of the end of the 2020 compared to the prior year despite strong revenue growth.

There is still room to improve on inventory efficiency.

In Q4, we also completed the transition for our Ohio team from Parker Hannifin system, So a new electronic quality management and product lifecycle management system.

This new system is expected to be the foundation of our product development and quality processes going forward with the entire company planning to transition over throughout 2024.

We believe that consolidating our teams onto a single system will improve collaboration across our sites.

Once fully implemented will reduce audit and compliance costs.

At this time I'd like to turn over the call to our Chief Financial Officer, Jerome long to review, our fourth quarter and full year financial results.

Thank you Jason.

We generated an increase in the fourth quarter of 2023 revenues, 36% $4 8 million compared to $3 6 million for the fourth quarter of 2022.

Jerome Wong: In Q4, we also completed the transition for our Ohio team from Parker Hannaford's IT system to a new electronic quality management and product lifecycle management system. This new system is expected to be the foundation of our product development and quality processes going forward, with the entire company planned to transition over throughout 2020. We believe that consolidating our teams onto a single system will improve collaboration across our sites and, once fully implemented, will reduce audit and compliance costs. At this time, I'd like to turn over the call to our Chief Financial Officer, Jerome Wong, to review our fourth quarter and full year financial results. Thank you, Jason.

Increase in revenue is primarily due to an increase in the volume of excellence in India.

Oh in device sales.

Gross profit for the fourth quarter was $2 4 million, representing a gross margin of approximately 49% compared to a gross profit of $1 7 million and a gross margin of 47% at the same period of 2020 to.

41% increase in gross profit was primarily driven by an increase in XO helped it by itself.

Margin expansion was primarily due to lower and so health advice and service costs.

Operating expenses for the fourth quarter of 2023 or $5 8 million.

Compared to $6 1 million.

Jerome Wong: We generated an increase in the fourth quarter of 2023 revenues of 36% to $4.8 million compared to $3.6 million for the fourth quarter of 2022. This increase in revenue is primarily due to an increase in the volume of XONR and indigo device sales. Gross profit for the fourth quarter was $2.4 million, representing a gross margin of approximately 49% compared to a gross profit of $1.7 million and a gross margin of 47% for the same period in 2022. A 41% increase in gross profit was primarily driven by an increase in Ekso Health device sales. Margin expansion was primarily due to lower Ekso Health device and service costs. Operating expenses for the fourth quarter of 2023 were $5.8 million, compared to $6.1 million for the fourth quarter of 2022. The 5% decrease was primarily due to a decrease in general and administrative expenses stemming from lower legal expenses.

Fourth quarter 2022 five.

5% decrease primarily due to a decrease in general and administrative expenses stemming from lower legal expenses.

Net loss applicable to common stockholders for the fourth quarter was $3 2 million or 22 cents per basic and diluted share compared to a net loss of $3 $2 million or 24 cents per basic and diluted share the same period of 2022.

Operating cash burn for the fourth quarter was $1 6 million compared to $3 $7 million in the fourth quarter of 2022.

Turning to our full year 2023 results.

Revenue increased by 42% to $18 3 million compared to $12 $9 million for the same period in 2022.

The increase in revenue was primarily driven by an increase in XO help to buy sells $5 $9 million.

Gross profit for the full year ended December 31, 2023 was $9 1 million, representing a gross margin of approximately 50% compared to a gross profit of $6 $2 million for the same period in 2022, representing a gross margin of 48%.

Jerome Wong: The net loss applicable to common stockholders for the fourth quarter was $3.2 million, or $0.22 per basic and diluted share, compared to a net loss of $3.2 million, or $0.24 per basic and diluted share for the same period of 2022. Operating cash burn for the fourth quarter was $1.6 million, compared to $3.7 million in the fourth quarter of 2022. Turning to our full year 2023 results, revenue increased by 42% to $18.3 million compared to $12.9 million for the same period in 2022. The increase in revenue was primarily driven by an increase in Ekso Health device sales of $5.9 million. Gross profit for the full year ended December 31, 2023, was $9.1 million, representing a gross margin of approximately 50%, compared to a gross profit of $6.2 million for the same period in 2022, representing a gross margin of 48%.

The increase in gross profit was a result of lowering our bias and service costs and product mix.

Operating expenses for the 2023 full year or $24 2 million compared with $21 $8 million for the prior year period.

The increase in operating expenses was primarily related to the acquisition and integration of HFC.

Net loss applicable to common stockholders for the 2023 full year was $15 $2 million or $1.10 per basic and diluted share compared to a net loss of $15 $1 million or $1.16 per basic and diluted share for the 2022 full year.

Cash used in operating activities in the 2023 fiscal year was $12 1 million.

As of December 31, 2023, the company had cash on hand, $8 $6 million.

Subsequent to year end <unk> closed on a registered direct offering certain institutional investors, resulting in total net proceeds to the company of approximately $3 $9 million.

Please see our Form 10-K filed earlier today for further details regarding the quarter and full year. Operator, you may now open the line for questions.

Jerome Wong: The increase in gross profit was a result of lower device and service costs and product mix. Operating expenses for the 2023 full year were $24.2 million compared with $21.8 million for the prior year period. The increase in operating expenses was primarily related to the acquisition and integration of HMC. The net loss applicable to common stockholders for the 2023 full year was $15.2 million or $1.10 per basic and diluted share compared to a net loss of $15.1 million or $1.16 per basic and diluted share for the 2022 full year. Cash use and operating activities in the 2023 fiscal year were $12.1 million.

Thank you Alex.

And ladies and gentlemen at this time, we will conduct a question and answer session.

If you would like to ask a question. Please press star one on your telephone keypad.

Confirmation tone will indicate that your line is in the question queue.

You May press Star two if you would like to remove your question from the queue.

For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Once again ask a question press star one on your Touchtone phone standby, while we poll for questions.

Our first question comes from RK with H C. Wainwright. Please state your question.

Thank you good afternoon.

Scott.

Hello RK.

First question is on India gold pricing.

So.

And I did hear that.

You are still in discussions with CMS on the final pricing.

When you tell them to come up with that number it's a case by case.

So what do you need to do.

In terms of.

Helping CMS come to a decision so that we have a price that will become effective on April 1st which is not too far from here.

Operator: As of December 31, 2023, the company had cash on hand of $8.6 million. Subsequent to year-end, Ekso closed on a registered direct offering with certain institutional investors, resulting in total net proceeds to the company of approximately $3.9 million. Please see our Form 10-K filed earlier today for further details regarding the quarter and full year. Operator, you may now open the line for questions. And ladies and gentlemen, at this time, we will conduct our... If you would like to ask a question... Press 1 on your remote control... Confirmation. Thank you for joining us.

Yes, Thank you RK.

So.

With CMS is recent.

Announcement.

They have requested additional commercial pricing evidence.

Back when this meeting took place in November.

November.

XO was.

Pets provided commercial pricing information to CMS.

Operator: We appreciate it. Thank you. You may press start, if necessary, and ask a question; press star one.

However at the November time frame, we were not officially approved through <unk>.

For our indigo personal device, which was done on December 9th.

Operator: Bye. Our first question comes from R.K. Witt and Ray. Thank you. Good afternoon, and Jerome. Hello, Orchid.

As a result, it appears that CMS did not include.

Swayampakula Ramakanth: The first question is on Indigo pricing. And I did hear that you're still in discussions with CMS on the final pricing, and up until they come up with a number, it's case by case. So what do you need to do in terms of helping CMS come to a decision so that we have a price that will become effective on April 1st, which is not too far away?

This pricing information in their evaluation.

So we plan to provide this information to CMS.

Along with any additional details that that they require.

And in the interim we will continue to work with our customers to provide commercial pricing information to support their Medicare claims on a case by case basis.

Scott G. Davis: Yeah, thank you, RK. So, with CMS's recent announcement, they requested additional commercial pricing evidence back when this meeting took place in November. Ekso was... had provided commercial pricing information to CMS. However, in the November timeframe, we were not officially approved through PDAC for our Indigo personal device, which was done on December 9th. As a result, it appears that CMS did not include this pricing information in their evaluation.

Okay. So so does this mean.

They might have to wait for the next cycle to stock mixes November.

For us.

For our final pricing or there's a possibility that things can get resolved before.

Before that.

Yes.

We.

Spoke with our consulting experts.

Who are in this area and CNS.

Typically has biannual.

Meetings, where they published their pricing determinations. However.

Scott G. Davis: So we plan to provide this information to CMS, along with any additional details that they require. And in the interim, we'll continue to work with our customers to provide commercial pricing information to support their Medicare claims on a case-by-case basis. Okay, so does this mean we might have to wait for the next cycle to start, which is November 1st, for a final price, or is there a possibility that things can get resolved before that?

However, we are told that it's possible that they could issue a correction prior to that biannual meeting.

We'll certainly know more as.

As we work through this process in the.

Time, being we're going to continue to support CMS by providing.

The requested additional pricing detail.

To support this final payment determination.

Okay. Thanks.

For that and then.

And thinking through.

The growth in sales.

Actually.

In the fourth quarter and also for that for the entire year.

Scott G. Davis: Yeah, there's a, you know, we spoke with our consulting experts who are in this area, and CMS typically has biannual meetings where they publish their pricing determinations. However, we are told that it's possible that they could issue a correction prior to that biannual meeting. We'll certainly know more as we work through this process, but for the time being, we're going to continue to support CMS by providing the requested additional pricing detail to support this final payment determination. Okay, thanks for that. And then...

36% growth.

In the fourth quarter is really there.

I know something.

Proud off.

How.

How much of this sales increase is.

Sustainable.

You know I'm just trying to understand did you open up new areas new.

And yes, the sales are happening.

Do you have some.

New York homes, where you expect to see more of this multi unit sales slash multiunit drought.

Hum.

To happen.

Scott G. Davis: So thinking through the growth in sales, especially in the fourth quarter and also for the entire year, 36% growth year-over-year in the fourth quarter is really something to be proud of. So how much of the sales increase is sustainable, you know? I'm just trying to understand. Did you open up new areas, new areas where the sales are happening, or do you have some new accounts where you expect to see more of that growth? multi-unit sales slash multi-unit leads us to believe that this will happen going into 24 and beyond. For a great question,

Going into from before.

<unk>.

Okay.

Sure Great question, one of the things that we've been hard at work on is building a strong pipeline and a scalable go to market strategy.

Inside of our organization, so and much of that relates to.

Our.

Enterprise health customers customers, who are using our NR or indigo therapy to treat patients.

Scott G. Davis: One of the things that we've been hard at work on is building a strong pipeline and a scalable go-to-market strategy inside of our organization. So, much of that relates to, you know, our enterprise health customers, customers who are using our NR or indigo therapy to treat patients in clinics. We have been saying, quarter over quarter, that we have an increased number of multi-unit orders coming in as we become more of a standard of care inside of these IDFs. And, you know, what we are seeing are, you know, a combination of new IDNs who are coming online with their programs and rolling them out to additional hospitals. And in addition to that, you know, we've been doing this now for a couple of years.

Clinics.

We have been saying quarter over quarter that we have an increased number of multi unit.

Orders coming in as we become more of a standard of care inside of these idms.

And what we are seeing are a combination of new IV Ns, who are who are coming online with their programs and rolling them out to additional hospitals and in addition to that.

We've been doing this now for a couple of years. So we also have renewals.

Of programs with.

With existing.

Customers. So we continue to grow our pipeline.

Scott G. Davis: So, you know, we also have renewals of programs with existing IDN customers. So we continue to grow our pipeline, you know, with these larger operators in North America. In addition to that, we are seeing, you know, significant growth in Europe.

With these larger operators in North America. In addition to that we are seeing significant growth in Europe.

We have distribution relationships.

Europe that are continuing to grow and evolve.

Scott G. Davis: You know, we have distribution relationships in Europe that are continuing to grow and evolve and expand geographically. So between the geographic expansion, the scalable go-to-market strategies, and the work with the Integrated Delivery Networks, we are seeing this growth, and we believe that this growth will continue going forward. Okay, and then the last question from me is on operating expenses. In addition to what you're doing at the Ohio plant, are there additional cost containment programs in place, and should we expect some operating margin expansion in 24.

And expand geographically so between the geographic expansion the scalable go to market strategies.

And the work with the integrated delivery networks, we are.

Seeing this this growth.

And we believe that this growth will will continue.

Going forward.

Okay and then the last question from me is Hum in the operating expenses.

In addition to our.

Oh, you were doing at our Ohio plant.

Additional cost containment programs in place.

Should we expect.

Some operating margin expansion.

In 2004.

Scott G. Davis: Yeah, this is something that we continually work on RK. You know, we did a lot of work on this in 2023, and we really saw the positive effects of that in the back half of the year. We had a lot of costs in the early part of 2023 that were associated with, you know, our HMC. Our agency acquisition, we had legal and accounting costs that were associated with that that you saw in the first half that you didn't see in the back half.

Yes. This is something that we continually work on RK.

We did a lot of work.

In 2023, and we really saw the positive effects of that in the back half of <unk>.

Of the year, we had a lot of cost in the early part of 2023 that were associated.

With.

Our HFC.

Our agency acquisition.

Legal and accounting costs that were associated with that that you saw in the first half that you didn't see in the back half.

Scott G. Davis: So again, you know, those costs, one-time costs; we don't, we don't anticipate those going into this year, but you know we are doing all we can to maintain the utmost in operating efficiencies, in terms of cost control, in terms of inventory management. We will continue to work on that as well as work on cost improvements to help keep the margin trend line going in the right direction. Okay, thank you. Thanks for taking all my questions.

So again.

Those costs.

One time costs.

You anticipate those going into this year, but.

We.

We are.

Doing all we can to maintain the utmost and operating efficiencies.

In terms of cost control in terms of inventory management.

We continue to work on that as well as work on cost improvements.

To help keep the margin trend line going in the right direction.

Okay. Thank you thanks for taking all my questions.

Operator: Thank you, RK. Thank you, and a reminder to the audience... Our next question. Good afternoon, gentlemen. Thanks for taking the questions. Can you hear me OK?

Thank you RK.

Thank you and a reminder to the audience to ask a question press Star one.

Our next question comes from Ben Hayner with Alliance Global Partners. Please state your question.

Good afternoon, gentlemen, thanks for taking my questions can you hear me okay.

Sean Lee: Yep, we can hear you fine, Ben. Okay, great. Just a couple of big picture ones for me. On kind of the referral path for the personal units, how do you see that changing versus kind of what's in place now as the CMS kind of has made the decisions that they've made and deferred the decision on pricing? What's the right way for investors to think about, you know, how those referral pathways happen, what doctors do in terms of if there's reimbursement in place, are they more likely to write a prescription? Any color on how you see that developing would be helpful.

Yes, we can hear you fine.

Okay, Great just a couple of big picture ones for me.

On China, the referral path for the personal units, how do you see that changing versus kind of what's in place now.

As the CMS kind of has made the decisions that they've made in deferred the decision on pricing.

What's the right way to for investors to think about how those referral pathways happen what.

Dax do in terms of if there is reimbursement in place are they more likely to.

Prescription.

Anything any color on the on how you see that developing would be helpful.

Scott G. Davis: Okay, yep, understood. So, you know, I think there are two parts to this question. One is that the HCPCS code K1007 has been approved so doctors can prescribe against this code. That has been approved. That hasn't changed.

Okay Yep understood.

Understood. So.

Thank you.

Two parts to this question one.

One important and clear indicator is that the the hix fixed coat K 1007.

As has been.

Proved.

So doctors can prescribe against this code that that hasn't that hasn't change that was announced back in.

Scott G. Davis: That was announced back in the November time frame. And what we're waiting for is a final payment determination on a fixed amount. In the interim, what will happen along with any Medicare submission that comes through, there will need to be some backup of commercial pricing documentation, and historical commercial pricing documentation. So along with the approval request from the doctors will be a package that also includes recent purchases of the equipment. Again, at Ekso, we have several years of documentation that we can provide them supporting a reimbursement rate that you know, that could be viewed by the CMS. So in general, in general, the process is there. It's really considered case by case until the final price determination has been set. But in the interim, for those who are putting claims in now, it will need to be accompanied by that commercial pricing information.

November time frame and what we're waiting for his final payment determination on a fixed amount in.

In the interim.

What will happen along with any Medicare submission that comes through.

There will need to be some backup.

Commercial pricing documentation historical commercial pricing documentation, so along with the approval request from from the doctors will be a package that also includes <unk>.

Recent purchases.

The equipment.

And again, so we have several years of.

Documentation that we can provide them supporting.

Yes.

Hey.

Reimbursement rate.

There could be viewed by the.

By CMS.

So in general in general the processes, there, it's really considered a case by case.

Until a final price determination has been has been set but in the interim for those.

Who are putting claims in now.

It will need to be accompanied by that.

Commercial.

Pricing information.

Scott G. Davis: Okay, and so do you have any thoughts on the potential reluctance to... write restrictions if it's on a case-by-case basis, or don't you think that really has an impact? Yeah, so in general, you know, we're not anticipating a reluctance, you know, per se. You know, again, this is the reimbursement of an exoskeleton as a brace through a lump sum is a new program through CMS to begin with, so early on in the process.

Okay, and so do you have any thoughts on the potential reluctance.

Sure derive researches that there there is.

It's under a case by case basis or do you think that really has some impact.

Yes, so so in general we're not anticipating a reluctance.

For se.

Again this is.

The reimbursement of an exoskeleton is embraced through a lump sum is a is a new program through CMS to begin with so.

Early on in the process.

Scott G. Davis: Ekso has spent a decade building strong relationships with our healthcare provider network out there. We will continue to work with them to ensure that they have the information that they need for the best opportunity to have a claim reimbursed. And, you know, again, a lot.

So as as <unk> spent a decade building straw.

Strong relationships with our health care provider network that's out there.

We will continue to work with them to ensure they have the information.

That they need for the best opportunity to have a claim reimbursed and.

Again.

Scott G. Davis: Transcribed by https://otter.ai. Generally speaking, we have had, you know, a very positive reaction from our health community regarding this program. Okay, got it. So basically, early adopters are early adopters, regardless of whether it's on a case-by-case basis or not, for the most part. Is that fair?

And generally speaking we have had.

A very positive.

Reaction by by our health community regarding this program.

Okay got it so basically early adopters are early adopters, regardless of whether it's.

On a case by case basis are not for the most part is that fair.

Scott G. Davis: That is fair and correct. Okay, I got it.

That is fair correct.

Scott G. Davis: And then, you know, I think you talked about this in your deck, where you, and I think you mentioned in your last conference, probably 165,000 Medicare patients that have SDIs. What are your thoughts on those that are truly addressable and the sort of subpopulations that, you know, may be particularly addressable, and how easy those are to go after? Any color that would be helpful.

Okay got it that's very helpful and then.

I think you talk about this in your deck.

Thank you mentioned on your last conference call, we had 160000 Medicare patients that have Sci.

What's your thoughts on.

That are truly addressable I am sort of sub population that.

Maybe particularly addressable.

And how easy those or to go after.

Any color there would be helpful.

Scott G. Davis: Sure, and you know, I think there's a certain level of physicality, and there's a screening process that individuals go through to ensure that they are good candidates for the technology. I think the way to look at any program in its infancy like this is that early on, we anticipate a smaller percentage of individuals.

Sure.

There's a there's a certain level.

Physicality and Theres, a screening process that individuals.

Go through to ensure that they.

Are good candidates for the technology.

I think the way to look at any program in its infancy. Like this is that early on.

We anticipate a smaller percentage of individuals.

Scott G. Davis: We'll go through the process maybe, you know, five percent, and then, you know, longer term, we see this as, in the 10% range as a general rule of thumb, you know, around this there's, It will be, you know, certainly it'll reveal itself more as we start to work through the program. Okay, and is that kind of 5% to 10% driven by more new SDIs happening and more patients getting the personal access skeletons shortly after their injury rather than, you know, maybe they've had an SDI for 25 years, 10 years, whatever it might be. It's really a combination. You know, there are things like bone density and, you know, cardiovascular health and, you know, there's a number of elements that actually go into it, and no two individuals with spinal cord injuries are alike. I mean, you could have someone who's had an injury for a long period of time, but they've also done a lot to stay active.

We will go through the process maybe.

5% and then longer term, we see this as.

In the 10% range as a general rule of thumb.

Yes.

Around this theirs.

It will be.

Certainly it will reveal itself more as soon as we start to work through the through the program.

Okay and is that kind of 5% to 10%.

Driven by more by new.

Yes he is.

Happening.

And more of the patients getting in the personal excellence to golf and shortly after their injury rather than maybe they've had in Sci for 20.

Five years 10 years, whatever might be okay, it's really a combination.

There are things like.

Bone density and and.

Cardiovascular health and.

There's a there's a number of elements that actually go into it and no two individuals with spinal cord injuries.

Like I mean, you could have someone who's had an injury for a long period of time, but they've also done a lot to stay active.

<unk>.

Scott G. Davis: It is really driven on a case-by-case basis. But we have, you know, in working with our health care providers, we've provided good guidelines that can be used to help determine who's who's a candidate for the technology. Okay, I got it. And lastly, just to follow up on that, on those folks that, you know, may not fit the bill in terms of cardiovascular health or bone density, is that kind of a set number of new occurrences where, you know, 20% just right off the top they're never going to qualify, or there's some certain X percent that there's just absolutely no shot at. Well, you know, again, Ben, I'm not, I'm not a medical expert in terms of that, but the guidance that, you know, that the general information that we've received over the years is that, yes, I mean, there is a certain portion of the SDI population that, just as, you know, where the technology is, just are not, are not candidates for, you know, any of it. We need to make sure that, you know, whomever is doing this, that there is not enough chance that it's going to injure them in any way.

It really is.

Is driven on a on a.

On a case by case basis.

But we have.

And working with our health care providers, we provided good guidelines.

Net that can be used to help determine.

Boucher, who is a candidate for the technology.

Okay got it and then.

Just a follow up on that on those swaps.

May not fit the bill in terms of cardiovascular health and bone density is that kind of a set number of new occurrences where.

20% just right off the top they're never going to qualify or is there some certain X percent that.

There's just absolutely no shot app.

Well.

I think Ben I'm, not I'm not a <unk>.

Medical experts in terms of that but the guidance that.

Yes.

The general information that we've received over the years is that yes, I mean, there is a certain portion of the.

The Sci population that absolutely.

Where the technology is just are not are not candidates.

Four.

For <unk>, we need to make sure that you know.

Whomever is doing this that there is not.

<unk> said its going to injure them in any way patient safety is first and foremost.

Scott G. Davis: Patient safety is first and foremost in our minds and in the minds of their health care providers. So again, our rigorous screening processes that have been developed, and we developed these through the VA program that's been around for multiple years. This has managed to get quite a number of vets into the technology and also maintain a high degree of safety. So we're, you know, we're really relying on our health care providers and to ensure that we're maintaining that high level of safety but putting as many people possible into programs where this technology could potentially help them. Okay, that makes sense. Fair enough. That's it for me.

In our minds and in the minds of their health care providers, So again our <unk>.

Argument screening processes that have been developed and we develop these through the VA program thats been around for multiple years.

This has managed to get quite a number of bets.

Into the technology and also maintain a high degree of safety. So we are.

We're really relying on our.

On the health care providers and.

And to ensure that we're maintaining that high level of safety, but putting the most people possible into the program, where this technology could potentially help them.

Okay makes sense starting up.

Sean Lee: Thanks for taking the questions, gentlemen, and good luck with CMS. I appreciate it, Ben. Thank you. Thank you, Your Honor, floor back. Right.

Is it for me thanks for taking the questions gentlemen, and good luck with CMS.

I appreciate it thank you.

Thank you there are no further questions at this time I'll turn the floor back to Scott Davis for closing remarks. Thank you.

Matt Steinberg: Thank you, Diego. And thanks to everyone joining us today. Overall, 2023 was a momentous year for Ekso Bionics, highlighted by record revenue. For our Ekso Health business, our go-to-market strategy enabled us to drive more multi-unit orders from network operators that helped us achieve our strong revenue growth and improve our operating leverage. Now that we've added GateCoach software to Ekso in our devices, we're addressing patient rehab needs by bringing these latest innovations to our Ekso skeleton devices. From an operations perspective, we continue to optimize our expense and inventory management processes, which are being designed to enable us to scale our business and grow more efficiently. Looking forward, we're optimistic about our 2024 business outlook and excited as we build upon the momentum that was generated in 2023. We're looking forward to providing updates on our continued progress, and we thank you all for joining us today. Have a great day!

Alright, Thank you Diego and thanks to everyone. Joining us today overall 2023 was a momentous year for <unk> bionics highlighted by record revenue growth.

For our <unk> health business, our go to market strategy enabled us to drive more multi unit orders from network operators that helped us achieve our strong revenue growth and improve our operating leverage.

Now that we've added <unk> software to XO and our devices youre addressing patient rehab needs by bringing these latest innovations to our exoskeleton devices.

I'm an operations perspective, we continue to optimize our expense and inventory management processes, which are being designed to enable us to scale, our business and grow more efficiently.

Looking forward, we are optimistic about our 2024 business outlook and are excited as we build up the momentum generated as we built upon the momentum that was generated in 2023.

We're looking forward to providing updates on our continued progress and we thank you all for joining us today and have a great day.

Thank you. This concludes today's conference all parties may disconnect.

Have a good day.