Ekso Bionics Holdings, Inc.

Greetings and welcome to the Excel Bionics fourth quarter 2022 financial results conference call. At this time, all participants are in a listen-only mode. A brief 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. And as a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Matt Steinberg with Finn Partners. Thank you, Matt. You may begin.

Thank you, Operator. And thank you all for participating in today's call. Joining me from Exobionics are Scott Davis, Chief Executive Officer, Jerome Wong, Chief Financial Officer, and Jason Jones, Chief Operating Officer. Earlier today, Exobionics released financial results for the quarter and year ended December 31st, 2022. A copy of the press release is available on the company's website. Before we begin, I'd 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. Any statements made during this call that are not statements of historical facts should be deemed to be forward-looking statements. All forward-looking statements, including statements regarding our business strategy, future financial or operating 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 or list and description of the risks and uncertainties associated with our businesses, please see our filings with the Securities and Exchange Commission. EXO 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. This conference call contains time-sensitive information and is accurate only as of the broadcast today, March 28, 2023. I will now turn the call over to ExoBionics Chief Executive Officer Scott Davis. Thank you, Matt.

We're pleased to have officially closed 2022 with continued solid demand for ExoNR and the completion of our most significant transaction to date, the acquisition of Human Motion and Control Business Unit, or HMC, from Parker Hannafin. The importance of this acquisition cannot be understated as it expands our product offering across the continuum of care to home and community use markets. This is also why we are announcing our Q4 and 2022 financial results weeks later than usual, as is often typical in matters involving business combinations. I'll touch on this deal in more detail shortly, including what it means for our business and the value we are bringing to customers and patients. But first, a summary of our fourth quarter business performance. We generated revenue of $3.6 million in the fourth quarter, which included bookings totaling 27 ExoHealth devices, of which two were Indigo devices that were booked in the last few weeks of December, post-close of the acquisition. Throughout our ExoHealth segment, we continue to leverage our advanced robotic exoskeleton technology and rehabilitative programs to help patients on the road to recovery and improved health with better outcomes than the current standard of care. In 2022, we successfully executed on our commercial strategy, resulting in the placement of a substantial volume of additional devices within network operators globally and the completion of many multi-unit orders, both of which contributed to drive a solid year for XONR bookings and record revenue internationally. With XONR receiving FDA clearance for the multiple sclerosis indication, the first known exoskeleton device to carry this designation for rehabilitative use in patients suffering from MS. Enthusiasm for ExoNR continues to grow. Demand and order flow for ExoNR remained robust, with revenue in our ExoHealth segment up by more than 20% compared to 2021. Overall for the year, we recorded 100 ExoHealth device bookings. Our cumulative conversion and renewal rate is 81%, and we now have more than $2.2 million of contracted unrecognized revenue under our subscription model. Furthermore, we have made significant inroads with many of the large network operators, or IDNs, throughout the year, as they continue to make XONR their standard of care in lower extremity neurological rehabilitation. Our pipeline of new opportunities remains strong, although due to more challenging economic and market conditions, the sales timeline is taking longer than in previous quarters. Nevertheless, we remain bullish on our future growth prospects. Our integrated sales and marketing teams are executing on our overall commercial strategy, putting us in what we believe to be a favorable position heading into 2023. On the international front, we achieved record annual revenue performance in Europe and APAC, with APAC growing more than 60% year over year. We're excited by this increase and will continue to invest in our international footprint to support ongoing growth in these regions. Now turning to our acquisition of the HMC business from Parker Hannafin, which is synergistic and broadens our product portfolio in commercial health and expands our reach into home use. These products acquired include Indigo Therapy and Indigo Personal, now renamed XO Indigo Therapy and XO Indigo Personal. Both devices are FDA cleared lower limb powered exoskeletons which enable task specific overground gait training to patients with weakness or paralysis in their lower extremities. ExoIndigo Personal is a lightweight exoskeleton safe for use in most home and community environments. It's the only known exoskeleton to offer a modular quick connect design which allows for portability and for users to put on and take off the device without assistance. This device allows for gait impaired individuals to stand and walk again, granting them a new level of independence at home and in the community. XO Indigo Personal is primarily sold to veterans by using existing reimbursement and relocation programs supported through the Veterans Association, but has also been funded through workman's compensation and various international programs. We believe there are future opportunities to expand to more traditional reimbursement programs, both domestically and internationally. ExoIndigo therapy is an adjustable modular exoskeleton used primarily for patients with spinal cord injury, but also stroke, complementing Exo's product offering in outpatient facilities. It can be fitted to most patients in minutes, providing the potential for high-dose therapy sessions that further enhance rehabilitation. Last month, we showcased our new ExoIndigo therapy with functional electrical stimulation, or FES, at the American Physical Therapy Association meeting. and recently filed pre-market notification 510K with the U.S. Food and Drug Administration that covers the addition of integrated FES hardware and software to ExoIndigo therapy. This added technology brings forth further patient benefits allowing for improved limb function, balance, and muscle strength. Through this acquisition, Exo added the ongoing development of intelligent robotic assisted technology designed for use in the orthotic and prosthetic or O&P industry. This potential technology is being designed to enhance the capabilities of existing industry-leading knee-ankle-foot orthotics or CAFO products to improve the standard of care. This is a large and accessible market with established reimbursement, payment, and channel models. XO is looking forward to continued development along this front. Also, along with these current and future products, This combination expands the current XO team to include the former employees of HMC comprised primarily of highly experienced engineering, operations, clinical, and sales professionals. Finally, through this acquisition, XO has added strategic relationships with key commercial and research partners, including Vanderbilt University. The collaboration with Vanderbilt is expected to provide a continued path for future research and product development. This decade-long partnership has yielded the successful Indigo product line and has promised prospects for development of future innovations. With XO's core engineering staff and experienced quality and operations team, we are thrilled to have joined forces with this elite academic partner to help power new product development. To showcase the value and benefits of our newly integrated product line, I'd like to share a story of a patient who regained mobility through the use of XO Indigo Personal. Phil was initially diagnosed with spinal ependymoma tumors. Despite numerous treatments, the tumors recurred four times, leaving him partially paralyzed from cervical vertebrae seven down. Over 20 years of increased neuropathy, Phil explored different therapies and devices in an effort to maintain his mobility. Eventually, he was chosen to participate in the VA's exoskeleton evaluation program, where, after exposure to multiple exoskeleton devices, he opted for a rehabilitation program utilizing ExoIndigo. The ExoIndigo device helps Phil with countless aspects of his daily life. For example, he no longer experiences severe physical challenges when standing and his digestive processes are much improved. Quoting Phil, beyond the physical improvements, the Indigo Exoskeleton has given me the confidence to try sports and social events that I would not have previously. We are honored to see our products improving the lives of our patients firsthand and are very grateful to Phil for sharing his story. Turning to an update on our industrial segment, ExoWorks. In 2022, our ExoWorks business refocused its product offerings and go-to-market strategies, temporarily rescaling our sales and marketing resources while refocusing and refining our market approach to larger high-volume customers. We remain encouraged by the high level of engagement with our strategic targets and customers across the aerospace, automotive, manufacturing, commercial construction, and renewable energy verticals. As we progress into 2023, we look to expand upon the execution of these strategies set in motion in 2022 and to continue to engage with potential industry partners. Now I will turn the call over to Jason Jones, our new Chief Operating Officer. to provide background on himself and an overview of the initiatives that he'll be working on to improve our efficiencies. Jason.