Ekso Bionics Holdings, Inc.

Greetings, and welcome to the Exobionics Quarter 3, 2024 Financial Results 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, please press star zero on your telephone keypad as a reminder this conference is being recorded. It is now my pleasure to introduce Matt Steinberg, Finn Partners. Thank you. 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, and Jerome Wong, Chief Financial Officer. Earlier today, Exobionics released financial results for the quarter ended September 30th, 2024. 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. 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 include 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. For a list and description of the risks and uncertainties associated with EXO's businesses, please see its 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. 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 ExoBionics Chief Executive Officer, Scott Davis.

Thank you, Matt. The third quarter reflected a period of transition in progress, particularly within our personal line of ExoHealth devices. Notably, in August, the approval and reimbursement of the initial CMS claim for our ExoIndigo Personal represented a significant milestone for Exo and, importantly, patients with spinal cord injuries. After CMS established pricing determination for our ExoIndigo Personal in April, we immediately executed our field communication strategy to ensure that all targeted healthcare providers were made aware of the new CMS access and coverage policy that could impact thousands of Medicare and Medicaid patients living with a spinal cord injury. Additionally, we've been working closely with our extensive network of neurorehabilitation centers across the country, focused on education efforts on appropriate patient selection, screening, trialing, onboarding, and skills training for patients prescribed an ExoIndigo Personal for both at home and in community settings. I also want to highlight the success we've had with investing in various digital marketing programs and strategies designed to raise product and policy awareness, which have resulted in an influx of new qualified leads. Additionally, we continue to develop and evolve our educational access resources to support prescribing healthcare providers in navigating through the insurance process efficiently and effectively. We remain committed to enhancing our collaboration with healthcare providers by ensuring that our innovative solutions meet their needs and by streamlining our processes with their feedback. I want to emphasize that this is a program that takes time to build. We're excited to see that across all targeted sectors, our pipeline is steadily increasing, which we believe will enable us to scale this program over time. With multiple claims now submitted through our DME to Medicare, We will continue to focus our efforts on continued customer education to improve process efficiencies. We are actively engaging with new potential customers. This not only enhances our understanding of their needs, but also allows us to showcase the benefits of the XO Indigo personal device. We are committed to expanding access to our innovative XO Indigo personal technology and empowering more qualified individuals to achieve greater mobility and independence. We look forward to providing updates on our continued work with the SCI community and eventually individuals with neurological conditions who could potentially benefit from our technology once we're able to obtain the necessary indications. Now I'll share an overview of our third quarter performance. We generated quarterly sales of $4.1 million and sold 33 ExoHealth devices in the third quarter of 2024. U.S. sales were affected by fluctuations in procurement cycles for our integrated delivery network, or IDN, customers that have persisted since the start of 2024. This was compounded by several customers delaying capital purchases into the fourth quarter and into early 2025. However, our demand and pipeline for XO Health products remain strong, and we're focused on delivering our innovative devices to individual clinics and hospitals while expanding our global customer base. We believe our expanding network of leading neurorehabilitation centers recognizes the clinical and economic benefits of our innovative XONR device. Currently, XONRs are deployed in nine of the top 10 rehabilitation centers in the United States, which we believe is an indicator that our technology is becoming a standard of care for lower extremity neurorehabilitation. We plan to leverage our strong reputation to drive growth for both our ExoNR, and our ExoIndigo therapy devices. As we continue to strengthen our distribution network and expand our pipeline of opportunities, we remain confident in our ability to grow our presence among neurorehabilitation centers and enhance patient outcomes. Internationally, demand remains strong, mirroring our robust performance in the first half of the year. Sales in Europe achieve record levels in the quarter as neuro rehabilitation centers in the region are adopting our potentially life changing technology. In addition to placing more devices worldwide, we also expanded our international distribution network, which has allowed us to achieve greater operating leverage in foreign markets, which we believe positions as well for continued success on a global scale. As we look ahead, we are committed to further developing our relationships with our IDNs to secure larger multi-unit capital contracts across North America. This initiative is a key component of our ongoing commercial strategy to expand our market presence, and we are optimistic about our future prospects in the growing pipeline of potential deals. Now I'd like to provide a brief update on our industrial segment, ExoWorks. In the third quarter, sales of Exo's Evo exoskeleton were impacted by labor strikes in U.S. manufacturing industries. Nonetheless, we are committed to raising awareness about the benefits that Evo offers for workers engaged in demanding overhead tasks, including reduced fatigue, increased productivity, and fewer workplace injuries. Evo is suitable for a range of industries, notably in automotive, aerospace, construction, and renewable energy verticals, and numerous other sectors where overhead work is necessary. Now shifting to our operations, where we continue to create more efficiencies throughout our business. Our improvements in supply chain and inventory management, along with efficiencies gained in production, resulted in strong gross margins for the quarter, despite a concentration of our revenue being sold in Europe, which reflected lower ASPs, as is typical with distribution. Overall, we are pleased to have improved our operating margins in the quarter by reducing our operating expenses. In summary, this was a quarter of progress for ExoBionics, marked by the receipt of initial CMS claims reimbursement for our ExoIndigo personal device and increased global demand for ExoNR. With our total product portfolio that has the potential to reach a large addressable market in excess of $13 billion across the continuum of care, we believe we are trending in the right direction for future growth. At this time, I'd like to turn the call over to our Chief Financial Officer, Jerome Wong, to review our third quarter financial results.