Lifeward Ltd.

Good day and welcome to the LifeWard Third Quarter 2024 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Mike Lawless, CFO. Please go ahead.

Thank you, Danielle. Good morning, and welcome to LifeWord's third quarter 2024 earnings call. I'm Mike Lawless, LifeWord's chief financial officer, and with me on today's call is Larry Jasinski, our chief executive officer, and Alma Ghadar, our vice president of finance. Earlier this morning, LifeWord issued a press release detailing financial results for the three and nine months ended September 30, 2024, which, along with this call, discuss certain non-GAAP information. The press release, including relevant non-GAAP reconciliations and a webcast of this call, can be accessed through the Investor Relations section of the LifeWord website at golifeword.com. 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 and the company's future performance may be considered forward-looking statements within the meeting of the Private Securities Litigation Reform Act. These forward-looking statements are based on information available to LifeWord management as of today. They involve risks and uncertainties, including those noted in our press release and our filings with the SEC. These forward-looking statements are not guarantees of future performance. Actual results may differ materially from those projected in the forward-looking statements. LifeWord specifically disclaims any intent or obligation to update these forward-looking statements, whether as a result of new information, future developments, or otherwise, except as required by law. A replay of this will be available shortly after the completion of the call, accessible from the dialing information in today's press release. The archived webcast will be available in the investor relations section of our website. For the benefit of those who may be listening to the replay or the archived webcast, this call was held and recorded on November 12, 2024. Since that date, LifeWord may have made subsequent announcements related to the topics discussed, so please reference the company's most recent press releases and SEC filings for the most up-to-date information. And with that, I'll turn the call over to Larry. Thank you, Mike.

Welcome, everybody, and I appreciate your joining today. Fulfilling our mission of providing access to technology that changes lives and our progress in building towards an enduring financial business advanced during Q3. The Lightboard story consists of two primary businesses. One focused on a novel system allowing ambulation and improved health outcomes and quality of life for spinal cord injury individuals. And the other, anti-gravity technology for off-weighting individuals for conditioning, injury recovery, treatment of neuro disorders, weight loss, and overall health and wellness. We are very excited about our novel exoskeleton technology, the ReWalk exoskeleton, because although the product has been available on the market for a number of years, we are now at the start of commercial expansion as a result of the Medicare coverage that the company was able to gain this past April. Our immediate coverage base in the United States has expanded to over 17,000 individuals with the potential to have coverage of another 25,000 as access expands to additional payers. Our differentiated anti-gravity technology services a range of users, from professional athletes to everyday patients. In particular, those recovering from a broad range of injuries those seeking weight loss solutions, and those with neurological impairments such as Parkinson's, where restoring gait is so critical. The combination of the products forms a business base with operating synergy, depth of the relationships of clinics, and importantly, with physical medicine and rehabilitation physicians who prescribe and guide training on our products in up to 17,500 clinics in our direct markets. Let me relate two stories to bring these innovative designs to life. Quote, they changed my life, unquote. Well, it's a story of a patient who gained access to Rewalk through Medicare coverage. She notes she made peace with life in a wheelchair and lived a good life. But when Medicare allowed access, she and her physician decided to try Rewalk so that she could achieve her physical activity goals and gain health benefits. such as improved pain reduction, improvement in social functioning and mental health, and improved bowel health, amongst a few. Since Rewalk, she relates a feeling of normalcy working in the kitchen and lists a number of health benefits from Rewalking once again. She named her device Rook Rewalker. Another patient suffered from extensive knee pain and her weight prevented knee surgery to address her pain. With the advice of her physician, She utilized AlterG's differential air pressure technology, and she was able to reduce her weight exercising the AlterG. This enabled her to subsequently have the knee surgery, which allowed a major improvement in her life. This is one of the growing segments for anti-gravity technology. The company made significant progress during the quarter. Key developments? We continue to grow the business with a 39% increase over the prior year quarter. We had 20 more individuals regain ambulation from Rewalk placements in the quarter. Coverage for Rewalk started with the establishment of payment in April and the process for qualifying, documentation, processing, trial and training takes time. Our range has been broad. ranging from 55 days to over 1,000 days. For cases that were both sourced and completed in 2024, the claims processing timeframe has been about 150 days in these cases, which we are working to shorten going forward. We have built an engine to process claims with a dedicated team of clinicians and case managers that will allow us to support the volume we see in the coming quarters. Overall, U.S. leads have expanded 62% over prior year due to our expanded coverage and commercialization efforts to drive adoption and uptake. Due to these efforts, our current U.S. pipeline with Medicare and other U.S. payers is now approximately 70 qualified contacts, which bodes well for future quarters and drives our optimistic outlook. Turning our focus to the AlterG technologies, While there's been a lot of good that gives me and should give you great optimism for the future, the business has not delivered on my expectations this year. I am convinced this is a fantastic technology based on the high level of utilization in clinics, the direct customer feedback, and supporting scientific literature. It's an important part of our strategy going forward. However, we came out of the gates slower than we planned in 2024 after the acquisition, which in retrospect should not have been surprising, given the amount of change, turnover, and distraction that comes with the consolidation. Secondly, we are being impacted by the delays in capital expenditures, particularly in smaller provider organizations that have been well-reported in the industry. Our market intelligence tells us that others in the space are seeing the same impact. We do continue to have optimism here, as our third quarter placement run rate was better than the first half of the year. We have the best product, and to the best of our knowledge, are not losing sales to competitors. And the market reaction to our recently introduced Neo model has been strong with about 40 orders to date. We are also aligned in our sales and market efforts with how the rehabilitation provider industry is consolidated. We are anticipating a strong fourth quarter for Alter-G, which will set us up well for 2025. In 2024, we have focused on operational efficiency. We made an announcement last week about the closure of two facilities and the financial impact. This is the final step with a number of moves to consolidate efforts leading to a streamlined organization and the ability to focus on driving rewalk growth. Our 6.7 million adjusted operating expenses in the quarter is our lowest in the previous five quarters. This will improve as we drive rewalk sales and capture the efficiencies of this latest consolidation. Our models support the ability to reach break-even and requires a sufficient pace of Medicare rampant processing, successful penetration with the new Alter-G NEO system, and some recovery of funding activity in the capital equipment markets that we anticipate in 2025. Our R&D focus in 2024 was driven by the launch of the NEO and the NEO+, which were successfully launched mid-year and by the REWOC 7-0, a system which is much easier to use and adds essential real-time transmission of data on utilization. The 7-0 is under FDA review and in the follow-up question base. We will complete the requested studies with additional data by year end. We anticipate FDA clearance to follow in the early months of 2025. I would now like to turn the call over to Mike Lawless for a financial review.