Greetings, and welcome to the Ekso Bionics First Quarter 2025 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce to your host, Stephen Kilmer of Investor Relations. Thank you. You may begin.

Thank you, operator, and good afternoon, everyone. Earlier today, Ekso Bionics released financial results for the first quarter ended March 31, 2025. A copy of the press release is available on our website. I would like to point out that management will make statements during this call that include forward-looking statements within the meaning of the federal securities, 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 performance 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 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 the company's businesses, please see its 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. Representing Ekso Bionics today are Scott Davis, our Chief Executive Officer; Jerome Wong, our Chief Financial Officer; and Jason Jones, our Chief Operating Officer. With that said, I'll now turn the call over to Jerome.

Thank you, Steve. Good afternoon, everyone, and welcome to our first quarter 2025 conference call. On behalf of the management team and everyone at Ekso Bionics, I would like to thank you for your interest in our company. And for those who are shareholders appreciate your support. For the benefit of those who are new to the Ekso Bionics story, I would like to take a moment to summarize our business, Ekso design, develops and markets exoskeleton products that augment human strength, endurance and mobility. The primary end market for exoskeleton technology is health care, where our technology primarily serves people with physical disabilities or impairments in both physical rehabilitation and mobility. We operate as one operating and reportable segment with two markets: Enterprise Health and Personal Health. Our legacy Enterprise Health products consist mainly of our EksoNR device, which is our wearable robotic exoskeleton specifically designed to be used in a rehabilitation setting to assist individuals recovering from both acute and chronic conditions and our Ekso Indego Personal Device, a wearable, lower extremity powered exoskeleton that enable certain individuals living with spinal cord injuries with the ability to stand and walk in independently. Both products also include support and maintenance contracts. I will turn the call over to Scott in a moment for an update on our commercial activities and growth plans. However, before I do, I would like to provide a brief summary of our financial results. To streamline things, all the numbers I refer to have been rounded, so they are approximate. The company recorded revenue of $3.4 million in the first quarter of 2025 compared to $3.8 million for the same period in 2024. This reduction was due to capital budget impact from certain inpatient rehabilitation facilities or IRF related to our EksoNR Enterprise Health product.…

Thank you, Joe. While we saw some softness in our legacy enterprise business in Q1 as we had several customers whose capital budgets were at least temporarily impacted by reactions to macroeconomic uncertainties that was partially offset by good growth from our Ekso Indigo Personal. As we have discussed in the past, CMS established pricing determination for our Indigo Personal exoskeleton in Q2 of 2024. This regulatory change created a significant opportunity to help Medicare enrollees living with a spinal cord injury by removing what had historically been a primary barrier to assessing our exoskeleton. Accordingly, we immediately set out to establish a go-to-market strategy aimed at notifying as many early physician and provider adopters as possible of the new CMS-benefit category redetermination and the fee schedule listing. Additionally, we began working closely with our extensive network of NeuroRehabilitation partners across the country, focused on education efforts, and on appropriate patient selection and process for patients prescribed an Ekso Indigo Personal for the home and community setting. With that early work largely completed, we then shifted our primary focus from building awareness and providing customer education to advancing our scalable go-to-market strategy for the personal channel. As we discussed on our Q4 call just a few weeks ago, one of the key changes we made was to engage PRIA Healthcare. One of the leaders in market access services, which has been instrumental in the successful commercialization of over 300 medical devices. As a quick status update, we also recently announced bringing on Bionic P&O as a new and our first O&P distributor. And we're excited to report that they already submitted their first patient claim for the Indigo Personal exoskeleton to Medicare in Q1. And with Ekso's focused marketing efforts, we've now developed a pipeline of more than 35 Medicare…

Thank you. We'll now be conducting a question-and-answer session. [Operator Instructions] Our first question is from Ben Haynor from Lake Street Capital Markets. Please go ahead.

Good afternoon, gentlemen. Thanks for taking the questions. First off for me, now that you've got the O&P channel covered with Bionic or at least initially cover, and you have the complex rehabilitation therapy channel, the traditional kind of Medicare DME along with the kind of post-acute rehab clinics on the more enterprise side. How should investors kind of think about where the patients will fall this year in terms of the Indigo personal and kind of as a kind of a third, a third, a third with CRT, O&P, and the traditional channel? And then what do you expect from your enterprise folks?

Okay. Yes, great question. Ben, thank you. We -- again, the majority of our business historically has come out of our enterprise health product portfolio. And in general, as we move through 2025, we still expect that enterprise product will represent the large majority of what we do 75% to 80% of our business represented by that product category. Moving into the Personal product, again, as we have worked to develop our initial channels into that segment, and we've really scaled up our market access capabilities, and we've driven a good pipeline we do expect solid contribution growing quarter-over-quarter as we move through the year with really the balance of our business represented from that segment. As far as how that falls between CRT and O&P space, I think there's a bit more of a familiarity in the space. The product sort of lends itself a little bit more to reimbursement through O&P providers. However, there's been a big investment with NSM in the space. So we do expect that as the year progresses, we'll see a good contribution from there as well. So how that actually falls as we move through the year, we're uncertain of, but it could be as much as 50-50, it could be a little less. We just won't know until that program really starts to ramp up on the CRT side.

Okay. That's fair enough. And then with PRIA, I guess, any more color on how things are going there? Are you getting a sense of what's kind of a no-go submission, if you don't have certain documentation or things of that nature that you need or don't need and kind of coming up with the knowledge you need to have more successful claims down the road?

Yes. We have learned from the claims that we've submitted past claims, and we've had a claim that ended up in ALJ, which gave us a very clear indication of perhaps what they were looking for. And we believe that what we've put together right now as far as the requirements for what we consider to be a solid claim or a successful claim. And we believe we have a strong understanding of that. That being said, there has not been a definitive set of criteria that have been sort of published through CMS and through the DME Max which indicate what is their definition of exactly what's required in those claims. However, based on what we've seen, our interactions and what we learned through our engagement with PRIA, we feel like the claims that are being submitted today are very comprehensive and have a high probability of going through.

Okay. Got it. That's encouraging. And then on kind of the IDN front, it sounds like there's still some budget constraints. Obviously, there's a lot of uncertainty out there, just generally speaking, do you have a sense of what these folks are looking at on the capital budgeting side later this year? Or how much of a read-through do you have on that sort of part of the business.

Yes. I mean, so as I had talked about in previous quarters, we had talked about 2024 being an off-cycle year for IDNs. We do have a lot of renewals coming up with IDNs in 2025. And those appear to be on track at the moment. So that we expect in North America that to be a solid contribution to our Enterprise Health business in 2024. We also have a lot of inpatient rehab facilities that maybe are part of larger health networks independent, independent hospitals that have capital budgets where we've been working with them for some of them for years, others for months. Those capital budgets, we've seen a little bit of a softness certainly in Q1 around that, around economic uncertainties, and we've seen those capital budgets, which were there, disappear rather suddenly. We also have many of our capital customers who receive federal grants for some of this technology and the status of those grants is uncertain at the moment as well. So while we have a strong pipeline on the enterprise business, we are seeing budget impact at least temporarily around some of those purchases. It certainly affected us in Q1. And it's something that we are preparing ourselves as we move through 2025 that this could be a bit of a longer-term fact. But to date, we don't have anything definitive that it will be.

Okay. Got it. And then lastly for me on the gross margin. It's been four consecutive quarters that you've been north of 53%. And it looks like you're clearly trending in the right direction there. I mean, is this kind of a new sort of baseline and revenues expand from here to you move gross margin higher with that?

We believe so. The operations team, Jason and the operations team have done just an amazing job as it relates to keeping our costs, keeping our costs down, raw material cost, build material costs. on the product and the impact, we frankly expected margins to be a bit higher. In Q1, it was really just driven by just the lower volume of products that we put out that had an impact to those margins. Some of it was mixed to we had, again, a fair contribution from Europe as well.

Got it. Excellent. Well, thanks for taking the questions, guys.

Next question here is from Swayampakula Ramakanth from H.C. Wainwright.

Thank you. Good afternoon, Scott. Jerome. Okay, how are you? So, just trying to expand a little bit on the two relationships that you built over the last quarter or so that's the NSM and the B&O, I mean, Bionic P&O. When I take a quick look at where their locations are, obviously, Bionic is a smaller sub, smaller compared to National S&M. Does do -- what I'm trying to understand is like, will their clientele them being in certain areas, similar areas in certain geographies? Will that be an issue for you? Or actually, that will actually enhance your product in these geographies?

Yes. So we believe that these partnerships actually enhance our value because of the strength of these organizations, and they have existing -- we have existing relationships with processing large numbers of claims through the DME Max, they are experts certainly National Seating & Mobility, is an expert on the mobility side of things with power wheelchairs and high-tech mobility products. They understand how to work with the patient and the payers and physicians around that. And when we look at Bionic P&O they are used to dealing with complex orthotics. And they, again, can really help coordinate that experience for that patient in helping them gain what they need from their physician as well as other health care providers who work with the payer to ensure that they have a solid claim. So -- they're both geared towards that for National Seating & Mobility. They are quite a large organization, so maintaining the right certifications in taxonomy on a state-by-state basis is something that they're working on and building out. So, as they build out their coverage, they do have full national coverage. So, as they build that out, the reach will expand with them. And Bionic P&O, is currently in 12 states. As it turns out, we have a lot of folks that we have that are within our growing pipeline of potential beneficiaries, we have a lot of crossovers in their states. We're also continuing to develop the programs so that we have good coverage across all 50 states to ensure that individuals who qualify for this technology have a convenient location and a convenient partner to work with. So we do believe that their expertise absolutely helps can facilitate cleaner and better submissions.

Okay. And then having these relationships, I'm just trying to understand how much of a help does it give you in terms of your G&A expenses because you don't have to have that many feet on the ground, so to speak. But at the same time, how much of that gets neutralized by the amount of pay away that you'll need to do to these two groups?

Sure. And again, as we look at the -- that was this something that we and we do ourselves, do we build this capability in-house or do we leverage experts who are out there. And we made a decision to leverage experts in this space, and that does save us considerably. When you're talking about market access and B2C business, it would require significant investment in-house for Ekso to be able to hire the number of people that we would need to be able to process all of these claims to be able to be a local point of presence as these fits and screenings are happening. It would be incredibly challenging for us to do that. So by setting up a distribution network, this allows us to leverage these much larger organizations that have wider teams with regional and national coverage. Of course, that is at the trade-off of -- now we have a two-tier mods we need to be able to support the margins for our distributors. And through the good work that Jason and his team have been doing in ensuring that we maintain good cost controls on our devices and continually improve our operating efficiency, both inside as well as through outside contract manufacturers, we are -- as the volume increases, we expect to be able to maintain adequate margins to be able to support this distribution network and still maintain margins that are within what people are used to seeing from us in those high-50s plus.

Thank you. Thank you, Scott, for taking my questions.

This concludes the question-and-answer session. I'd like to turn the floor back to management for any closing comments.

Thank you, Matt, and thank you to everyone for joining us today. We look forward to updating you as we continue to progress.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you again for your participation.