Good day, ladies and gentlemen. And welcome to the ReWalk Robotics' Q4 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct the question-and-answer session; and instructions will be given at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Illanit Allen. You may begin.

Thank you, Sonia. Good morning, and welcome to ReWalk Robotics' fourth quarter and full year 2015 earnings call. This is Illanit Allen of Insight Communications, Investor Relations for ReWalk. With me on today’s call are Larry Jasinski, Chief Executive Officer, and Kevin Hershberger, Chief Financial Officer of ReWalk. This morning the company issued a press release detailing financial results for the three months and 12 months ended December 30, 2015. This can be accessed through the Investor Relations section of the ReWalk website at www.rewalk.com, and you can also access the webcast of this call from there. Before we get started, I would 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 statement as defined by the Private Securities Litigation Reform Act. These forward-looking statements are based on information available to ReWalk’s management as of today, and involve risks and uncertainties including those noted in this morning’s press release and ReWalk’s filings with the SEC. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from those projected in the forward-looking statements. ReWalk specifically disclaims any intent or obligation to update these forward-looking statements except as required by law. A telephone replay of the call will be available shortly after completion of this call for the next two weeks. You’ll find the dial-in information in today’s press release. The archived webcast will be available for one year on the company’s website www.rewalk.com. For the benefit of those, who may be listening to the replay or archived webcast, this call was held and recorded on February 25, 2016. Since then, ReWalk may have made announcements related to the topics discussed. So, please reference the company’s most recent press releases and SEC filings. And with that, I’ll turn the call over to ReWalk’s CEO, Larry Jasinski. Larry?

Thank you, Illanit. Good morning, everyone, and thank you for joining us. On today's call, we will discuss both Q4 and full year 2015. This year was transformative for the exoskeleton industry, as a path of qualified individuals, who need this technology was cleared by the US Veterans Administration and by many individual insurers. We have now created a solid foundation that will enable us to move these life-changing technologies into mainstream use as a part of everyday life. Some highlights. In 2015, we completed our first full year as a public company, placing 73 ReWalk Systems around the world, of which 53 were for personal systems. And we generated a pipeline of 801 qualified leads. We also finished Q4 having placed a record 23 personal systems. In Q3 2015, roughly a year after FDA clearance, we introduced ReWalk 6.0, our sixth generation device and the most advanced and only exoskeleton for personal community use available on the market. We retain our first-to-market advantage in this emerging market today and for the foreseeable future. Our strategic reimbursement efforts helped more than 28 ReWalker secure coverage for the devices in 2015 and we have a solid pipeline of pending insurance claims as we enter 2016. With two successful appeals last month, I am confident that our strategy is working and result in many more of favorable decisions. At the end of the year, there were two very positive initiatives from the Veterans Administration, regarding a new clinical study and the establishment of a policy for all veterans to procure ReWalk Systems. First, relating to these four-year multi-center clinical study, regarding the benefits of exoskeleton use in daily life. ReWalk will be the exclusive device used as it is the only FDA cleared exoskeleton for personal and community use. Separate from this…

Thanks, Larry. Our revenue for the fourth quarter was up sequentially by a $170,000 to $1.3 million, compared to $1.2 million in the third quarter of 2015. We placed 25 units during the fourth quarter, compared to 23 during the prior quarter. Due to a shift in geographic mix with lower sales to distributors, partially offset by increased sales of personal units in our direct market, we had slightly lower sales year-over-year during the fourth quarter. For the full year, our revenue was $3.7 million compared to $4 million in 2014. These results again reflect a significant positive shift, the personal units and insurance reimbursement in our direct markets in 2015, as compared with rehabilitation, self-pay and distributor sales in the prior year. Our gross profit in the fourth quarter was $34,000 and $246,000 for the full year, compared to 2014 gross losses in the fourth quarter of $529,000 and $621,000 for the full year. In 2014, we recorded a one-time charge of $466,000, by the early settlement added discount of the BIRD foundation grant. A positive margin in 2015 reflects the benefits of having fully transitioned our manufacturing to Sanmina, partially offset by cost associated with conversion to the ReWalk Personal 6.0. R&D expense increased to $1.7 million for the fourth quarter of 2015 compared to $1.2 million during the same period last year, reflecting increased investment in our research and development programs and clinical activities. For the full year, R&D expense was $5.9 million compared to $8.6 million in 2014. Our full year R&D expense in 2014 included a one-time charge for non-cash stock-based compensation of $4.1 million, associated with our IPO last year. Excluding this one-time non-cash item, R&D expense grew by $1.5 million in 2015, reflecting our investment in ReWalk Personal 6.0 our next generation device…

Thanks, Kevin. As I stated in my opening remarks, 2015 was a better year for ReWalk and we entered 2016 with significant momentum. We announced two important developments for the Department of Veterans Affairs that will have both immediate near-term implications for our business as well as long-term benefits for our industry and the FCI community. Combined with our multi-faceted reimbursement efforts that are beginning to show results, we are confident in the opportunities for our business to maintain momentum and gain further traction in 2016. Earlier this month, we announced that our first external appeal of an initial coverage denial by a health plan in the Northwest US was successful. The Independent Medical Review Organization determined that the ReWalk is not an experimental investigational technology, citing evidence in current peer review that ensures to support the use of ReWalk for patient with spinal cord injury. Additionally, and equally as important, the Independent Medical Organization’s report concludes that powered exoskeleton [indiscernible] provide non ambulatory individuals with spinal cord injury, the ability to walk at modest speed. The Independent Review and report concluded that the ReWalk was deemed medically necessary for the individual. This man was a surgeon. He suffered a spinal cord injury and remained tied to a wheelchair until the ReWalk became available. Saving the ReWalk under his insurance plan will allow him to stand up and walk at home and at work. This endorsement by an Independent Medical Review Board validates the extensive peer review literature, the quality of our product and the importance of our dedication in efforts to support patients to gain access through their insurance providers. We have similar success and a legal review of an appeal in Germany, where an employer-based fund and the local social and youth agency initially rejected the claim citing…

Thank you. [Operator Instructions] And our first question comes from Kyle Rose of Canaccord Genuity. Your line is now open.

Great. Thank you very much for taking the question. Can you hear me all right?

Yes, we can.

Fantastic. And congrats on all the progress in ‘15 and in the quarter. I just wanted to see if we can get a little more color on the leads in the pending claims. Looking back on ‘15, you’ve done a great job of adding your qualified leads, as well as given us some metrics around the claims there. Wanted to see if you can give us an update from a timing perspective as far as what you’re seeing from these lead transitioning and the claims and then some of the claims actually moving through the appeals process? Just trying to understand if we’ve got those 106 claims, where are those claims in the process and how should we think about that cadence as they move through the process?

Well, first on the leads, we are basically staying in the pattern we had given before in terms of trying to highly qualify these leads. We think that will help us with the process and we’ve learned to focus a little more on specific insurers and we've structured our processes all around that because we think they give us a greater chance of success. Our timing still, we need a little more experience, we can give you of the 28 we have, there are 37 decisions, 28 were positive. The timeframe on those still vary greatly. We have a couple that were short of few weeks and a couple of that went all the way to nine months. So we don’t have big enough distribution yet to get predictable, but the far end of it seems to be in the six to nine months’ cycle and we think all of the work we’re doing to educate and put out data will shorten the cycle, but I don’t have data to show it yet at the pace at which we’ll be able to bring it down.

Okay. That’s very helpful. And then when we think about that process, we’ve seen a lot of announcements about increasing payer traction and you’re talking about the positive decisions on the 28 of 37, what kind of data are the payers really looking for when they're evaluating those, those individual cases and when you think about the economic data and the trial that you're going to start this year, what impact do you believe that that kind of data can help drive in some of these conversations moving forward. So, maybe we're moving from a 76% approval rate up higher from that range there.

Most of the questions, we get early on are use of the product. So, we do see some direction where there are looking to trial or rent the product for a while to then make a decision. That's a lot of - for a little bit more quickly. But it's a pattern that we see in different places. I think to your question on the other thing that we see the most, more from the larger insurers is the comments. While we still believe this is experimental or not necessary medical necessary. And that's where the independent appeal that was just awarded in the Northeast as particularly - Northwest excuse me, it was particularly important. Because that was completely independent of us and the insurer and they ruled specifically the two things that we have heard frequently. And it is not experimental, there is plenty of peer review data that supports this and that it is medically necessary for the individual. So, we think that that is a landmark decision in that. I think it will influence other decisions, but until it does, I can't prove to you that. But that would be predictable. In terms of data, I believe the larger insurers, whereas we're seeking more national policies that will help us. I noted we are looking to put out about four papers in the next year and they will include a meta-analysis of data that's out there. Health economics papers that are focused on year-over-year return of investments for insurers single payer type papers and Medicare papers. So we are building a database I think that will move all of the approximate 200 insurers that are in the universe forward. But they each have different needs.

Okay. That makes sense. I appreciate the color. And then just lastly and then I'll get hop back in. With regards to the VA study, I really appreciate the color on that. It seems to be a very powerful study. When I think about that, understand the cadence would be over four years and perhaps the VA as far as how they want to enroll and when they want to enroll. But how should we think about patients enrolling there, I mean and then the initiation of that study. I mean how many qualified or when you think about the qualified leads how many of those right now are in the VA. And could we see the VA study turn on in the first half or will that is that expected to be something that might be more weighted over that four-year time period.

This is a very large study structure that has been put out by the VA. It will take some time for them to get the 10 centers up and running. They have funded this at a high level both in terms of personnel, equipment and it is in this current calendar year budget. I can't give the specifics of the VA in terms of speaking for them, but in their public data they're talking about beginning the training in mid-summer and enrolling the patients in the fall. So, that's when they should be going and I believe they're going to start at not all 10 of the centers, I believe they may start at 6 and go to 10, but again that is in the control of VA not of the company. But by all funding, all the public data that's available in clinicaltrials.gov. This study will be active this year. And the centers that are involved frankly are already recruiting and thinking about their patients. So, I think the limiter will be more when they get their own people trained in these centers. They get their equipment up and running. I believe they'll be able to hit the ground with some patients ready in the latter half of the year, since it's been a such a high level of initiative in the VA.

Great. Thank you very much.

Thank you, Kyle.

Thank you. [Operator Instructions]. And our next question comes from Raj Denhoy of Jefferies. Your line is now open.

Hi. Good morning.

Good morning, Raj.

One if I can follow up a little bit on the leads question. Over the last you started to give us the leads which are quite helpful. But the last couple of quarters I think it's kind a roughly 400 total qualified leads to 600 to 800 now. But the number of units that you're selling is still in mid-20s, and so I guess we're struggling with is the case at which these then convert to commercial sales and the reason that's still intriguing is that you can use this 75%, 80% sort of conversion rate once they get submitted that’s a significant number of units you could potentially have in your backlog, but the pace at which they are developing is still a little slow.

Well, we agree. We think it’s a little slow too. The work that we are trying to do with the insurers in education efforts, we believe will help speed them along, but that will be something we have to demonstrate overtime. We’re starting to at least see now, as I’d mentioned there are roughly 200 insurers in United States that we might have targeted being slow, we’re starting to get some now that had multiple decisions come through and I'm hoping that and expecting that the second or third time through will become more routine than the very first time, where you go down the path of educating the case managers at a great level of detail. And of course, the goal overtime is to get these in the same category as the VA where there is a national coverage decision. Both those will help pick up the timing, but we’re relying on the action or reaction of the insurers at this stage so our work is primarily given in every piece of data they want and believe that we will get some momentum from it. I also think the two court cases particularly the one in the Northwest will have an impact in the United States and if you look our distribution leads we also have many in Germany and I believe the social court decision will help us there, as we can point to these increasingly now with the same insurers. So that is part of our expectation that we will be able to get the 128 the majority of those through in this calendar year. And then of course, we’ll put in a lot more that hope we’ll get to a shorter cycle.

Okay. And just so, a quick clarification question, so the 800 leads you have and then you just mentioned, you have a 128, they have been submitted. So the platform of qualified lead to a submitted lead, what does that look like? How long does that take before you submit?

It’s generally not as long. We have more control over that process. It’s about a six to eight-week process most of the time and just to restate where they are. Once we have an initial contact, we qualify to make sure that it meets all the qualifications from an inclusion, exclusion criteria of that they live here at training center that they have an insurance coverage type that actually can possibly pay for this and so we focus on that first, we then go through a clinical nurse who will take it to the second level, we'll take the patient through to an evaluation and trial with the product and then to get the submission and we need a prescription from the doctor, a letter of medical necessity, their PT records, and a lot of general data we put in so we’ve got it down to a relatively standardize package now, and the main limiter, at the rate at which we can get the doctor to write letters of prescription and that’s usually a matter of weeks more than the longer process with the insurer.

So, some should beat the majority of 800 eventually gets submitted?

The majority should get submitted. They have to. The one area where we tend to get the most fall out is in valuation. Even though they have been screened properly through the medical side, when you put them in there, you may learn new things that you didn’t pick up in the medical. So, I think a large percentage of them will, but historically, the percentage is clearly not a 100%.

Okay. So actually two last questions, if I could. So, the VA coverage policy, quite positive obviously your actions are quite positive. But in terms of the timing on when you could actually see the VA start to purchase units to sort of satisfy that in a big way. Have you had any updates in terms of when that policy will actually be enacted?

Well, the policy is active. We’ve already sold two units. One in the East and one in the West. So that we’re very positive about. I think the key to becoming highly active where a lot of patients are coming through is the rate at which the DA is able to hire training staff in the clinical centers that are bringing individuals forward and that each staff gets up to speed on those. So, I do believe it will not be the fastest implementation it will probably occur at what I politely refer to as government speed. But we’re encouraged as we have a brand new ReWalker in the Northwest for example that came right out of the necessity.

Okay. That’s helpful. And then just lastly, anything you can offer in terms of guidance in terms of the numbers you think you can place here in 2016 commercial units, you can place in 2016.

So, right now, we're expecting that we'll continue to see the sequential quarter-over-quarter growth and we're favorable in many areas that we'll get some of our claims through; that we'll have success with both the VA study and the VASOP. And we believe we'll see some growth in Germany. But we're not giving specific guidance beyond that at this time.

Okay. Thank you.

Okay. Thanks, Raj.

Thank you. And that does conclude our question-and-answer session for today. I would now like to turn the call back over to Larry Jasinski, CEO for any further remarks.

Well, I would like to thank everybody for their time and participation on the call. We appreciate your interest and look forward to speaking to you more about our products and progress in the future. So, thank you very much.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program. You may all disconnect. Everyone have a great day.