Good day, ladies and gentlemen, and welcome to the Third Quarter 2017 ReWalk Robotics Ltd. Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded today, November 2, 2017. I would now like to introduce your host for today’s conference, Ilanit Allen. You may begin.

Thank you, Isaack. Good morning, and welcome to ReWalk Robotics Third Quarter 2017 Earnings Call. This is Ilanit Allen of In-Site 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 ended September 30, 2017. This can be accessed through the Investor Relations section of the ReWalk website at 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 as defined by the Private Securities Litigation Reform Act. These forward-looking statements are based on information available to ReWalk 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, rewalk.com. For the benefit of those who may be listening to the replay or archived webcast, this call was held and recorded on November 2, 2017. 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.

Thank you, Ilanit. Good morning, everyone, and thank you for joining us. Our business continues to deliver growth with sales advancing to $6.2 million or 46% growth for the first nine months of 2017 compared to the prior year period. For long-term market expansion, our major goals of achieving insurance reimbursement coverage for the ReWalk personal device and progressing our innovative soft suit exoskeleton product designs have made meaningful and encouraging progress. Let's start with commercial insurance reimbursement as we achieved a major milestone with coverage in Germany. We now have our first broad German coverage physicians with Barmer and the DGUV. Broader reimbursement coverage has been a key strategic goal for ReWalk and for the industry to allow individuals who want to walk again access to exoskeleton technologies. These coverage achievements require expansion of scientific data, favorable court release that these devices are medically necessary and detailed educational efforts with these payers over the past three years. We anticipate these positive coverage decisions will influence other major insurers in Germany and in Europe. As we previously reported, Barmer, a national social health insurance provider, which covers nearly 10 million lives, confirm that they will provide ReWalk systems to all qualifying beneficiaries that meet the specified inclusion criteria and assessment by the German health insurance medical system. As we previously reported, this group currently has 16 pending insurance claims and has already began processing claims of users, entering retraining for in-home use of an exoskeleton. And today, we are pleased to announce that the German social accidents insurance provider, the DGUV, has become the second group in Germany to allow reimbursement of the ReWalk personal device. The DGUV is comprised of 35 different insurers, which provide work-related accident coverage for more than 70 million individuals in Germany. To date, 12…

Thanks, Larry. Q3 revenue was 1.7 million compared to 1.4 million in the prior year quarter and included seven favorable commercial coverage decisions. We placed a total of 16 units, of which 10 were in the US, three were in our direct markets in Europe and three in other markets. During the quarter, we had three new rent-to-purchase units priced and eight previously rented units converted to a purchase. We currently have 25 open trials, including 20 active rentals and five claims that have completed their trial period and are awaiting a final insurance decision. Our nine-month year-to-date revenue is 6.2 million in 84 units versus 4.3 million with 80 units for the comparable period in 2016. This increase reflects our ability to convert previously rented units in the purchases and higher sales to the VA. During the year, we converted 19 rental units in total, 12 of which were placed in 2016. At the end of the third quarter, we had 218 pending insurance claims compared to our 149 at the same time last year. Gross margin improved to 41% compared to 21% in the prior year period, driven by sales mix, conversion of rental units and lower product costs. Total operating expenses for the quarter were 6.1 million compared to 7.7 million in the prior-year period. Net loss was 5.8 million compared to a net loss of 7.9 million in the third quarter of 2016. And finally, we ended the quarter with 12.9 million in cash. We've effectively utilized our ATM equity program and managed our operating expenses. As we continue to focus on our critical milestones. And with that, I'd like to open the call for questions. Operator, please go ahead with the instructions.

[Operator Instructions] And our first question comes from the line of Christian Moore from Jefferies.

Maybe just one on Restore. It was definitely helpful to hear ASP being set at $19,500, maybe if you could just take us through how you came to that price and then what your strategy will be with regards to reimbursement for that system?

We focused on price based on several metrics, but we started with the market. And as we looked at and surveyed numbers of customers and looked at what they can get for codes and payment in their rehab centers that pricing was a number which worked for them. And, of course, from an operating point of view, we looked at what the cost of goods for the device would be and what we thought we can produce it for and it hit a business model that we've thought was a very, very attractive, both for the rehab centers and for us as an industry.

And then maybe kind of probably still in the early innings here, but what do you see in terms of the size of this market for [indiscernible] for stroke patients? Do you have any view on how big it could be in the US?

Well, the number of patients is quite large, estimated when you go through every parameter that qualifies in excess of about 700,000 US and then comparable numbers in Europe and perhaps even greater numbers in Asia. But initially, we are selling to rehab centers. And between the United States and Europe, you got a universe of approximately just under 2,000 rehab centers that are readily active and they could possibly use multiple units. So that would be the initial target for the product as I've described it. We see this similar to what we learned with the spinal cord injury product. We got a very good base in rehab centers and then eventually we see development of a product a situation where we would have been taking it home, so may out years, you would see a personal unit, which would be a later approval for us.

And then maybe just one last one on the rest of the world segments, so is the third quarter that we haven't seen any commercial activity there, but last year, really picked up in 4Q. Is that something that you will be expecting again, just in terms of cadence for how we should build our expectations for the year to finish up?

For Q4 for Asia, to be specific, is that question?

Yes. That's the question just because we haven't seen any progress.

At present, most of our growth is focused on the European and US markets. What we see developing in Asia is a push primarily for regulatory clearances in some other countries, specifically Korea and Taiwan and then China to follow is our goal. But I expect most of our increased activity in Asia will be in 2018, and most of our growth will come from our successes in Germany and United States.

[Operator Instructions] And speakers, I'm not showing any questions at this time.

We are in pretty good shape then. And operator, thank you very much for your support this morning, and for everybody who joined the call. Thank you, and have a great day. And if you have other questions, you can reach us directly. Thank you.

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