Ladies and gentlemen, thank you for standing by, and welcome to the Fourth Quarter ReWalk Robotics Ltd Earnings Conference Call. At this time all participants are in a listen-only mode. After the speakers presentation there will be a question-and-answer session. [Operator Instructions]. I would now like to hand the conference over to your speaker today, Ori Gon, Chief Financial Officer. Please go ahead sir.

Thank you, Michelle. Good morning, and welcome to ReWalk Robotics' Fourth Quarter 2019 Earnings Call. This is Ori Gon, ReWalk's Chief Financial Officer and with me on today's call is Larry Jasinski, Chief Executive Officer. This morning the company issued a press release detailing financial results for the three months and full year ended December 31, 2019. This press release and a webcast of this call can be accessed through the Investor Relations section of the ReWalk website at www.rewalk.com. 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, focus, 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. You will find the dialing information in today's press release. The archived webcast will be available for one year on the company's website at 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 20, 2020. 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, Ori. Good morning everyone and thank you for joining us today. The fourth quarter was primarily defined by three elements. Working with insurers on the detailed contracts for the broad supply of ReWalk spinal cord injury system in Germany starting in 2020, trial use and experience with a range of ReStore stroke clinical centers and preparation for the pursuit of a Medicare code in the United States. We have previously published our Q4 financial results in our recent S1 filings and noted that sales remain level with Q3 at $1.2 million and we placed 15 Rewalk personal and 10 ReStore systems. This is compared to 12 Rewalks and 5 ReStores placed in the third quarter. The increased placements in Q4 were primarily rentals where we expect the majority to convert to full sales in 2020. Sales were impacted in part by German insurers that preferred the whole ReWalk SEI purchases until their contracts were actively implemented and by the timing of capital acquisition cycle for the ReStore. Q4 2019 completed many processes that we believe are essential drivers for 2020 growth. There are five specific areas of activity that occurred in Q4. One, completion of the final details for German contracts with insurers to establish the implementation procedures to allow coverage of German spinal cord injury population. We have five groups where we completed final details of the contracts late in Q4. Two of these have been signed and the others are expected to be completed during Q1. Public announcements will occur when allowed and as each group completes their internal processes on educating and notifying their organization. This is the first step in providing broad coverage for qualified members of the paralyzed German population who wish to walk again in everyday life. It has meaningful leadership by…

Thanks Larry. Our Q4 revenue was $1.2 million with the following speeds by product and geography. 15 ReWalk personal devices place of which 11 were in Europe and four in the U.S. We placed 10 ReStore devices of which seven were in the U.S. and three in Europe. For the year our total revenue was $4.9 million with 54 ReWalk personal units place generating $4.7 million of revenue and 16 ReStore devices placed generating $200,000 of revenue. Zooming into our ReStore placement this year out of the 16 units placed 6 units were sold and 10 were rented as part of a trial period. On the SCI side we had 8 new rental purchase units placed and 4 previously rented units convert to a purchase during the fourth quarter. At the end of the year we had 14 active SCI rentals in addition to the 10 ReStore trial that I mentioned before. This rental pipeline represents $1.7 million in revenue. Our total number of SCI pending insurance cases was 145 at the end of the year with 105 of them in German and 40 in the U.S. Turning to a gross margin. In the fourth quarter our margin was 61% and our yearly margin was 56%. This is compared to 39% in the prior year quarter and 43% for 2018. These 13% increase year-over-year is due to our ReWalk personnel 6.0 increased average selling price from an average of $77,000 to $87,000 and also due to the fact that this year we did not have any significant inventory write-off related to our older rehab units. Another aspect where we show constant improvement is our operating expenses which were $3.9 million in the fourth quarter and $16.8 million for the year compared to $4.6 million in the prior year quarter and…

Thank you Ori. I'd like to further discuss the development of coverage in Germany. In the period since the code was established by the German authorities we have shifted to establishing detailed and wide-ranging contracts with the public and private insurers with the endpoint of achieving near universal coverage for spinal cord injury community. The contracts that we expect to announce in Q1 and Q2 include detailed definition of the patient's qualified, the process for trial use, training programs to be able to take one home, provision requirements for direct supply, pricing programs, service programs for five years and provision of replacement systems or provision of a new user in the event that the original person can no longer use the system. As each insurer completes their internal training with management and case managers we will publicize the status as it occurred or as allowed by each group. We believe this established process will allow the referring medical community in understanding of how the coverage works if they wish to prescribe a ReWalk for their patients. They no longer have to deal with uncertainty of supply if the patient meets the qualifications and wants to walk again. It has clearer timelines that will allow their process to occur over three to nine months rather than facing years in an unstructured process. It will finally allow the development of this market. The VA study has successfully attracted the targeted number of 160 patients and the clinical use and follow-up portion study is expected to conclude by about mid-year. The randomized study that is exclusively a comparison of the ReWalk system has an added element of daily life to the experience of a person without exoskeletal walking will provide the first level one evidence for the following primary measured quality of life…

Thank you. [Operator Instructions] Our first question comes from the line of Swayampakula Ramakanth with H.C. Wainwright. Your line is open. Please go ahead.

Thank you. Good morning Larry and good afternoon Ori. A couple of quick questions. So to start off what's the total number of eligible lives or eligible patients under the insurers in Germany that you expect to come on board in 2020?

Well, the eligible lives with all of the contracts would essentially give us universal coverage. We would cover if all the contracts are completed on the one side about 80 million of the 83 million German citizens and one of the other parts about the majority of the German citizens. So it's between public and private. So it's going to be very broad coverage once everything is in place.

Okay. Maybe I should have asked the question a little bit differently. In terms of the patients who will be eligible to use the device so that's -- what's the total number that these insurers would cover so that we have an idea?

Well, it vary by groups and timing. Specifically there are roughly 80,000 injured spinal cord people in Germany and the majority of those -- vast majority of those would have rights for coverage. Of those 80,000 by the time you look at all inclusion exclusion criteria and everything qualification that number comes down to about 8,000 or about 10% of the pool. So that's the available pool and the majority of that pool if it's a work-related injury probably almost all of them are covered. If it's a private injury, the majority would be covered. Is that more specific enough to cover your answer?

Yes. That's good.

Okay.

And then regarding the VA study. Congratulations on getting that study almost to completion. Do you have any idea in what formats the VA will be publishing some of the results that you expect, I think you said the third quarter or in maybe second half of 2020?

Well, first one of the best things about the study it's completely independent from our company and I think that helps with the credibility and it was obviously very well resourced by the VA and also give them credit. They have actually finished the study exactly on time. They accrued at the rate they said they would. So we didn't have a lot of control about that other than providing it. Relative to publishing the same is true. The overall administrative group that is charged with doing all the follow-up work estimates they finish the follow-up of now that they have all the patients roughly mid-year. So your publication cycle falls somewhere after that. That's why we said late this year, early next year but that is a government decision when they decide to publish as we're [obliged] in every way to the data and the information.

Okay. So one last question from me. Based on the agreement that you have with the VA, what sort of VA patients should we expect in terms of adoption for the device?

Well, the study fortunately very much matched our FDA inclusion criteria. So it doesn't narrow us in any way from what we actually have been trying to market just have not really had the support yet for sales that we are now seeing as we go forward in Germany and as the VA did in the study. It's really our main question as how aggressive they are now that the study is essentially complete in bringing the rest of the patients on and opening more centers because you were somewhat limited around to 10 centers around the U.S. they never really effectively broadened that even though they made some efforts to do so. For the most part there were not that many centers available for t-- so they should grow substantially. We're seeing a different approach now that we're talking to some of the sites. There's a study approved side is complete. So we're seeing more receptiveness from some centers that were not in this study. So we're optimistic there.

Thank you. That's all for me now.

Okay. Thank you.

Thanks.

Thank you. [Operator Instructions] I'm showing no further questions at this time and I would like to turn the conference back over to Larry Jasinski for any further remarks.

Thank You Michelle. For everybody who joined us today and everybody who listened to this broadcast we're very appreciative of their time and interest and optimistic about where this industry is going. So if you have other questions along the way please feel free to reach to the company directly with either Ori Gon or myself. Stay tuned for the publications as they come out and have a great day. Thank you everyone.

Ladies and gentlemen this concludes today's conference call. Thank you for participating. You may now disconnect.