Good morning and welcome to the Snowdon Company May Virtual Investor Conference. The next company to present is Lifeward Ltd. We have with us the CEO, Larry Jasinski, and the CFO, Michael Wallace. As always, this will be a 30-minute presentation. We should have a few minutes at the end for Q&A, so if you do have a question, you can type it into the Q&A tab at the bottom of your screen. With that out of the way, it's all yours, Michael and Larry.
Jim, thank you very much for having us here, and for everybody attending, thank you for joining. You know, much of this presentation will give the milestones that we've achieved, but the really relevance of this presentation is how these achievements have set up our future, and that's really a lot of what we'll talk about. Next slide, please, Mike. The forward-looking statements are important, and I ask everyone to read them, but I'll look at our positioning for future growth, which is really what all of our work has been done over the last decade. You know, we have leading innovative technologies that fundamentally change lives. That was our mission, that is our goal. Now they're accessible, and we're going to be able to commercialize them. The second bar you see here, growing reimbursement coverage.
I'll give detail as we go through it, but now access means they get paid for. Dropping down to the fourth bullet down here, the capacity and capabilities for success. We have the ability now to operate both in the clinic and the home markets to promote all of our products. The last one on here is the path for profitability. We have done a lot of changes over the past 12 months. These are causing us to have a reduction in operating loss as they begin to flow in, particularly in the third and fourth quarter of this year, and we still see profitability at some point in 2026. Next slide, please, Mike. I'll start on the right side of this slide. Look at the picture. This is the founder of our company, Dr. Amit Goffer.
What I think this signifies more than anything else is the six people behind him are all fully paralyzed, and they're walking and living better lives because of him, and that was his goal when he created the product in the first place. If we come over to the first, there are seven different firsts, and we probably have about 40 of them total in the company, so I'm going to narrow it down to about four of these. Just the creation of a 510(k) de novo and CE mark coverage, we were the first company to get there. We were the first company to take a NASA-derived application using differential air pressure to alleviate the effects of gravity for better healing in some people, and a different product of ours.
Third, we were the first company to get listing in the German Medical Device Directory for exoskeletons. Those three things really drove our ability to then progress towards coverage. The last bullet on here in particular is that we achieved Medicare coverage for our category, for this industry, for personal exoskeletons one year ago. We're now in the execution mode. Let's switch to the products for a minute. Next slide, please. I'm going to give a quick portfolio overview, and then I'll go into each product in some detail. On the far left, you see a young woman sitting and talking. This is everyday life. This is what Dr. Goffer envisioned for our company, and we're succeeding at in big numbers now.
The second one picture you have here is the anti-gravity system, and this reduces the effects of gravity for healing and for different elements of your lifestyle. We will talk about that as we get to the product line, but it is a very unique technology that is very well received in the clinic for the patients who need it. The third picture, you see a woman who has wheeled up in a wheelchair to an apparatus that looks like a cycle. That is exactly what it is. It is a MyoCycle FES, functional electrical stimulation bike. What this does, it allows them to therapeutically cycle in the clinic or at the home, and it is a very effective and easy-to-use product. To the far right, you see the Restore Exo-Suit, and this is really for restorational functional walking, and it tries to give you normal walking patterns.
Let's go on to more detail on the ReWalk. Next slide, please. Let's talk about the main features and goals, and then I'll talk a little bit about how it works. On the left side, unprecedented freedom. What does that mean? You can go anywhere in the real world within reason that you want to on these. You can walk down the street, you can walk on pavement, you can walk on carpet, wood, you can go up and down stairs, you can get over a curb, you can go places that you want to go. That's essentially what we mean by freedom. We do it with the second bullet here, a natural gait.
If you watch how the feet strike the ground, and we'll have a video in a minute, it's the same way your foot will go from heel to toe when you go down on the ground. It's a very easy, efficient, and safe walking component. Robust construction. We have nearly 1,000 of these out there now over the years, and they're robust, they're lasting, they've done marathons. Not what they were designed for, but they showed they could hold up that well. They can be used in everyday life effectively for all users, and when they do need help, we have a very good service network to manage it. The last one, the vibrant community. This is our best teacher to an extent when one patient talks to another about what works for them, and they encourage each other to use it.
Those elements are very important for us in how the market has developed in these early stages. On the right side, you see a picture of an exoskeleton, and how does this thing work? Let's start at the bottom. You see two white things that look like insoles. They go inside your shoe. You can wear any shoe you want, tennis shoe. You can't wear high heels, but any other shoes, regular flat type of shoes. If you look on the side of the calf area and the side of the thigh area, you see the black tubular structures there. Those have motors, gears, and microprocessors. They specifically will direct and move the knee and the hip, all in accordance with the gait pattern and speed that you want with the microprocessors.
At the top of the system, you have a software component, which is all of the gait and safety management. You have the batteries, which gives this thing power for all-day use. Our definition of all-day use is four hours of constant walking. You have the sensors, and the sensors are how you can tell this thing when to walk and when to stop and when to go up and down stairs and things of that type. Let's go to the next slide. The product has continued to evolve. We've listened to our customers, and this is the latest version just launched in April of this year. You see the title, Smoother, Smarter, More Powerful. That's what it does. If you look on the left, more control.
What we've done is given the individual an ability to start and stop this effortlessly as they want to walk down a street. We've given them batteries that give a longer life and seamless motion in the stairs and the way the software curbs as they're walking. We've given them smarter walking. In other words, we're giving them data on what's happening with their walking now at a high level, and with a smartwatch, we are able to transmit it back. We've made the training easier in this particular design. To the right side, you see a list on smoother movement. This is having multiple walking speeds. On a crowded street, you can go slower. If you're with a young child, you can go slower. If you're going and want to go for a nice long walk, you can go faster.
You have the ability to control it now with the crutch control and setting things on your smartwatch. You have more power. We put in more battery power than before, which makes it last even longer for those who want to go for longer walks or use it in more situations. The last one's a natural fit. This device is matched for the body of each individual user. The length of your calf and the length of your thigh and the size of your hips and the size of your footplant are all precisely made to line up perfectly with your joints for safety and for effectiveness. We have a large number of software settings on here that we tailor to the individual's need. A shorter person will have a shorter stride. A taller person will have a longer stride. We'll adjust power controls.
The device is very much aligned with the specific patient's needs, and those are great design features for this. Now, once you're using it, let's go to the next slide. The product has and has been paid for in part because of the proven health benefits. Look at the picture on the right. It's very symbolic. Follow that arrow, and you're going to be healthier. Start walking. Now, if you look at the specific health concerns that we are addressing, improved bowel function makes a big difference in quality of life. It's a function of how much time you have to put into it every day, how much assistance is needed, and how regular are all those improve substantially once you're walking again. Reduced spasticity, which is a very difficult thing and requires medications.
The more you're walking, the more you can reduce that and get off those medications. Same thing on pain reduction. As your musculature, particularly in the core of the spine, improves from walking, we have demonstrated that these patients are able to take no or less pain medication depending on their own situation. For these individuals, they also promote long-term health. Cardiovascular fitness is giving them increasing oxygen consumption. It elevates their heart rate, and it reaches at least moderate exercise intensity levels, and many individuals don't get that. They can't get that in a wheelchair, and that gives an improved body composition. These are things that really matter. I'd like to have you listen to just one minute for a new ReWalker that's just gotten her system. Mike, could you go to the next one, please?
I'm used to KFOs, and with KFOs, you're using a lot of your arm weight. With ReWalk, I was able to trust the machine and weight bear and use less of my arms, which is very good when you're constantly using your arms to wheel yourself around. So me and my mom go on walks with my ReWalk as well as, as I mentioned, therapy. Since using ReWalk, I definitely see a significant difference in flexibility. My waist is a lot less tight, as well as being able to put shoes on, getting my foot on my leg, different things like that, as well as just a mental boost, being able to, like, knowing that I can get up whenever I want to walk around my apartment, see the world at a different view, you know, and cook standing up. It's just, it's a mind booster for sure.
We always love to be able to get the feedback, and when we look at our and talk to our users, what is specifically important is many of them have wanted these products for years and gaining access. So Mike, if you can get to the next slide. There we go. Thank you. In the U.S., if you're a veteran, it's covered. You can get it. If you're someone under Medicare, it is now covered with the policy that's had we had here. Those are the biggest, largest groups that are available in the U.S. We've also just recently announced that a top 10 insurer with the new ReWalk 7 elected to pay for the first of the units that they have processed. This is the first one post CMS.
That is important, and we as a company strategically will put a great deal of emphasis on expanding more into the commercial market to allow just to realize the potential. Fourth, we've expanded our relationship with workforce compensation. In the U.S., we've worked and set up a partnership with a company that is extensively servicing that space. They will help us in both lead production and processing. The growth for ReWalk is very much driven in the U.S. by coverage, the access, as you saw with the young lady that just walked. In Germany, we've had coverage a little bit longer, but there are some very good things in this, as it has also grown a little bit. You've got about 80 million lives that are covered under their workman's comp. That's the DGV workers.
We have contractual coverage now with 45% of insurers, and we recently just got the contract that we announced with Barmer that's included in that total. They're one of the leading companies in the space and have set up a very comprehensive contract to take care of their patients. We're thrilled with that. Access was the last major hurdle for us. Now it's execution, and that is where we're working. Let's take a look a little bit on the market size. Mike, if you can go to the next slide, please. The ReWalk market potential, if we were looking at this, the total numbers you see in the upper corner here, we've got just under 300,000 in the U.S., 75,000 or so in Germany, and a much bigger global total. We have access primarily to the U.S. and German.
Those eligible candidates, the arrow you see in the middle, those are the ones that meet the clinical inclusion criteria, don't have exclusion criteria as far as we could tell, and are qualified. We qualified that down another level to, okay, how many of them are insured? Those that have a reimbursement pathway where we currently have a contract adds up to the numbers you see in the middle of the slide. There are about 15,000 in the U.S. and about 2,000 in Germany, so about 17,000 or so are available. That gives you a total addressable market quite large. We've got to penetrate it by a relatively small amount to reach our goals for profitability and growth. I want to switch to our second product.
The picture you see on the right is the AlterG, the anti-gravity system that is used for a variety of indications. Let me first describe how it works. The young woman you see standing in the device to your right, she put on a pair of shorts that has a connection on the top of those shorts, a zipper that goes on very easily, and she zips herself into this. She is walking with the aid of a half-moon-shaped air device that lifts her body to a preset amount that she wants. She could set whatever is what she wants to walk on, 10% of her body weight or 90% of her body weight. This took her less than one minute to get in and less than one minute to get out. It's really an easy setup.
For the device itself, it is highly calibrated, so it is very accurate for what the patient wants. There's about 6,000 units globally. This is a pretty well-established product in terms of use in some of the markets, but there's very good growth potential, particularly with the new product we've launched in the past year. Coming to the market size, next slide, please. The AlterG, if you look, we work in three different markets. We work in inpatient facilities. We work in outpatient clinics, which are the larger numbers. We also have these to most professional sports teams and many other high-end programs, particularly college programs, who are getting them about as much as the pros these days. If you look at the addressable market coming to the middle, in the U.S., we've got about 14,000 clinics we could target.
In Germany, we have got about 3,500 and globally about 40,000. We work with the AlterG in all markets. The ReWalk is primarily Germany and U.S. We have a distribution organization that's extensive outside those two countries for the AlterG product line. It has a good addressable market. Of the 6,000 we have out there, there are multiple units in some clinics. There are about 2,500 current clinics. Our ability to expand is reasonable. The new product we launched last summer, the Neo and the Neo Plus, are state of the art and have that product line fully refreshed for us and also give us a particularly effective margin. Next product, please. Okay, here's the last two. Let's look on the left side first. You see a product that we distribute. It's called the MyoCycle FES, functional electrical stimulation cycle.
A user just rolls up to this in their chair, attaches their chair to it by a hook, and attaches the electrodes and other pieces onto the leg. This is a particularly easy product to use. By the way, it is designed, it is very functional. It is a version for both in clinic and a version that is available for home. We have the rights to sell in both markets now. That was part of our expansion. What has this proven it does? It prevents atrophy. It reduces spasm. It increases blood flow, and it increases the range of motion for these patients. It is a very effective product. For people who have a ReWalk, everyone who has ever asked for ReWalk was probably a candidate for this. Many of our patients have both.
They use this to exercise, and when they want to go out for the night, they go in their ReWalk. It's a good complementary product to ReWalk. On the right side, you see the Restore Exo-Suit. This is a soft exoskeleton. You don't need the rigid support. This is primarily for stroke patients, presently for their labeling claims. What you see here is a footplate, kind of what you saw in the ReWalk before, inside the shoe that's inside her right foot. Then there's a calf device which has a cable on it that lifts the toes and lifts the heels in sequence with what the sensor on the healthy foot tells them to do. It's powered by a motor and a battery pack that is in that belt around her waist. What does this do?
What is the unique ability of this? It gives you dorsiflexion, lifting the toes so you can clear and walk in a straight pattern and lifting your heel and propelling yourself forward to propulsion. Those are the two features that this stroke patient needs to relearn. And this product has shown to be quite effective at that, including in some randomized trials. What we're trying to get is symmetry in their forward propulsion as well as advancement of the limb as they're moving forward. Let's talk a little bit about the market we're in, rehabilitation in general. Next slide here. We have added a couple of product lines. It's made us a little more efficient with our sales, service, training, and reimbursement organization because we have more products to work through. We're in an industry that's attracted for future consolidation. This is a long-term play.
If you look at most of the companies in this space, there's a large number of them in the zero-10 million range, and then a relatively small number that are in the bigger ranges that are out there if you look at the companies. This fragmentation, I think there's some future potential for this industry as we develop. I'd like to move it over to Mike to talk for a couple of moments about the financial progress we've made. Mike. Yeah, thanks, Larry.
Yeah, so this slide just gives you a snapshot of the progress we've made over the last several years as far as growing the scale of the business with the revenue growth that you could see here, going from essentially a one-product company several years ago to a multi-product company now and taking our revenue as we expect to get to the $28-$30 million revenue level this year. As we grow scale with the top line growth and we add more products to our portfolio, we have shown expanding gross margins. This shows you here where we expect the gross margins to expand to in this calendar year. While we've done this, we've done this growth very efficiently.
This last graph to the right just shows you that we've been able to add a lot of this cost, excuse me, add a lot of this revenue and this profitability and accommodate it with a relatively fixed cost structure. The acquisition of AlterG allowed us to find a lot of synergies and operating efficiencies by reducing redundant functions and redundant capabilities. We've really been able to fully integrate all of our product lines into our structure and allow us to accommodate this growth that we've shown without the corresponding increase in our cost structure.
Thank you, Mike. I guess I'll wrap us up here at the back end. This is the slide we put at the very beginning, but I tried to show you the fundamental technologies we have that change lives. I think you got a good initial picture. The reimbursement, our nice government and private insurers that we simply didn't have years ago, and we've gained quite a bit of coverage. We believe we built the team, as Mike, and we built it efficiently, as Mike said. The path to profitability, we still believe and see as appropriate for where we can get in the coming months. Our last slide. It's always to have a good picture. You can see, look at the smile on that ReWalker's face.
It may be because of all the people around him, because that may be a little bit of it, but I hope it's because he's walking and standing with a group of people. This primarily is the support team that does the training and service and reimbursement coverage more than anything else. Jim, we'd love to answer some questions for the audience and talk about anything that our individual investors would like to talk to you about.
Great, great. Thank you, Larry. Can you spend a few minutes talking about the changes last year with CMS and the reimbursement process and how that goes right now?
Okay, I'll be a big picture. January of last year was the date where we were given and placed in a category of lump sum payment. We were defined there. In April of last year, we had a price established for the product. They set a price at approximately $91,000-$93,000, depending on the point in time. We had initial coverage. We began submitting a number of claims and working with the MACs. It is a very unique product, and it was put in the category as an orthotic and in the brace category. It has not been processed particularly efficiently for the early part of the year as they were learning about the product.
We've had a lot of later discussions with CMS, particularly in the last six weeks, as we found them really trying to work with us to get into a cadence for these and explain what they were looking for to make sure that we are paid relatively quickly and can provide this on a large scale. We believe we made good progress on that, where we're going to shorten the timelines now to the submission, approval, and payment cycle going forward and get predictable. That's not unusual in something that is this innovative and this unique that goes into a system that has to figure out how to make it work. We appreciate where CMS seems to be going, and we'll report back as those numbers develop. That's the primary reimbursement with CMS. I can cover other reimbursement things as you want.
I guess big picture, though, it sounds like the process is a lot better than it was 18, 24 months ago.
Yes. It is covered is the biggest thing. In the past year, it is starting to get more efficient because of the collaborative efforts of CMS.
Can you talk about the process? How do you identify an eligible candidate for the ReWalk? How do you contact them and fit them? Can you put us through that, help us understand that process?
are three areas we work on. We do a lot of social media work. We place a lot of ads and try to work through keywords and things to develop it. We get thousands of leads through our social media and networking efforts of that type. That has a relatively modest yield because many of the patients do not qualify. It is still an effective area where we get a large number of our patients. The second major area we look for is referrals from physicians. We get a much higher yield from that group. The most important thing we can do at this stage is educate the physicians at a high enough level where they understand the inclusion and exclusion criteria.
They understand that there's a full supporting company that will help them through the reimbursement and push this across the goal line for the patients if we can. A lot of our work is educational with either key opinion leaders or with individuals. The third area, we're trying to work with some of the larger institutions. We refer to them as centers of excellence and perhaps key opinion leaders in many of these sites. We are working to have clinic days and work with these groups, for example, where they will have a ReWalker come in, demo the product, and talk to others, and we will be able to try to set up some trials. These are the fundamental ways we're trying to build the awareness, which results in leads. We have a very effective leads processing group.
Once it comes in, if anybody wants to go on, they go to our website, they fill out the information. We have a qualified person that will call them and do an initial screening. If the initial screening works well, we'll move it on through the system and help the patient down the path they want to go on. We've built pretty good infrastructure here to bring in claims that match our financial goals too, by the way. We're kind of, okay, how many do we have to yield to be able to hit our sales goals? That's essentially where we're landing through those different types of methods.
The improvement you had in gross margin over the past 12 months, is that primarily due to the mix of ReWalks as part of the total sales mix?
Mike, I'll let you have that one.
Yeah, Jim, it's a combination of a few factors. You're right. Part of it is a function of the mix of products within our portfolio. As we move forward and we continue to try to add more payers to the ReWalk payer mix, that will also help us over time. We're trying to do more with commercial insurance, more with workers' comp. All of those are contributors to the margins. At the same time, there's also a scale factor that I alluded to earlier where we do have, to some degree, a fixed operations capability and set of resources. As we grow the top line, we're able to leverage those resources more efficiently, as well as as we grow our volumes, we're also able to procure parts more efficiently and at a better price and those kinds of things as well.
The growth in the top line has a lot of additional benefit to the gross margins just through that additional scale that we gain.
All right. Can you talk about how the products fit together? You have four or five distinct products. ReWalk, it sounds like that is going to be the biggest one, but the other ones are not insignificant. How do they fit together? Do you use the same Salesforce? Do you use the same revenue cycle management team? How does that all work together?
They fit together really well, and it is part of why we assembled these four products. Yes, one Salesforce, one service organization, one training organization, one payment organization, and a single management group for managing all of this. Now, why do they fit together strategically? We, as a business, have to be in the clinic because that is where we are getting our referrals for ReWalk, but it is also where they get their training done. Having a big footprint in the clinic and connectivity to the clinics matters to us. By having a few clinic products that we can go in and build our relationships with. You have the AlterG, you have the MyoCycle clinic product, and we have the Restore. Those are all clinic-based products. We are also trying to send some of these products home.
The other part of our business is the ReWalk going home and the MyoCycle home product going home. Any patient who's a lead for a ReWalk is a patient potentially for a MyoCycle. By broadening our arrangement with MyoCycle, we were able to take every lead we've ever gotten in ReWalk and, okay, here's some new leads. They work together quite well if you're working in the clinics that train and take care of these patients and refer these patients. If we looked at future synergy, you'd look at things that met those characteristics, the neighborhood in which we're working.
All right. One financial question. What revenue do you need to get to achieve cash flow breakeven, and when do you think that happens?
Mike?
That's a good question, Jim. We've been very successful at bringing down our cost structure. We really focus heavily around what breakeven revenue needs to be for us. Due to the efficiencies we've been able to wring out of the organization and our ability to bring down those operating expenses to accommodate the growth that we've been able to generate, we estimate that we need to be somewhere in the $40-$45 million revenue range in order to be able to accomplish breakeven. That's both from a cash standpoint as well as from an operating profit standpoint. Like I said, we think we're going to do between $28-$30 million of revenue this year, and we're certainly trending in the right direction to get to that $40-plus million revenue range for 2026.
We still believe 2026 is going to be the year in which we're able to accomplish these objectives.
All right. And then last one from the audience. Where are the products manufactured? Is there any issue with the recent noise about tariffs?
We have got two elements. The AlterG products are manufactured in New Hampshire through a contract manufacturer. The MyoCycle products are manufactured in Florida. The parts for those primarily come from the United States. The ReWalk product is manufactured in Israel. There is a protocol for disabled people's products that generally exempts it from the tariffs as a final product. We may have to deal with some of our parts, but we are in relatively good shape as far as we could see from the current tariff questions.
Okay. All right. We are out of time. If anybody does have questions, I'm sure that Michael and Larry would be happy to answer them if you contacted them directly. Thank you for the presentation today. Very enlightening, and hope to see you again soon.
Thank you, Jim.
Thanks, Jim.
Bye-bye.
Bye-bye.