Good day, ladies and gentlemen. And welcome to Ekso Bionics Second Quarter 2015 Company Update. 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. I would now like to introduce Chris Tagatac, Director of Investor Relations for Ekso Bionics. Please go ahead, sir.

Thank you. Welcome everyone and thank you for joining the Ekso Bionics second quarter conference call. On the call with me today is Nathan Harding, Chief Executive Officer and Co-Founder; Russ Angold, President of our Ekso Labs and also a Co-Founder of Ekso Bionics; and Max Scheder-Bieschin, our Chief Financial Officer. Before we begin the call, I’d like to remind you that today’s discussion contains forward-looking statements. Actual results or outcomes could differ materially from management’s expectations and plans. Please review our most recent annual report on Form 10-K with the SEC and other SEC filings for a description of important risks and other factors that could cause results or outcomes to differ materially from management’s expectations and plans. The company undertakes no obligation to publicly update or revise any forward-looking statements. Turning to our commentary today, there are three key messages we’d like you to take away from today’s call. First, we believe the path for exoskeleton to becoming standard of care and rehabilitation setting is clear than ever. The market has been very receptive. And while it will continue to take time, we have a clear set of steps we’ll take in the next 12 to 24 months to drive broader adoption across the largest share of the marketplace. Second, we believe Ekso Labs’ both the government development projects and the industrial exoskeleton business are showing good progress this year. We’ve already announced that we expect engineering services to grow from $2.4 million in 2014 to over $4 million this year. The commercialization efforts for industrial exoskeleton are proceeding with major customer field testing showing promising results. Third, the investment that company has made and continues to make in our overarching exoskeleton technology positions us to certainly [ph] be able to leverage our technology across many exoskeleton applications. And we believe will have multiple opportunities to monetize our extensive exoskeleton IP portfolio. With that I want to thanks again for participating today. And now I will turn the call over to Nate.

Hi everyone. Thanks for and Chris for the introduction. I’m also excited about introducing my Co-Founder Russ, later on the call. Were making good progress in Ekso Labs and really moving things forward with our efforts to commercialize our able-bodied industrial exoskeleton. So, I thought it would be great for you to hear directly from him on the progress we’re making. With today’s update, we’d also like to spend a little more time than we have in the past on two topics. The first is how important variable this has been and will be for differentiating our products. The second is the status of clinical trials that have been conducted, those currently being conducted and trials that are being planned for our medical exoskeletons. We’ll soon be shipping to European customers, our next generation of Variable Assist with the release of the SmartAssist package. With SmartAssist, we continue to build on our strong technological and IP lead in the medical exoskeletons space. The SmartAssist package will add a new FreeGait mode, a new mode for the therapy late in the recovery process called FreeGait and it will allow the attachment of the leading commercial functional electrical stimulation system to facilitate research into the use of functional or electrical stimulation in conjunction with Ekso. This system will allow the Ekso to stimulate the muscles of paralyzed patients which is a long standing therapy in the physical rehabilitation world. This new package is really exciting because it expands the addressable market. However, I want to speak to you first about why Variable Assist has been so important and why we decided to dedicate resources to expanding its functionality. If a patient has no motor capability, meaning they have no ability to move their legs on their own, the Ekso’s job is basic.…

Thanks Nate for the introduction and kind words. I remind you that we have gotten thus far with great team work. And it’s a team work here at Ekso Bionics that is turning what was once science fiction into reality. I’d like to cover two areas in the call today: First, the progress we continue to make in Ekso Labs and what it means for Ekso Bionics as a whole; and second, provide some color on our commercialization efforts with our industrial exoskeleton and why we are increasingly excited about the prospects for solving fatigue and endurance situations with construction workers. Regarding Ekso Labs, we are working on some fantastic research and development projects. Our contract backlog now is such that we believe we may achieve over $4 million in revenue for 2015. These projects are not tackling some tough problems for our customers but they are also advancing exoskeleton technology and creating valuable intellectual property. On the IP front, we are now up to over 140 patent applications worldwide, with over 50 of those having been granted. This is one of the primary goals of Ekso Labs, create cutting edge technologies, patent the ideas and leverage them across all Ekso Bionics platforms [indiscernible]. Regarding our efforts to commercialize our industrial exoskeletons, I’m happy to report that those efforts are gaining traction with major customers in the U.S. and in Europe. We are in the final prototyping and field testing phase at this time as per our plans. We are not ready to take advanced orders yet but anticipate being prepared for this later in the year. Tom Mastaler and our industrial team continue to meet their technical and commercial milestones we set out earlier this year. As most of you hopefully know, Tom joined us in February. He previously…

Thank you, Russ, exciting potential. Now to some financial highlights. I will focus on the first-half year results on this call and any comparison will be to the same period of 2014. Please see our quarterly report filed with the SEC for quarterly results and comparisons. For the first six months of 2015, revenues were $3.8 million, as compared to $2.3 million for the first-half of 2014. From our revenue standpoint, this is the best six-month period in the company’s history. Revenue for our medical device segment represented $2 million, up from $1.2 million last year. Revenue for our engineering services grew to $1.8 million, up from $1 million. As a reminder, please note we amortize revenue typically over 36 months for units sold that is we are paid upfront for Ekso Bionics medical devices with revenue then recognized over three years. Of the 33 units shipped in this half year, 30 were net new sales and three were new rentals. Average selling prices per unit sold help firm in the last quarter, in fact increased slightly for units sold direct to customers. Average selling prices for our Ekso care package also remained consistent. Our U.S. sales team is now trained on the rental initiative we launched in May. The premise of the program is to facilitate uptake by providing customers with a different payment option and possibly shortening our sales cycles. As an example, this past quarter, we had two rental units that were converted to a purchase. While this is just one tool in our sale and marketing efforts, we now will be expanding this program to select countries in Europe as well. Our gross profit for the first-half of 2015 was $905,000, as compared to $525,000 for the same period last year. While this represents an increase…

Thanks Max, Thanks Russ. Before we turn over this call to some Q&A. I wanted to mention one more thing. Since going public over 18 months ago, we’ve worked really hard to develop trust with the investor community, both with our retail investors and institutional investors. We’ve worked hard over the last year to clean up our balance sheet, to reduce our warrant overhang and to establish an early footing with institutional investors by gaining the trust of three independent research analysts. The confidence of our customers continues to grow, as measured by steps in our device and by the growing number of multi-unit customers. Of course, we have also continued to execute, meeting important internal milestones we’ve set for ourselves in our medical and able-bodied efforts. And with that, I will end our prepared remarks. Rob, can you please open the call for questions.

Thank you. At this time we will conduct the question-and-answer session. [Operator Instructions] Jeffery Cohen with Ladenburg Thalmann. Please proceed with your question.

So Nate, can you review what you were talking about as far as the data and statistics on the VAs? You were talking about the share, I understood. Could you review the penetration rate, when you spoke about being in 11 VS centers and that represents 17% penetration; how are you measuring that?

We have 11 units in the VA centers but the 17% penetration is I guess based on facilities, so that 17% of the total facilities that we’re in.

Okay.

And some have multiple units.

Certainly not 17% of the spinal cord and stroke injury patients have been penetrated at this point.

No. And that’s a really important point because this we’re counting -- we’re saying that a place is penetrated right now, if they have one exoskeleton in that center. And that’s really -- that’s an understatement because they might need four or five to really treat the patients they have in the future.

The Ekso Clinical Science Organization meeting that you held in June, is that specific for your devices or is it intended as being an organization for all exo devices available in the marketplace?

Well, we intended to have it branch out but the community that we invited really wanted to talk about Ekso. So, it really did end up being largely an Ekso conversation rather than an exoskeleton conversation.

Okay, got it. And Russ, could you talk a little bit about some of the additional work in the industrial space as far as the weigh and the field testing, the type of equipment you identified, seven targeted applications; could you talk a little about that?

Absolutely. So, the applications we’re targeting are basically grinding, cutting and drilling applications for both concrete and steel and then also welding applications for steel. So, it’s slightly different if you’re in a concrete environment versus the steel environment from the tools you use differently. But the application is very similar and the Ekso that does that can service all seven of those applications is very similar. So that’s really been our focus this round, what we call a round one in products is building on the base of our path of Ekso and trying to keep the devices simple as we can while tackling these real problems.

And what were the two -- you mentioned two prototypes.

So, we’re on our second phase. So, you remember we demonstrated an alpha prototype unit last December and then we went out and started field testing that. Based on the early feedback we got from the field and getting it in the customer’s hands, we’ve now built up 15 of our beta prototypes which those are now on our expense of two to four months field testing periods. So, we’re right in the middle of that now with current customers.

Can you tell us what the difference is between the alpha and the beta prototypes; is one powered or partially powered?

No, same, it’s passive as well. The real difference is, we have taken a lot of lessons learned from our earlier IP and earlier exoskeleton input that in the industrial. And once we got on the job side, and you see some of the environments that these have to work in, we spend a lot of engineering effort in making the devices more rugged, easier to adjust, easier to get it narrowed [ph] and really pairing to the users and how they are going to use these going forward.

And there is 15 alpha are being used now?

Yes.

Next question is from Amit Dayal from H.C. Wainwright Group. Please proceed with your question.

Max, I guess the first question is to you around margins. Within two consecutive quarters, I know you’ve been talking about making these improvements to the units, just one clarification on this aspect. Are these enhancements et cetera being done to the new units being shipped or are we also undertaking these enhancements on units that are already in the field?

So, in terms of the margins, we’re focused, we report on two businesses. So, we have the labs, the engineering services business and that’s always for us 30% to 35% margin and we’re doing just that for that business. On the medical device business, I think you know our long-term goal is to be in the 50 plus percent gross margin area. Our medium goal is to be 35%. If you look at our balance sheet and compare the deferred revenue and cost of goods for the devices that we’re amortizing, you’ll see that the gross margin for those items is in the 48% to 50% range. So, we’re on track there. So, the challenge for us is in the services business. And we are -- like you said, we are retrofitting units that are in the field. So, these are -- the new units that we’ve been shipping this last quarter and going forward, they tend to have most of the technological advancements or enhancements that we put into device. So no, we’re not retrofitting them. The once that we’re concentrating are the once that have been in the field now for two years or a year. And that’s a program we have in place.

And I can follow-up with you in a more detail later on as all on that. In relation to the SmartAssist offering that you’ve now started to potentially market in Europe, how much of pricing upside can we expect from that if any in the near-term?

Well, it will offer us an opportunity to charge for additional training on units. So that’s going to be a little revenue upside. And then also the FES hook up, Functional Electrical Stimulation that is going to be an up-sell product. So that will give us some additional revenue as well. The SmartAssist software itself will be the new standard that we’ll ship for the price of what we used to call the Variable Assist package, now it will be the SmartAssist package.

And these will potentially start reflecting in orders that we see in the third and fourth quarter 2015 already?

Yes. So, it will start shipping in Europe soon. We said publicly in the fourth quarter it will start shipping. It is possible that I can ship earlier than that. But because it’s a software upgrades, largely we can do this -- basically we can do it after the fact when we deliver the new training that they paid for, if that make sense.

I get it. In relation to the progress on the industrial side, this is coming a little faster than I expected which is a good thing. Initial order sizes are if there is going to be more pilot deployments, one or two units. Can you give us a sense of like what kind of potential order you might receive for this line of offering?

I think that it’s -- I’m going to say it’s too complicated for me to answer that right now. As you know, we’re working with various potential partners to try to get partnership in this area. At the same time, we’re looking for orders. So, we’re definitely talking about more than pilot type orders. I don’t know that we would even announce that if that’s what we got but we’re -- but I think giving you any more color on that is just probably impossible for me right now.

And I guess finally just touching on the sales terms you’ve been seeing, were these 17 units for the quarter into new customers or they sell into existing customers and what’s the pipeline looking for the medical systems opportunity over the near-term?

They went to both existing and new customers. We saw a little bit of improvement on the U.S. side as people have gotten more used to our FDA status and what that really means but it’s still -- that’s still an issue in the U.S. We’re on our budget and cautiously optimistic right now.

And just, are we still on connect for a December FDA clearance potentially?

We think so. We’ve not revised what we’re telling people on that.

Our next question comes from [Indiscernible]. Please proceed with your question.

Thank you. I have several questions. First is you guys placed 16 units, we worked place 12, so clearly you did better in the despite what I think is pretty aggressive position on their part to fairly on the FDA approved products and what -- Nate, what you said structural limitations on your ability to market and aggressively as you would like. So, clearly you’re being more successful than they are despite this. Can you just talk about what’s you are seeing in the field and what customers are responding to with your Ekso?

Yes. So, the first thing I’d say is that we shipped 17 to paying customers, just wanted to correct that number. But we -- I think what you are seeing out is just validation of the strategy that we took to focus on rehab, make the product right for the rehab center right off because they are the people who can afford to pay. And it’s the environment where these things makes good tools right now and that’s just really paying off. I mean we really have the only machine in the market that can move from patient-to-patient-to-patient quickly; they can readjust the thing completely and under five minutes. And that’s why our utilization rates are going up and that’s why this is working out. And you see that we’ve been concentrating on things like more Variable Assist for more functionality for stroke patients for example, all of this is about the rehab center. And I think that that’s what we’re seeing is that that’s paying off because people in rehab are realizing, this is the exoskeleton that was really designed for us.

And just then on utilization, so you went from 21 million steps at the end of Q1 to 26.5 million this quarter, 5.5 million steps just in one quarter that’s 20% of all the steps taken today. So, here again, what are you seeing at the customer level, what kind of feedback are you getting on that? I think you’ve spoken to a little bit, I don’t know if there is more to say than what you’ve already just said. But if there is anything else I’d love hear it. And then also any metrics you can share like steps per unit, per month kind of feels to me like to me we’re on steep part of the curve now. Any metrics you can share that gives us sense of the shape of that curve?

So, I think that we’re seeing a lot more utilization, what we’re hearing is from the centers as they are finding more and more patients are applicable. It’s interesting because when we initially go into a center with a lot of stroke patients for example, we show them videos of use with very early stroke patients. But as you can imagine, a doctor is pretty hesitant at first to go right to those patients. But as they get more comfortable with the machine, they can move further and further closer and closer to the stroke with when they start using the machine. And so it’s really kind of almost like expanding addressable market. But it’s been also I would say, we’re seeing multiple unit customers now, people who are buying additional systems because they feel their first system that’s great. Regarding your mention of metrics, I think what we should do is tell you, will try to get you more metrics next time. I think we’re not -- I would hate to do anything off the top and give you a wrong number right now. And we haven’t really prepared anything on the other metrics that come out of that data base.

Okay, thank you. I think that would be helpful because like I said, it feels like things are kind of taking up in regards and it would be helpful for all of us to see that if you can produce it in any way. I just have two questions on industrial; I think these are for Russ. Russ, you said in your remarks that companies are reaching out to you. I am sure you guys have an active outbound effort, but can you elaborate on that? Are you getting inbound interest, maybe as a result of some of the press that you’re getting? And if so, what does that inbound interest look like?

You’re absolutely right. I mean every time there is another piece out on the industrial exoskeleton. We get multiple inquiries, both from large companies and we’re getting a lot of inquiries from medium to smaller companies as well, which right now we’re focusing mainly on the larger companies and the partners we’re currently working with. But we’re prioritizing the medium and small companies, looking forward to how we can address their issues and their desires as we get more bandwidth later in the year.

And the final question which is something also you said, I don’t know if you’ve just spoken to it. But you said the opportunity is larger than you originally imagined. Can you maybe talk about what you thought it would be? I’m not looking for numbers or anything but just qualitatively what you thought the opportunity was like before you embarked on this effort? And then what you’ve heard and seen since then that now leads you to believe it’s bigger than you thought?

I think that one is really easier, just us being out on the job side and raising the awareness of what this technology is and out of the gate, we’re targeting heavy tools and heavy applications. And what’s happening is as we’re out on these job sites and people are seeing what we are doing with the heavy tools, so yes, but I have a smaller lighter tool, but I do it for so long that I really could use some assistance there. So, we’re branching out into lighter tools faster than we have thought and there by more applications.

And one final question if I may and then I am done. I think there is a big fear among investors in the marketplace that the competitor is a huge competitive threat and they are going to be these well financed kind of big conglomerates that are flooding the marketplace with cheap exos. Could you speak to what you’re seeing on the competitive front, if anything? And what competitive -- I think we’re -- reasonably some of what’s going on, on the medical front but just in the industrial front what you’re seeing from a competitive point of view? Are these trials competitive, or do you see like that’s the only one there in some cases?

I think our approach is different than most others in the exoskeletons phase. I mean if you look at a lot of the other exoskeletons out there on the Internet, a lot of them tend to be powered and trying to do heavy test, more along the lines of Aliens and Sigourney Weaver, and we’re start -- are trying to be very conservative and start with a very simple exoskeleton based on solid fundamental IP that is solving your problems and we’ll branch out and stand a powered exoskeleton and as we learn and get smarter. But I think our strategy in starting simple, starting with these global companies and moving fast is really what’s going to keep us going in front of everybody else.

Our next question is from Greg Chodaczek with CRT Capital Group. Please proceed with your question.

This is Cait Howard [ph] on for Greg actually. So Max, I had a question on a rental program that I may have missed. I caught that there were two rentals converted to purchases over the quarter, but did you break out how many of the net 17 new units were rentals this quarter? And maybe quickly just sort of view how those conversations with hospital administrators have been going since that long-term rental program started?

So, in the second quarter one of the units was part of a rental program. We talk about a net 17 shipments. And just to be clear, we had 18 units that we sold, but two of them had been rented starting already last year by customer and they converted those two rentals to a sale and we do not count those as new shipments because we talk about next shipment. So, we actually sold 18, two of which were with the previous customers that converted and then we rented one new net unit this past quarter.

And just is there -- do you have any like update on how conversations with the hospital administrators are going with this long-term rental program or is it kind of too early to really say if anything is coming out of that?

Yes, I spent some time with the sales folks out in the field. And I have to say that it’s early really to measure progress because of the length of the sales cycle. However, I can say that they are really excited about it and they really think it’s expanded the number of customers that they can get into the serious phase of looking at the purchase. And it’s the tool that’s in their bag to try to get a sales on. And they seem very confident that it’s going to make a big difference, but it’s going to take a little while longer for us to really report to you how that worked out.

Well, thanks so much for the added info there. I think all of my questions were already asked here. So congratulations in the quarter guys.

There are no further questions. At this time, I’d like to turn the call back over to Nathan Harding for closing comments.

Thanks operator. And thanks to all of you for participating today. I’m really proud to lead Ekso Bionics and I’m proud of what we’re accomplishing with this broad-based technology. It boils down to being able to help people where they need it most. We want to help those with spinal cord injuries, get up a walk again. Everybody knows it’s not healthy to sit all the time. We want to help those who suffer a stroke or diagnosed with MS or simply lose the ability to walk. We all know that sooner and more often you get up and walking, the better chances you have to recover or maintain existing gate and enjoy better quality of life. We want to help a 45 year old construction worker be able to remain at his or her job injury free, helping him or her accomplish better quality of work and helping his or her company improve productivity. We want to help protect our soldiers. They are being asked to lay their lives on the line to protect us. And our technology is helping them carry out their job in a safer way. We are at the beginning of this effort to innovate and bring technology to good use. We’ve made tremendous progress but the best and biggest gains in our ability to help people and advance to technology are yet to come. Thank you for your continued support. And I wish you all a good rest of your day.

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