Good afternoon and welcome to the InspireMD Fourth Quarter and Year End 2014 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Vivian Cervantes of PCG Advisory. Please go ahead.

Thank you, Laura. I would like to make the following remarks concerning forward-looking statements. All statements on this conference call, other than historical facts, are forward-looking statements. The words anticipate, believe, estimate, expect, intend, guidance, confidence, target, project, and other similar expressions typically are used to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and may involve and are subject to risks and uncertainties, and other factors that may affect InspireMD’s business, financial conditions, and other operating results, which include, but are not limited to, risk factors and other qualifications contained in InspireMD’s annual report on Form 10-K, quarterly reports on Form 10-Q, reports filed on Form 8-K, and other reports filed by InspireMD with the SEC, to which your attention is directed. Therefore, actual outcomes and results may differ materially from what is expressed or implied by these forward-looking statements. InspireMD expressly disclaims any intent or obligation to update these forward-looking statements. I will now turn the call over to Alan Milinazzo, CEO of InspireMD.

Thank you, Vivian. Good afternoon everyone and thank you for joining our conference call for the three-month period ended December 31, 2014. During the call, we will review Q4 2014 and then shift gears to lay out our 2015 agenda, which we are excited about and focused on executing. After several months of challenges we have a plan in place and the resources to execute on that plan. During the fourth quarter, we began the process of taking steps to recover from the business interruption following our voluntary field action. And subsequent to the quarter's close we announced several important achievements signaling process and key areas of the business including commercial, clinical, and product development. We also recently strengthened our balance sheet, which despite the difficult and painful fundraising was an important part of our plan to return the company to a stronger operating position. I'd like to discuss our recent financing activities before turning the call over to Craig Shore, our CFO. In the fourth quarter we began fundraising activities, which resulted in $8.1 million gross proceeds on November 07, 2014 and on March 09, we announced a subsequent public offering that raised gross proceeds of $13.7 million with insiders taking roughly 10% of the recent offering. It was not an easy financing process mainly, because the company's strategy was in transition. The legacy strategy was built on an assumption that a mesh covered bare metal coronary stent would be widely commercially viable. In addition to business interruptions due to our manufacturing change, as 2014 unfolded the industry also experienced a more pronounced and steady shift to drug-eluding stent use in STEMI patients, which required us to adjust our business strategy. Further, heading into our financing activities, our share price was already under pressure given perceived liquidity concerns. While we found our financing activity extremely difficult and painful it was an important part of our strategy to gain flexibility and return to stronger footing. It was step one of a four-part plan to move the company forward. I'll review this in greater detail after Craig walks you through our fourth quarter results. Let me turn the call over to Craig.

Thank you, Alan and thank you all for joining us. Similar to the previously reported Q2 and Q3 results, the fourth quarter continued to be negatively impacted by the voluntary field action, which is evident in a number of financial metrics that I will review with you over the next several minutes. Let me begin with revenue for the fourth quarter ended December 31, 2014. Revenues were approximately $970,000, compared to $1.6 million during the same period in 2013. The decline in revenue was directly associated with the temporary stoppage of the sales activities for the MGuard EPS, which is our primary commercial product following the voluntary field action implemented on April 30, 2014. Given the unusual commercial dynamics in 2014 the more appropriate comparison is versus prior year will be sequential quarterly growth. Fourth quarter revenue improved over 200% from Q3 to Q4. This is a good indication of positive commercial momentum, although as we enter 2015 we have negative currency headwinds, which impact a number of our key commercial markets. Gross profit for the quarter was $400,000 a decrease of 54.2%, compared to $861,000 for the same period in 2013. This decrease in gross profit was largely attributable to the impact of the voluntary field action on product revenues. Total operating expenses for the quarter were $4.8 million, a decrease of 17%, compared to $5.8 million for the same period in 2013. This decrease was primarily due to a reduction of clinical and development expenses related to our bare metal stent product, a reduction in sales and marketing and general administrative expenses. The loss from operations for the quarter ended December 31, 2014 was $4.4 million a decrease of 10%, compared to a loss of $4.9 million for the same period in 2013. As just explained, this decrease…

Thank you, Craig. With 2014 behind us, let me now shift gears and focus on our planned activities for 2015. As I mentioned earlier, we have a four-part plan to restore momentum to the business. Part one was this efficient fundraising to execute on our plans. Part two is to continue to align our expenses to extend our runway. Part three is to selectively develop our pipeline and part four is to reaccelerate revenue with the focus on our emerging carotid product opportunity. We have already highlighted the first part of our strategy, which was the fundraising. Let me spend a few minutes on the second part of our strategy, which was and is to align our cost structure to support our new strategy. We started this process in late 2014 and in early 2015 we took further steps to align the resources of the organization around our strategy to exploit the immediate carotid opportunity in the emerging neurovascular opportunity. This resulted in reducing headcount and suspending further investments in coronary until we have secured a strategic sponsor for the program. Our confidence on our DES program was bolstered by positive preclinical PK data we receive in the fourth quarter setting the stage for future collaborations. Based on work we have done to-date, we expect to be in a position to execute an agreement in late Q2 or early Q3 of 2015. Obviously, this timeframe is predicated on a successfully negotiated and mutually beneficial business relationship. Our final point on aligning our expenses is that we continue to explore opportunities to reduce our expenses and extend our cash, which is greatly facilitated by our streamlined strategy. The third part of our strategy is that we reset our development activities to cost-effectively pursue impactful indications for our MicroNet technology. Informed by…

[Operator Instructions] And our first question will come from Josh Jennings of Cowen & Company.

Hi guys, this is actually Neil calling in for Josh. Thanks for taking the questions. So to start, if you can kind of follow-up on you talked about the six-month follow-up data for CARENET and I guess you are seeing, and you've seen 100 successful cases with growing demand. If you could just talk a little bit more about any specific feedback you've gotten through clinicians and is that body of evidence enough to drive market share capture?

We think it is Neil, we think it is. Our data, compared quite favorably from a number of patients to other products that are out there with very good market share, so 30 patient first in mandate is very common for the carotids. Our six-month data I think was reassuring that we had widely patent vessels. So the initial positive success, which we reported with the CARENET trial zero Mace, very, very good diffusion weighted MRI results as our principal investigator calls it, the unforgiving metric, we had very good results. So I think in combination the acute results, the six-month data as confirmatory gives us sufficient ammunition to go out and test the market. Those 100 cases are obviously, they include some CARENET cases, but we've done a number of post CARENET cases expanding out to those 20 physicians, and so far so good. In terms of the initial reaction, again the acute procedure success has been very high and to our knowledge we still have very, very good success from the initial enrollment. So we do think it's enough and we're excited by the overall reaction we've had so far.

And just one follow-up here, just as you think longer term, how do you think about the path to U.S. approval for CGuard and can you talk about potential partnership opportunities?

Yes, we've got a straw man of a strategy, a clinical strategy. We need to wet that, so we'll be looking for an FDA meeting in the next couple of months to wet that. Our desire would be to submit something this year to the FDA, but we've got more work to do. That trial will likely have a sponsor participant with us. We think that the carotid market in the U.S. is attractive, but could be wildly attractive if you could actually start to get the reimbursement to align, and so that may take someone with more horsepower than we have. But in the short-term we have significant immediate opportunities in the European markets. Again, we're selecting the European markets with favorable pricing, favorable reimbursement environment and then that will inform us as we go through the year. So stay tuned for more information on that as we go through the year.

Great. And then just on the DES side, so I guess do you have any update on the status of kind of the platform development for DES MicroNet? And then, also, if you could just maybe just to remind us on the timelines and any update there for potential partnerships?

Yes, no problem. What we did mention on the call today, which we hadn’t previously is that we have concluded our initial preclinical studies and done so favorably, these are the PK studies and what we were looking for there was, are we getting the drug transfer that we were expecting to see post, with you've to the combined device or again the drug transfer rates and we were quite pleased with the preliminary results, which really allows us to sort of put pencils down on that program and now get into negotiations with the sponsors that that we've identified as being potential near-term opportunities, good long-term partners, but also within the near-term relative to an agreement. I mentioned the end of Q2 early Q3 should be our timing and that of course assumes that we can get to a mutually agreeable business relationship. But we feel very good, we've got enough evidence to get us to the point where we can negotiate and I hope we'll be talking about this at the end of Q2 or early Q3 at the latest.

Right, great. Sorry if I missed a little bit of that, I had kind of a little trouble connecting, but I'll just jump back in the queue.

Yes, no problem, Neil thanks.

And the next question will come from Steven Lichtman of Oppenheimer.

Thank you. Hi guys. I guess just, first question in terms of the potential partnership late 2Q or early 3Q would that be sort of in that private-label process you've talked about or would be with your license, what do you anticipate around potentially around that timeframe?

We have two discussions going on Steve, and so it could be one or the other. So, I'm not sure, which one we will get to first, but it could be one or the other. So it would be one or the other.

Okay, and do you, and are you anticipating the potential for some sort of cash component to that upfront or how should we be thinking about that?

That's our objective, is to get some capital in the company from that agreement. That's a critical part for us going forward is to validate the opportunity through some upfront investment, but we also would look at that as some upfront capital. We'd look at that as milestone capital and ongoing whether it's revenue-sharing in a private-label type arrangement or license fees from a license agreement.

Okay, so could take different, it could be in a different form than just an upfront?

Could be, again for us we'd like to, we can probably sacrifice a little bit on the backend in order to get capital in the door just, because we want to start to rebuild our capital position here. This fundraising was difficult, but necessary and I think to the extent that we can do that, of course we're not going to do something long-term that would harm our ability to benefit from the bigger sort of pat over time, but if we could get a balanced agreement that's what we desire.

Okay and so on a pro forma basis, I guess you had around $20 million exiting 2014 pro forma for the raise, where do you anticipate the burn to be in 2015?

Hi Steve, it's Craig. So if you remember the latter half of 2014 our burn rate was artificially high approximately $2 million a month and that was driven due primarily through the lack of sales associated with the VFA. We since taking cost-saving initiatives we also stopped as you know the FDA trial, which was a significant drain on our burn and our cash usage. So assuming we hit all of our objectives for this year, we anticipate our burn rate being reduced about 50% so roughly $1 million per month on average for 2015.

Okay and that, I just wanted to get a sense on the top and, that’s predicated on what should we be thinking about approximate euro assumptions for total revenues in 2015?

Well, as Alan said, we should end the year at historically high numbers exiting 2015. So I think you should sort of ramp your way up to that level.

I think, I'm sorry go ahead.

Yes, no sorry Steven I just want to jump in, so I mean, last quarter obviously wasn’t start to return to normal. Our normal run rate if you look pre VFA we were at $1.5 million a quarter. We're not fully back in all the markets and we're not fully launching the CGuard primarily due to inventory and resources, but that will improve over the course of the year. So we’d love to give you more formal guidance than that, but our view is that if you take the 800 or so 1870 we did in Q4 typically Q1 is a little bit soft for us if you look at our ordering cycles, we tend to sort of follow some seasonality, but as revenue start to come in with increase as we get back into all the markets for coronary and as we start to roll out the product, we’d expect to see a revenue ramp. Could we be a little bit lumpy with regard to the coronary just do the distributor ordering patterns that could certainly happen, but as Craig said, I think if your sort of trend out towards the end of the year when we’re really, we should be at full steam on coronary by Q3 and we should be, I wouldn’t say unconstrained, but we’ll be close to unconstrained for Q3 end of Q3 certainly going into the Q4 on the carotid side.

So it sounds as though maybe in fourth quarter something in the 1.5 million to 2 million is sort of where something, because you have mentioned 1.6 where we’re about somewhere maybe slightly north of that’s where you would think today exiting 2015, is that sound fair?

That’s fair.

And given that revenue rate, just where else do you see some opportunities on the expense side versus the fourth quarter obviously R&D came down meaningfully. Should we be thinking that SG&A is also going to come down from the level was in fourth quarter to get you down to that 1 million a month on the burn?

Yes.

Got it. that’s all I got. Thanks guys.

Thank you, Steve.

[Operator Instructions] And showing no further questions, I would like to turn the conference back over to management for any closing remarks.

Well, I want to thank everyone for dialing in today. Again we are looking forward to turning the page very optimistic about 2015. We have a very specific set of plans and activities that we’ve already started executing on and we look forward to continuing to update you throughout the year. Have a good afternoon.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.