Greetings. And welcome to the InspireMD Second Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen only mode. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Natalya Rudman, Investor Relations for InspireMD. Thank you, Ms. Rudman. You may begin.

Thank you, Damon. Good morning, everyone and thank you for joining us InspireMD second quarter 2018 business update conference call. On the call with us today is Jim Barry, Chief Executive Officer of InspireMD and Craig Shore, Chief Financial Officer with InspireMD. At the conclusion of today's prepared remarks, we will open the call for your questions. If anyone has any questions after the call, please contact Crescendo Communications at 212-671-1021. Before we begin, let me take a minute to note that this conference call may contain forward-looking statements. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. Such information is subject to known and unknown risks, uncertainties and other factors that can influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward-looking information. Listeners are cautioned not to place undue reliance on forward-looking information as no assurance can be given after the future results, levels of activity or achievements. With that out of the way, let me now turn the call over to Jim Barry, CEO. Please go ahead, Jim.

Thanks, Natalya, and thanks everybody for joining us this morning. Once again, we achieved another strong quarter with sales at CGuard EPS increasing 94% percent over the same period last year and for the second straight quarter we reported sales in excess of $1 million. Following on the strong uptake among key opinion leaders, we have begun to shift to the next phase of our sales and marketing strategy, not only focusing on the current base of physicians who perform carotid artery stenting but now going after the physician base who performs the largest carotid artery procedures with open surgery, the vascular surgeons. This requires a different approach and different [downstream] [ph] tactics to penetrate the largest segment of the market. Vascular surgeons have been slow to adopt carotid artery stenting due to stroke risks associated with conventional carotid stents. The response so far from surgeons has been positive. We believe that as we continue to promote the safety benefits to the broader vascular surgery community they will choose CGuard over the more invasive surgical procedure for their patients. Historically, we have reported an addressable market based on the smaller carotid artery stenting segment, which is typically performed by Interventionalists. However, expanding into the vascular surgery market would result in a significant increase in the addressable market for CGuard. This is primarily because the bulk of carotid procedures are being performed by the vascular surgeons. This market is valued at over $1 billion today. In addition there are approximately 2.2 million people diagnosed with high grade carotid stenosis each year, which is a big risk factor for stroke. But only 600,000 or 30% received surgical or stent treatment. This is due in large part to the risks associated with the traditional surgical and stenting procedures. As a result, we see…

Thanks, Jim. Revenue for the second quarter ended June 30, 2018 was $1 million compared to $640,000 for the same period in 2017. This was primarily due to an increase in sales of CGuard EPS, as a result of our continued focus on expanding existing markets such as Germany, Italy and Russia and our transition from our prior exclusive distribution partner for most of Europe to local distributors, as well as expanding into new geographies such as India. The company's gross profit for the second quarter ended June 30, 2018 was $277,000 compared to $147,000 for the same period in 2017. The increase in gross profit was largely attributable to the increase in revenue I mentioned previously. The gross margin increased to 27.6% in the three months ended June 30, 2018 from 23% in the same period in 2017, driven mainly by higher volume and more efficient utilization of our fixed manufacturing resources. It's also important to note that year-to-date our gross margin has increased to 28.3% from 18.3% in the prior year for similar reasons. Total operating expenses for the quarter were $1.8 million, a decrease of 28% compared to $2.4 million for the same period in 2017. This decrease was primarily due to a reduction in compensation expenses resulting from a salary related accrual in 2017 and a decrease in share based compensation expenses. Financial income for the quarter ended June 30, 2018 were $846,000 compared to zero for the same period in 2017, largely due to a non-cash income associated with our preferred stock. Net loss for the quarter ended June 30, 2018 totaled $627,000 or $0.15 per basic and diluted share compared to a net loss of $2.3 million or $7.30 per basic and diluted share in the same period in 2017. As of June 30, 2018, cash and cash equivalents were $6.4 million compared to $3.7 million as of December 31, 2017. This does not include $6.4 million in net proceeds from capital raised in Q2, 2018, but received in early July 2018. We currently have approximately 23.8 million shares outstanding. There's an additional 3.3 million shares underlying the preferred B all held by a company affiliate and 1.3 million underlying the preferred C. As a result of our most recent offering, we also have approximately 16.2 million shares underlying the pre-funded warrants. The reason for these pre-funded warrants was to ensure the shareholders didn't go over certain equity percentages. But importantly there is no price protection for any of these warrants. At this point, we'd like to open up the call for questions.

Thank you. [Operator Instructions] Our first question comes from line of [Nick Severs with Forest Capital] [ph]. Please proceed with your question.

Congrats on another quarter, a very strong year-over-year growth guys. My question is you spoke about broadening the marketing focus beyond the KOLs with a particular focus on the vascular surgeons. Just wondering how long you think it will take to implement this strategy and what we can expect from a sales growth perspective?

Yeah. Totally fair question, hard to say exactly. But as I had mentioned we've had you know, very, very positive response from the surgeons that we've been working with up to this point and it's really that response that has given us sort of the confidence to shift to this type of strategy, to spend a little bit more time with the vascular surgeons and we might ordinarily have had to. But look I mean, you know trying to convert somebody that's been doing something for years and years is going to take a concerted effort and we're certainly willing to do that. I think the good thing that's you know on our side is our data and we know and we've learned as we've interacted with these vascular surgeons that they are quite data driven. And so we think given our data that – it should make our efforts that much easier.

Thanks and great job.

Thank you. Our next question is from the line of [Walter Schachner with Match Partners] [ph]. Please proceed with your question.

I apologize, I haven't been involved with the company for some time, but it's sort of a big picture question. At 30% gross margin, what is that gross margin target to get to breakeven, because at 30% gross margin you’d need something approaching $10 million in revenue it appears to breakeven or am I doing the math wrong?

Right. So this is Craig Shore, the CFO.

Hi, Craig.

So as far as breakeven is concerned, if we wanted to breakeven we can do it much quicker than we're anticipating. But as you know, we're an R&D based company as well and we just raised significant capital that we plan to invest in our pipeline and also gaining approval in the United States for our product. So we aren't giving any guidance, but we are planning you know, in addition to investing heavily in our commercial growth to also developing in projects that we think will give us a nice payoff in the future.

But let me just quickly add onto that though, I think the other thing we didn't talk about but we are also spending a fair amount of time looking at our cost of goods as well. And we've made some pretty good improvements as Craig said, it's - you know we'd like to get it a little better and we have some efforts underway to make that happen as well.

Okay. Thank you.

Thank you. [Operator Instructions] There appear to be no further questions at this time. I'd like to turn the floor back over to Mr. Barry for closing comments.

Thanks, Damon. So in closing, I'd just like to reiterate that we've achieved another quarter of very strong growth. The sales of CGuard EPS increasing 94%. Our strategy is working and following our recent capital raise we are now shifting our strategy to include a greater focus on vascular surgeons which will help expand the addressable market. We are expanding beyond the KOLs to target the broader physician base that treat carotid artery disease and this targeting the approximately 2.2 million patients diagnosed with high grade stenosis per year, who could be helped by our device. We truly believe the steps we have taken and continue to take will build value for shareholders in the coming months and the years ahead. Once again, thank you for your time today and I hope you all have a good day.

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