Ladies and gentlemen, good day, and welcome to the InspireMD Second Quarter 2020 Financial Results and Corporate Update Conference Call. At this time, all participants are in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Participants of this call are advised that the audio of this conference call is being broadcast live over the internet and is also being recorded for playback purposes. A webcast replay of the call will be available approximately one hour after the end of the call through November 4, 2020. I would now like to turn the call over to Scott Gordon, President of CORE IR, the company's Investor Relations firm. Please go ahead, sir.

Thank you, Stanford. Good morning, everyone, and thank you for joining us for the InspireMD second quarter 2020 financial results and corporate update conference call. Joining us today from InspireMD are Marvin Slosman, Chief Executive Officer of InspireMD; and Craig Shore, Chief Financial Officer. During this call, management will be making forward-looking statements, including statements that address InspireMD’s expectations for future performance or operational results, particularly in light of the COVID-19 pandemic. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in InspireMD’s most recently filed periodic reports on Form 10-K and Form 10-Q, the Form 8-K filed with the SEC today and InspireMD’s press release that accompanies this call, particularly the cautionary statements in it. The content of this call contains time sensitive information that is accurate only as of today, August 5, 2020. Except as required by law, InspireMD disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. It is now my pleasure to turn the call over to Marvin Slosman, Chief Executive Officer. Marvin?

Thank you, Scott, and thank you all for joining the call and webcast today. As I reflect back on our first quarter earnings call, I talked about uncertainty in the world amid the COVID-19 pandemic and the global challenges it’s created. I'm happy to report that even as the pandemic persists, our team continues to respond and deliver with great poise and commitment to fulfilling our customers' needs. Despite the continued rise in COVID-19 cases, placing pressure on healthcare operations globally, specifically with regard to the volume of elective procedures, including carotid stent placement, we're still providing critical and life-saving products that are proven superior in safety and produce effective outcomes, although at a slower pace than pre-pandemic. However, these lower volumes are tempered by the gradual reopening of facilities and practices throughout Europe, as well as expanded territories, which I will discuss shortly. To be sure, our Q2 financial results were adversely impacted as a result of the healthcare system diverting attention and resources to fighting COVID-19. Government implemented restrictions on elective procedures, and people avoided seeking treatments even for emergency conditions. We are, however, seeing a resurgence of elective procedures in our key markets, and expect we'll continue to see gradual resumption as the impact of the pandemic is better managed and controlled. We've also taken proactive measures to implement policies and procedures that will ensure that we emerge from this crisis as strong as possible; including continuing to look at ways to operate more efficiently and lower our operating costs. We're encouraged by the fact that prior to COVID, our 2020 trajectory was very positive and shaping up to be a meaningful year, which we hope to reemerge after the recovery. I would like to now share three significant achievements for our company, milestones we've anticipated for some time and are proud to have achieved in Q2 as the levers of growth and further value creation. In June, we announced the completion of an equity financing raise of $11.5 million. The offering included $1.5 million from the Underwriter’s full exercise of its Over-Allotment Option for the offering. The additional cash on our balance sheet will go a long way to help ensure the health of our business and advancement of programs and commercial focus even during these challenging times. We perceive the success of this offering as a proxy for confirming our value proposition in the marketplace, even under extraordinary circumstances created by the pandemic, one that provides us with a crucial runway to continue accomplishing our extensive growth plans and important drivers and milestones. Despite the challenges imposed by the pandemic, we accomplished a critical milestone for our continued international expansion in the second quarter as well with the announcement of our approval by the Brazilian registration authority to distribute our CGuard MicroNet-covered stent. In Brazil, which is the largest healthcare-consuming market in South America, it is expected to reach $1.8 billion with a growing CAGR of 9% throughout the forecasted period of 2023. This is a critical development for us as it represents an opportunity to serve an emerging healthcare system. Brazil ranks as the sixth most populous country in the world. We have partnered with SUPRI, one of the largest medical supply distributors headquartered in São Paulo, to reach and serve this critical market with our advanced technology. This approval is an important milestone for us and supports our global and continued expansion in South America, particularly in adjacent markets, such as Argentina and Colombia. Also during the second quarter, we announced the results of the SIBERIA clinical trial, which evaluated CGuard versus Abbott Labs’ Acculink. The SIBERIA trial evaluated 100 patients who qualified for carotid revascularization with high-risk surgery and were randomized one-to-one with either CGuard or Acculink. The study evaluated 30-day silent brain infarcts associated with the use of Acculink conventional open-cell nitinol stent versus the CGuard MicroNet-covered stent. In this head-to-head evaluation, our product showed a threefold decrease in silent brain infarct versus Acculink, with zero post-procedural death, heart attack, or stroke at 30 days. The data from this important study serves to add to the growing body of clinical evidence that provides critical validation that we work to make CGuard EPS a standard of care in carotid artery disease. Additionally, we published the 12-month results from the PARADIGM trial in the EuroIntervention Journal. The paper details results of 101 unselected consecutive real-life patients treated with CGuard MicroNet for carotid stenosis and the 12-month prevention of post-procedural neurological events. Without going too deep into the data, 12 months after the carotid intervention, the CGuard EPS MicroNet-covered stent delivered sustained protection against post-procedural neurological events. At 30 days, only one adverse event occurred, a minor transient stroke with no other strokes, myocardial infarcts, or death. No strokes occurred between 30 days and 12 months. This study continues to follow patients up to five years from the initial implant and the results have been very promising. As perceived safety concerns are a major obstacle to more widespread stenting versus carotid endarterectomy surgery, this data is critical to our ongoing efforts to convert not only the conventional stent market but also vascular surgeons, who perform more than 80% of carotid artery revascularization procedures. Finally on June 25, 2020, the U.S. FDA granted conditional approval for our Investigational Device Exemption or IDE application to initiate a pivotal study of CGuard EPS. The conditional approval is contingent upon InspireMD addressing the stent-embolic protection device, EPD compatibility performance testing with the agency within 45 days of receipt of the approval letter. We've already completed this testing of additional stents according to the FDA specification and have employed alternative visualization modalities that we believe will ultimately allow us to gain full approval. Having an approved IDE is an extremely significant step toward enabling us to initiate a pivotal trial in the United States. We previously indicated that the FDA had concurred with our clinical study design and data requirements to support the market approval of the device. Accordingly, we believe that we are well positioned from a regulatory perspective in terms of our ability to initiate the trial. I would like to turn now to our second quarter and first half results. Recall that last year, we experienced an issue with our sterilization partner that essentially prohibited us from shipping product during the first quarter of last year. The impact was to shift $592,000 of sales from the first quarter into the second. That together with the impact of COVID-19 makes a year-over-year comparison more difficult than otherwise would be the case. With that said, for the three months ended June 30, 2020, we generated total revenue of $313,000 as compared to $1.354 million for the same period a year ago. For the six months ended June 30, 2020 we generated total revenue of $1.347 million as compared to $1.769 million for the same period in 2019. We did anticipate and realize softness in Q2 procedural volumes as hospitals and physicians pivoted to treat COVID-19 patients. As a reminder, carotid stenting procedures are elective in nature, at least in terms of timing, but I'm pleased to report that we're seeing signs of rebound in elective procedures in several of our key European territories, notably Italy, Spain, and Germany. Our initiatives to regain share in those markets are progressing. In addition to our U.S. IDE activities, we continue to execute on our planned expansion into growth markets in South America and the Asia-Pacific region. As I stated in last quarter, I also see numerous opportunities to expand our pipeline, leveraging new indications for the use of CGuard and MicroNet along with our research into a peri-procedural protection device, which is advancing in development. So notwithstanding the enormous challenge posed by the pandemic, I am as optimistic as ever that our technology represents a true advancement in the treatment of carotid artery disease and potentially other vascular conditions where innovation is still needed. I would like to credit the entire InspireMD team for quickly adapting to the new work culture and the new normal necessitated by the pandemic, driving us forward as a company to continue to progress toward our shared long-term goals. To prepare for the anticipated rebound, we worked during the second quarter to ensure that both our support organization and our ability to supply product remain firmly intact. These initiatives are already paying dividends as we see demand revert back to pre-pandemic levels. At the same time, we continue to take a close look at our operating expenses, and while I believe we're running a lean and efficient organization, we're always on the lookout for additional ways to extend our cash runway. As we've discussed before, the backbone of our go-to-market strategy is ongoing conversion of vascular surgeons who, as I've said, perform a vast number of carotid revascularization procedures, more than 80% through carotid endarterectomy. We view carotid artery disease as the next significant vascular condition to evolve toward an endovascular standard of care, much the same way that cerebral aneurysms, coronary artery disease, thoracic and abdominal aortic aneurysms, and peripheral artery disease have already done. This is why the vascular surgery community remains an important priority. Part of the strategy includes exploring additional peri-procedural protection devices to our portfolio. We look forward to advancing our efforts in this initiative and working with leading vascular surgeons on our strategic pathway. With CGuard EPS, we have what we believe is a superior technology platform in a market segment that is poised for rapid expansion in the coming years. Turning now to new market developments, as we indicated last quarter, COVID-19 has extended certain timelines associated with product registration and distribution contracts with channel partners that we've been pursuing in other countries in Europe, Asia, and Latin America. Besides these challenges, we've been continuing our internal work to achieve these approvals and key milestones for growth. In addition to expanding our reach in Brazil, the French market remains a pillar of growth in our European strategy. We're pleased to report that despite being particularly hard hit by the pandemic, that's delaying our discussions with the French health authorities, we're now advancing the approval for CGuard EPS under the standard reimbursement option with additional consideration for special reimbursement. This bifurcated strategy allows us to access the French market faster and, in addition, sets in place a pillar of our direct sales model. In terms of Asia Pacific, both China and Japan represent more than double our current addressable market and as such, these markets are another high priority for our business; thus we continue discussions with potential distributor partners in both regions to expand in these highly valuable Asian markets. And with that, I will turn the call over to Craig for a review of the second quarter financials.

Thank you, Marvin, and to everyone joining today. Here are some key financial highlights for the second quarter of 2020. For the three months ended June 30, 2020, revenue was $313,000 as compared to $1,354,000 during the three months ended June 30, 2019. This decrease was predominantly driven by a 76% decrease in sales volume of CGuard EPS from $1.1 million during the three months ended June 30, 2019, to $300,000 during the three months ended June 30, 2020. This decrease, as Marvin mentioned, was mainly due to the fact that procedures with CGuard EPS, which are generally scheduled as non-emergency procedures, were mostly postponed as hospitals shifted resources to patients affected by COVID-19. The decrease is also due to large shipments of CGuard EPS that we made during the three months ended June 30, 2019, a backlog that accumulated in the three months ended March 31, 2019, that we were unable to ship previously due to our former third-party sterilizer equipment failures. Those large shipments did not recur during the three months ended June 30, 2020. In addition, there was an 82% decrease in sales volume of MGuard EPS from $238,000 during the three months ended June 30, 2019, to $42,000 during the three months ended June 30, 2020, mainly due to similar reasons I've just mentioned. The company recorded a gross loss for the quarter ended June 30, 2020, of $120,000 compared to a gross profit of $442,000 for the same period in 2019. This decrease in gross profit resulted primarily from a $448,000 decrease in revenues, less the related material and labor costs, and a decrease following the receipt of $135,000 in compensation received in the quarter ended June 30, 2019, from our former third-party sterilizer for the delays related to the product sterilization interruption during the three months ended March 31, 2019, which did not recur in the three months ended June 30, 2020, offset by a $21,000 decrease in miscellaneous expenses. Gross margin decreased to -38.3% during the three months ended June 30, 2020, down from 32.6% during the three months ended June 30, 2019, driven by the reasons previously mentioned. Total operating expenses for the quarter ended June 30, 2020, were $2.3 million, a decrease of 11% compared to $2.6 million for the same period in 2019. This decrease was primarily due to a reduction of almost $400,000 in clinical expenses associated with CGuard EPS, mainly related to the IDE approval process, $235,000 in compensation related to temporary salary reductions due to the immediate impact of COVID-19 on cash flow, and $82,000 in miscellaneous expense reductions across the board, offset by an increase of $400,000 due to a settlement agreement with the underwriter of our prior offerings. Financial expenses for the quarter ended June 30, 2020, were $34,000 compared to $23,000 for the same period in 2019. The net loss for the second quarter of 2020 totaled $2,480,000, or $0.20 per basic and diluted share, compared to a net loss of $2,206,000 or $1.59 per basic and diluted share for the same period of 2019. As of June 30, 2020, cash and cash equivalents were $13,861,000 compared to $5,514,000 as of December 31, 2019. With that, I'd now like to turn the call over for questions.

Thank you. The first question comes from Benjamin Haynor from Alliance Global Partners. Please go ahead.

Good morning, gentlemen. Thanks for taking the questions, and congrats on all the recent progress. Just first off for me on the Brazil approval, what is SUPRI's plan regarding launching there and what does the timeline kind of look like?

Yes, Ben, thanks for the question. It's an important transition. As we prepared for the registration approval, we were in constant contact with both SUPRI as well as their sub-distributors. Brazil, geographically, is a very large market, so there are sub-distributors within the context of their organization. We did much of the pre-training and effort in advance of the registration approval to prepare for this, most of which was online, and Brazil has been particularly hard hit by the pandemic. All the contracts are now in place, and now it's about really beginning to embed CGuard into the marketplace. They feel very comfortable and confident because of our pre-planning that they will be able to go ahead and initiate CGuard procedures pretty aggressively as they roll out the product. We feel well prepared within the context of this new normal, and we'll have to see how that progresses accordingly. Hopefully, as the COVID issue resolves itself, it will become much more of a hands-on effort than the video work that has been done.

Got it. So the groundwork's completely in place there and just kind of waiting for everything to get out there. Great. So – go ahead, sorry.

Yes. That's correct. The orders were placed as soon as the registration was completed. So, all the groundwork was firmly established.

Excellent. So then, you also mentioned that you're pursuing the dual pathway in France with the standard reimbursement and then at the same time, pursuing the special reimbursement. Can you kind of give us a sense on how those pathways work, and the upcoming developments we should expect on the France front?

Sure. What we identified with our consulting firm in France was sort of two pathways that exist; one is in the existing reimbursement format that they have in France for carotid stents. We were able to pursue what we believe to be a much more aggressive timeline in order to get approval based on the data that we've already achieved and our approval within the CE Mark. However, that doesn't preclude us from going after the special designation for CGuard and asking for a higher reimbursement level. This will take a bit more time, and there are registry obligations that are a part of that in terms of enrolling patients and having a deeper level of scrutiny by the health authority in order to approve a new code as opposed to working off the backbone of their existing code. Our decision was to pursue both because they're not mutually exclusive, and if we receive the existing reimbursement code sooner, then we're prepared to launch and develop our commercial strategy there. Our thought is to go on a direct basis in France as it is, fitting well within the context of that strategy for being able to take advantage of the full amount of reimbursement in the ASP.

That makes sense. And then, what would the timeline look like on the special reimbursement, if it does come?

We’ve been told that it's somewhere in the 9- to 12-month range. We've begun to accumulate the data, understand the protocols, and put in place the necessary components of that, but I think it's probably in a 12-month window. We hope that the standard reimbursement will go much sooner.

So it's still fairly quick, though.

Yes, absolutely.

Got it. So then, just kind of thinking about the big picture, and you kind of mentioned how traditionally open procedures have converted over to less invasive endovascular procedures over the years. And it seems like somewhat of a mystery as to why carotid revascularization has not – sounds like there have been a number of things that have conspired, maybe traditional carotid stenting requiring prior authorization than the open procedure. Can you maybe talk about some of the things that may have held carotid stenting or carotid revascularization in a less invasive fashion back over the years? And maybe how you envision these things changing in the not-too-distant future?

Yes, great question, Ben. I think in the context of that first-generation carotid stents, open cell stents that weren't protected with our MicroNet mesh covering frankly just did not perform according to expectation against carotid endarterectomy or open surgical procedures. There was great expectation that stenting would perform clinically at a much higher level, and I think that was probably the first disappointing area of evidence that they just did not. What's most meaningful about our comparative data and what we're discovering from a clinical performance perspective is that we're not only advancing beyond the standard open-cell first-generation stents but, as measured against endarterectomy and surgery, we're seeing the same level of superiority in terms of fewer post-procedural events. It's also important to understand that in stenting, many of the events that occur are post-procedurally, so our MicroNet is designed to prevent these embolic showers from occurring post-procedurally, addressing many of these issues. I believe that there's a certain level of technology, innovation, and advancement to go along with the accumulated data that we've demonstrated. Through CGuard EPS, we think we have the best solution there. Clearly, the focus is also to advance our efforts with vascular surgeons and get them more comfortable with our system and the endovascular delivery system that we have as opposed to open surgical procedures, which we're doing through our centers of excellence and other commercial activities.

Okay. That’s helpful. And then correct me if I'm wrong, but in terms of embolic protection devices being used on some of those early first-generation carotid stents, my recollection is they weren't always used in those types of procedures. Is that the case?

Most of the time, there is embolic protection through a filter system during the procedure itself. I was referring to the actual MicroNet mesh, which covers our CGuard stent and provides that extra level of protection. The early version of open cell stents did not have a mesh covering for post-procedural when the stent is embedded in the artery.

Right. But I guess I was referring to the filter kind of embolic protection devices that were – now they are pretty much used...

Correct.

In some fashion or another. But early on, the carotid stents that kind of were first-generation, my recollection was the filter devices weren't always used in those procedures, at least early on. Am I misremembering that?

I think that's correct. Right.

Got it. And then you mentioned the peri-procedural device or devices that you're advancing into development. Is there any more you can share on that? And if you do develop those, I would assume those would fall under 510(k) with the FDA, is that correct as well?

That's correct. We're looking at advancing a number of different options within the context of our carotid portfolio. Those can run a full gamut from filters through other advanced opportunities, shorter catheters, and other things. We're continuing to look at all the opportunities available to us to make the CGuard much more user-specific to the vascular surgical community as part of broadening our portfolio in general.

Okay. Great. Well, that's all I had this morning, gentlemen. Congrats again on the progress, and I'm sure we'll be in touch soon.

Thanks, Ben.

Thank you. This concludes the question-and-answer session of the call. I will now return the call to Marvin Slosman for closing comments.

Thank you. Let me conclude by saying that I hope everyone is staying safe and healthy, and our thoughts are with the many people who have been affected by the COVID-19 pandemic. I'd like to recognize the incredible heroism, resolve, and sacrifice of the frontline healthcare workers in fighting COVID-19, as well as our employees who are supporting them. Many of these frontline healthcare workers are our customers and our friends, and we are continuing to be inspired by their selfless efforts and care for others. As has been said, this pandemic represents the world with an unprecedented challenge, which requires an unprecedented response, and that includes our team at InspireMD. We stand ready to respond to the market, and we all look forward to the normalization for us all. Thank you very much for your support.

Thank you very much. Ladies and gentlemen, that concludes the conference call for today. You may all now disconnect.