Good morning, and welcome to the InspireMD Second Quarter 2022 Earnings Call. Please note, this conference is being recorded. I would now like to turn the conference over to Chuck Padala with LifeSci Advisors. Thank you. You may begin.

Thank you, operator, and good morning, everyone. Thank you for joining us for the InspireMD Second Quarter 2022 Financial Results and Corporate Update Conference Call. Joining us today from InspireMD are Marvin Slosman, Chief Executive Officer; and Craig Shore, Chief Financial Officer. During this call, management will be making forward-looking statements, not historical facts, and are based upon management's current expectations, beliefs and projections, many of which, by their nature, are inherently uncertain. They involve risks and uncertainties that may cause actual results to differ materially from those expressed in the forward-looking statements. 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 filed with the U.S. Securities and Exchange Commission, and InspireMD's press release that accompanies this call, particularly the cautionary statements made in it. The call contains time-sensitive information that is accurate only as of today, August 9, 2022. Except as required by law, InspireMD disclaims any obligations 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, please go ahead.

Thank you, Chuck, and thanks to everyone for joining our call this morning. During the second quarter, we continued to successfully execute on our mission to establish a new paradigm in the standard of care for carotid artery disease treatment and stroke prevention. The clear highlight was revenue totaling $1.5 million, which represents a growth of nearly 48% compared to the second quarter of last year. This increase was driven by sales of our CGuard Embolic Prevention Stent System. When you ignore the strengthening of the U.S. dollar versus the euro of approximately 12%, our volume of units sold actually increased by 60%, which represented 2,602 units sold this quarter versus 1,623 in Q2 of 2021 and 1,910 units sold last quarter. We believe procedural volume is a more accurate indicator of market penetration as we currently share ASP revenue with distribution partners in the majority of our markets. This will certainly convert to a more robust top line revenue as we move to a direct sales model in additional territories. This market penetration is also reflective of our market share growth, which is now greater than 20% in over half of our markets, with some territories up to 60%. These measurements of business acceleration create tremendous momentum for the runway in front of us, and we continue to innovate and drive an endovascular shift to open surgery with the best performing carotid stent in the market. The enabling features of the CGuard platform through this novel design and proprietary MicroNet mesh protection enable superior vascular patency compared with all other stent devices, including those with double layer design as well as open surgery. With data out to 5 years reflecting consistent clinical outcomes, CGuard continues to demonstrate unmatched short- and long-term performance. Our position is further bolstered with the growing transition from open surgery to the endovascular standard of care when you consider less than 35% of carotid artery disease cases are currently treated through endovascular stenting procedures. So there remains a significant percentage of carotid procedures that we believe can be converted from surgical to endovascular treatment, and with a large and growing body of clinical evidence demonstrating the superiority of CGuard relative to competing therapies and stent alternatives, we look forward to leading this conversion. Therefore, our strategy remains consistent, which is to focus on all specialists treating carotid artery disease to both convert open surgery, as well as promote CGuard as a first-line endovascular device. Turning our attention to other quarterly milestones, our presence at an important medical conference such as the LINC, Leipzig Interventional Course, held this past June, remained an important opportunity for us to demonstrate CGuard in a live case format as well as to meet KOLs influencing the market demand. We had a significant presence at LINC this year, delivering 4 presentations in addition to a successful live case transmission featuring CGuard. The live cases performed by Dr. Andrej Schmidt and Dr. Andreas Fischer at the University Hospital in Leipzig, Germany, performed on a 60-year-old asymptomatic male with progressive and calcified internal carotid stenosis. The procedure was successful with excellent angiographic results. Importantly, the case gave treating vascular specialists from across Europe the opportunity to see firsthand not only CGuard's ease of use, but also the benefits of its superb conformability and MicroNet mesh protection innovation. Just a few weeks ago, we announced that Dr. Juan Parodi has agreed to be a strategic adviser to the company. Dr. Parodi is a world-renowned endovascular pioneer, having performed the first-ever endovascular repair procedure in 1990, and the first carotid TCAR procedure in 1994, the latter using reverse flow for cerebral protection. Dr. Parodi's vast experience, unique perspectives and guidance will be useful as we develop new solutions to advance stroke prevention and improve long-term patient outcomes. The transition of carotid disease management from open surgery to endovascular standard of care is underway. And we believe having Dr. Parodi as an adviser and supporter of our technology speaks volumes about the benefits of CGuard relative to other stent platforms currently on the market. Turning now to other developments. In terms of our U.S. IDE trial, C-Guardians, last quarter we indicated that we opened our first European trial site and enrollment has been accelerated. We currently have 18 U.S. sites enrolling patients, with plans for 4 more, and in Europe, 4 sites are now enrolling and 1 more is expected to begin cases this month for a total of 5. All 22 enrolling sites are building cases at an accelerating pace, which is encouraging. Our current outlook remains consistent with enrollment completion by approximately Q1 2023. Regarding Japan, our discussions with potential distribution partners interested in representing CGuard are ongoing, and we are pleased to be seeing a very high level of interest. An agreement once executed would complement the distribution agreement we have in China that was signed last year. Asia is a very important market for us and the existing standard of care for procedural intervention is predominantly endovascular focused and less surgically dominated than the U.S. and certain European markets. In February, we announced that CGuard EPS would be included as a treatment option in the stenting arm of the CREST-2 trial, which is widely acknowledged as the most significant ongoing trial to scientifically investigate the optimal course of treatment to prevent strokes for asymptomatic patients with significant carotid disease. We view this as yet another important validation of our technology to be approved as an advanced STEMI platform to participate in such an important market effort. We've completed readiness for 20 sites to use CGuard and we anticipate the first patient treatments to be completed soon. In terms of product platform, the CGuard EPS stent platform remains the foundation of our business as the device drives patient outcomes beyond the selected delivery option. To fully realize the full potential of CGuard, we've invested in 2 new delivery systems to drive utilization across the broadest vascular specialist community. We continue to advance the development of our new transfemoral delivery system, CGuard Prime, which will be available in both standard and short shaft versions, compatible with the development of Switchguard, our TCAR accessory device. In combinations, these will offer a transcarotid option to our portfolio designed for those clinical needs and conversion of greater surgical procedures to the CGuard EPS stent. We continue to work tirelessly toward our goal of changing the paradigm of how carotid stenosis is managed. With CGuard EPS, we believe we can offer the best patient outcomes in the broadest set of tools to unlock the tremendous potential of this rapidly evolving market segment. With that, I'll turn the call over to Craig for a review of our second quarter financials. Craig?

Thank you, Marvin. For the second quarter of 2022, revenue was $1.531 million compared to $1.038 million for the second quarter of 2021. This represents an increase of 47.6%. This increase was predominantly driven by a 47.8% increase in sales volume of CGuard EPS to $1.505 million for the second quarter of 2022 from $1.019 million for the same period 1 year ago. This sales increase was mainly due to growth in existing and new markets as well as U.S. sales related to stents used in the CGuard in U.S. Food and Drug Administration clinical trial. Gross profit for the second quarter of 2022 was $431,000 compared to a gross profit of $262,000 for the second quarter of 2021. This increase resulted from higher revenue and a reduction in miscellaneous expenses, partially offset by a reduction in cost of goods sold due to an inventory adjustment that occurred during the 3 months ended June 30, 2021, which did not occur during this current period. Gross margin increased to 28.1% during the 3 months ended June 30, 2022, from 25.2% during the 3 months ended June 30, 2021. Total operating expenses for the second quarter of 2022 were $5.112 million, an increase of $1.410 million compared to $3.702 million for the second quarter of 2021. This increase was primarily due to increases in expenses related to the commencement of the C-Guardians FDA study, resumed activities in trade shows, travel, and share-based compensation. Net loss for the second quarter of 2022 totaled $4.636 million or $0.59 per basic and diluted share compared to a net loss of $3.507 million or $0.46 per basic and diluted share for the same period in 2021. As of June 30, 2022, cash, cash equivalents, and short-term bank deposits were $26.5 million compared to $34 million as of December 31, 2021. Of note, there remains ongoing uncertainty regarding the changing regulatory environment in Europe specific to the timing of the renewal of certification to sell CGuard under the new MDR rule structure. Our focus remains to work with the notified body to secure our renewal without delay. I would like to now turn over the conference call to the operator for any questions.

The first question is from Ben Haynor from Alliance Global Partners.

Congrats on all the progress. First off for me, I guess, just on the Q2 numbers. If I'm doing the math right, it looks like the ASP declined a little bit sequentially. I presume most of that is due to currency, which you called out a little bit. But was there also a geographic mix element in there? And then can you also comment on how you guys are doing in the countries that you've gone direct thus far relative to the other distributor countries?

Ben, it's Craig. Okay. Thanks for the question. So it was predominantly exchange, with a 12% impact, because if you look at the units that Marvin spoke about, we actually grew 60%, and our revenue was only up 48%. There was a slight change in the mix, but it wasn't material. So I'll now turn it over to Marvin and he can give you an update on the direct sales.

Yes, Ben, thanks for the question. So right now, we are direct in the U.K. and in France, and we have plans to expand that direct model likely toward the end of the year, beginning of next year. We haven't openly announced those territories yet as we're in the process of transitioning some of those with our distributor partners. But certainly, more color will come on those as we get those finalized likely by next quarter.

Okay. Got it. And then could you maybe not repeat, but revisit the market share growth statistics you mentioned earlier in the prepared remarks, the 20% to 60% growth you're seeing there? And I was wondering if that's versus other carotid stent platforms or as a share of all carotid procedures.

Yes. So when we calculate market share, we calculate it off of CAS procedures. So carotid stenting procedures versus competitors, not open surgeries. And as we mentioned, in more than 50% of our markets, we have over 20% share, and in some cases, up to 60%. So we certainly use this as a proxy and a guideline to market penetration, and of course, expanding the overall CAS market, converting surgeries to stenting is our equally important objective. But within the current CAS environment, we look at that as a growth goal commercially. So it's sort of those 2 pillars: transition more surgery to stenting and gain higher share percentages within the existing endovascular stenting segment. So that's a big marker for our success.

Okay. That makes sense. Thanks for clarifying there. And then it seems one of your competitors on the TCAR side of things is not going to pursue European regulatory clearance. And it looks like you guys may have kind of the market to yourself with that silo procedure. Kind of any thoughts that you guys have on that?

Yes. We certainly acknowledge that within the European market, there is an ongoing need for considering TCAR as an alternative delivery option. In fact, many vascular surgeons use homemade kits and other things that they prefer, with more of a direct access to the carotid. So we're certainly excited about serving that market with an alternative to our transfemoral system. And I think the combination of those two things will continue to drive more stenting. We have a fairly high conversion rate now within vascular surgeons to even use our transfemoral system. We guess that somewhere around 20% of the overall procedures by vascular surgeons are done transfemorally, but we're excited about offering an option within the European community for TCAR as well, so that we can drive everyone toward a stenting solution, of course, with CGuard as being the best available option. So we're thrilled to have that opportunity.

Okay. Great. And then thanks for the update, you're still on track for the enrollment on C-Guardians. Maybe I missed this, but for CGuard Prime and Switchguard, the development efforts there, those still remain on track is the right way to think about it?

Yes, I think so, Ben. We've moved through the engineering and V&V phase and development part of the process, and we're now on to the regulatory pathway. So assuming things remain on track there, I think our timing relative to what we've spoken about before seems to be pretty consistent, but we're now into the regulatory approval phase, which certainly has some variability.

Sure. That makes sense. And then lastly for me, on CREST-2, congrats. 20 sites, that's maybe more than I might have expected. Do you know how many patients in the CAS arm remain to be enrolled? And it seems like you might expect a decent percentage of those if it's 20 sites?

Yes. It's a good question, Ben. I don't have a firm number on the patient enrollment overall. We know the stenting arm is a bit behind the other options. But we look forward to beginning the process of making CGuard available, like you said, to those 20 sites. We actually started with participants in the C-Guardians trial. There were also CREST-2 enrollers, which has been the easiest path to follow. And then we've actually taken some CREST-2 sites that weren't in C-Guardians and converted those back as well. So it's been a good opportunity to have a discussion on CGuard for both of those options available to patients.

I think that's all I had. Thanks for the update and taking the questions, and congrats on all the progress.

Thanks, Ben. We appreciate the coverage.

This concludes the question-and-answer session. I would like to turn the conference back over to Marvin Slosman for any closing remarks.

Thank you, operator. I'd like to thank everyone for taking the call today and your ongoing support. We are extremely proud of the progress from this quarter and through the first half of the year and look forward to the next quarterly update in November and our continued progress.

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.