Good day, ladies and gentlemen and thank you for standing by. Welcome to the ReShape Lifesciences Fourth Quarter and 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. Following managements prepared remarks, we will host a question-and-answer session, and instructions will be given at that time. [Operator Instructions] As a reminder, this conference call is being recorded for reply purposes. It is now pleasure to hand the conference over to Mr. Scott Youngstrom, Chief Financial Officer. Sir, you may begin.

Thank you. Good afternoon and thank you for joining us on today's call. I am pleased to be joined by Dan Gladney, our President, CEO and Chairman of the Board; who will provide an overview of the Company's recent activities and business highlights. I will then review our financial results for the fourth quarter and full year 2017. After that, Dan will wrap up and following our remarks, we will be available for questions during the Q&A session. As a reminder, this conference call as well as ReShape Lifesciences SEC filings and website at www.reshapelifesciences.com, including the investor information section of the website contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Our actual results could differ materially from those discussed due to the known and unknown risks, uncertainties and other factors. These and additional risks and uncertainties are described more fully in the Company's filings with the Securities Exchange Commission, including those factors identified as Risk Factors in our annual report on Form 10-K filed earlier this afternoon. As an additional reminder, our stock is still listed on NASDAQ trading under the Ticker, RSLS. I will now turn the call over to Dan Gladney.

Thanks, Scott and good afternoon, everyone, thank you for joining us. We have a lot of great news to share with you today but I want to start off with addressing the financing we announced this morning. While we raised a bit less capital at more difficult terms than we set out for, the financing markets have been particularly difficult for early stage micro-cap companies such as ReShape and we are pleased to have gotten a deal done with a strong investor as our partner. While the market will now likely take some time to digest the terms, we and our Board believe this was the best deal for the Company and we are pleased to have a cash infusion as we continue to grow ReShape Lifesciences. In terms of the specifics, this morning we announced that we entered into a securities purchase agreement with an institutional investors providing for the purchase and sale in a registered direct offering of shares of Series D convertible preferred stock and a warrant to purchase shares of common stock for the purchase price of $6 million. We expect to receive net proceeds of approximately $5.25 million after deducting placement agent fees and other offering expenses. We intend to use the net proceeds from the offering to continue to commercialize our efforts for clinical, product development activities and for other working capital and general corporate purposes. I will now share with you all that we accomplished at ReShape Lifesciences in 2017. During this past year our team proved our ability to not only deliver a solid strategy but more importantly to follow through and execute on that strategy. During 2017, we transformed EnteroMedics, a single product company into ReShape Lifesciences, an obese company with a comprehensive offering of technologies to address the obesity continuum…

Thanks, Dan. As Dan mentioned, this morning we entered into a securities purchase agreement with an institutional investor providing for the purchase and sale in a registered direct offering of shares of Series D convertible preferred stock in a warrant to purchase shares of common stock for a purchase price of $6 million. We expect to receive net proceeds of approximately $5.2 million after deducting placement agent fees and other offering expenses. The shares of Series D convertible preferred stock will be convertible into an aggregate of 8 million shares of common stock at an initial conversion price of $0.75 per share and the warrants will have a 1 year term and be exercisable for an aggregate of 35 million shares of common stock at an initial exercise price of $0.75 per share. The closing of the offering is expected to take place on or about April 4, 2018 subject to the satisfaction of waiver of customary closing conditions. We intend to use the net proceeds from the offering to continue our commercialization efforts for clinical and product development activities and for other working capital in general corporate purposes. Moving to our financial results for the fourth quarter and full year of 2017; for the 3 months ended December 31, 2017, we reported sales of $794,000 and gross profit totaling $156,000. This compares to revenues of $297,000 and gross profit of $150,000 for the 3 months ended December 31, 2016. I'm pleased to note that the 2016 numbers do not include revenue from the ReShape Medical acquisition. Our team placed 21 vBloc units in the fourth quarter of 2017 representing an increase of 91% compared to 11 units in the fourth quarter of 2016. 13 of the 21 vBloc units were part of the vBloc Now program. During 2017, a…

Thank you, Scott. As we enter 2018, we're pleased about the significant progress we have made over the last year. We have broadened our platform significantly with acquisitions and have transformed our business from a one-product company to a full-scale rollup of technologies to address the obesity continuum of care. We have published real world clinical evidence that supports the efficacy and safety of our products as solutions for weight loss. We have established relationships and contracts that put into place distribution of and payment for our products. We have conducted a thorough review of our business as we complete integration better aligning our spend to support revenues and to position us well financially as we grow. We are energized about the year ahead as we focus on educating the market about our products, increasing awareness of the clinical benefits and driving topline growth. As you may know, 1 in 3 adults in our country are considered obese, yet currently only approximately 200,000 surgeries a year are done to address obesity in the United States. Clearly, there is a market need that is not being met. ReShape Lifesciences can help fill that gap, we can now offer to bariatric surgeons and GI specialists a toolbox of patient friendly, safe, transformative alternatives through traditional bariatric surgery with healthy outcomes and the ability to reduce cost in the healthcare system. We have a great market with significant opportunities and novel products that are backed by solid clinical evidence. Our goal is to now drive physicians and patients to our products, filling the market need for acceptable, surgical obesity solutions, expanding market penetration and fueling the growth through ReShape Lifesciences. We greatly appreciate the hardwork of all of our employees at ReShape Lifesciences and the continued interest and support of our investors. We are excited for the future of ReShape and how we can impact the lives of our customers and patients. With that, we are now open for questions. Operator?

Thank you everyone for joining us today and have a great evening. Thanks again.