Good morning and welcome to the InspireMD Third Quarter 2015 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Vivian Cervantes, IR. Please go ahead.

Thank you. Good morning and welcome to InspireMD's conference call and webcast to discuss third quarter ended September 30, 2015 results. For today's call, we have InspireMD's CEO, Alan Milinazzo; CFO, Craig Shore, and COO, Jim Barry. During this call, the company will be making forward-looking statements. These statements can obviously differ from actual results, so to rely on them is subject to risk. Factors that could cause forward-looking statements in this call to differ materially from actual results are discussed in the company's Form 10-K for the year ended December 31, 2014 and any subsequent filings with the Securities and Exchange Commission. At this time, I will turn the conference call over to Alan.

Thank you, Vivian. Good morning everyone and thank you for joining our conference call for the third quarter and three month period ended September 30, 2015. During the call, we will review our results for the quarter, our 2015 agenda and the progress we have been making as we execute on our overall plans for the year. These include activities that position us for growth in 2016, such as partnership agreements that facilitate entry into high growth markets, targeted collaborations that validate the clinical benefits of our proprietary MicroNet technology, as well as enhancing our ability to continue to fund our ongoing activities and continue to improve our financial outlook. As we recently announced, we are pleased to partner with one of the most innovative and one of the fastest growing companies in the interventional space, Penumbra Inc. Our expectation is that our distribution agreement will provide us with predictable, sustainable and profitable revenue growth in our carotid franchise over the coming months, quarters and years. In addition, we continue to advance collaboration discussions with several companies across various indications, coronary, carotid and neurovascular. Given the momentum of these discussions and the critical role they play in the financial outlook of the company, we have engaged and outside financial and strategic advisor to advance our process and take conversations to completion, helping ensure that we get the best deal for our shareholders. In parallel, with our external activities, our internal neurovascular development pipeline is also on track with expectations for second half 2016 CE Mark submission. Dr. Jim Barry will provide more color on these activities in a few moments, but we remain on track with results from our pre-clinical work expected to be completed in December 2015. As mentioned on prior calls, we have a four part plan to…

Thank you, Alan and good speaking to everybody this morning. Today I want to update you on our continued progress with the CGuard embolic prevention system and our neurovascular flow diverter program. As Alan mentioned, we continue to be excited about working with our CGuard distribution partner Penumbra. Penumbra is a leader in the interventional field and we are already seeing the benefits of our collaboration in multiple dimensions. The CGuard rollout has been proceeding as planned and we just completed the formal [launch] [ph] training program of the Penumbra's sales organization in Europe. To date, CGuard has been used by approximately 100 physicians in about the same number of centers in 25 countries across all four specialties. Interventional cardiology, vascular surgery, interventional neuroradiology and interventional radiology. Around 300 cases have been performed to date and the feedback continues to be extremely positive on all aspects of the product. CGuard also took center stage at this year's TCT meeting in San Francisco which just concluded a few weeks ago. Is the largest annual interventional meeting in the world an CGuard was featured prominently in the week's main carotid session with a panel that consisted of the who's who in carotid stenting. Professor Piotr Musialek, a world renowned interventional radiologist and high volume CGuard user, provided an overview of the state of carotid stenting with mesh based stents. It was clear during his presentation that physicians not only see the advantage of mesh covered stents but also recognize this advantage due to the amount of clinical evidence that has resulted from the growing use of CGuard in clinical trials. The next important clinical milestone for CGuard will the 12-month CARENET data, which will be reported at the Veith Symposium on November 20th in New York by Professor Musialek. CGuard, through the…

Thank you, Jim. Let met begin with our revenue results for the third quarter. Revenue for the third quarter ended September 30, 2015 increased $300,000 to $600,000 compared to $300,000 during the same period in 2014. The increase was predominately driven by sales of $300,000 of our new product CGuard, our carotid product, which was launched to a limited number of accounts in October 2014. Sales of CGuard during the three months ended September 30 were predominately driven by initial sales to our new strategic distribution partner, Penumbra, Inc. The company’s gross profit was $100,000 compared to a gross loss of $100,000 for the same period in 2014. The improvement of 217% was largely attributable to the increase in product revenues and a decrease of write-offs of inventory of MGuard Prime. These improvements in gross profit, however, were partially offset by an increase in labor and material costs attributable to higher revenues. Total operating expenses for the quarter ended September 30 were $3.5 million, a decrease of 45% compared to $6.4 million for the same period in 2014. This decrease was primarily due to a reduction of expenses related to MGuard Prime MASTER II trial which was suspended in October 2014, a decrease in compensation related expenses and other savings associated with our cost reduction plan. The loss from operations was $3.4 million, a decrease of 47% compared to a loss of $6.5 million for the same period in 2014. Financial expenses were $200,000, a decrease of 27% compared to the same period in 2014. This decrease was primarily due to a decrease in interest expense due to the reduction in principal of our outstanding indebtedness. The net loss for the quarter ended September 30 totaled $3.6 million or $0.48 per basic and diluted share, compared to a net loss…

Thank you, Craig. Let me take this opportunity to discuss ongoing collaboration opportunities with several companies across multiple indications. We retained an external financial and strategic advisor to build upon the momentum we have created over the past several months. This will facilitate our ability to assess the best options which maximize shareholder value. This includes among a host of scenarios, the potential for joint ventures, licensing agreements and direct investments into the company. Before opening the call to questions, I would like to summarize that we continue to make tangible progress across multiple dimensions since our shift to our neck-up strategy earlier this year. CGuard revenues are growing, expenses are down, cash consumption is decreasing and our partnership efforts are steadily advancing. Senior management and the board of directors continue to operate with a high sense of urgency as we position for sustainable growth in 2016. We believe the leading indicators for success are trending in a positive direction. With that operator, I would like to take questions from the conference attendees. Thank you.

[Operator Instructions] The first question comes from Josh Jennings of Cowen & Company. Please go ahead.

So at VIVA last week there were multiple instances of key opinion leaders noting the promise of CGuard in terms of reducing stroke rates in carotid stenting procedures. There's presentations specifically on mesh covered with stents that noted the impressive CARENET data in multiple conditions, also expressed their hope that CGuard will be investigated in the U.S. trial eventually. I know it's not on the table right now. I was wondering if you haven't -- and the U.S. clinical community is obviously there for CGuard, can you speak about the enthusiasm amongst physicians internationally and what you are doing to build that enthusiasm.

Hey, Josh, it's Alan. I will start and maybe Jim wants to offer a little bit as well. We continue, I mean in every clinical meeting we attend, the physician feedback and excitement around mesh covered stents is growing. We are not alone in this space although we are ahead in this space which I think is an important distinction because growing the market, growing the carotid market remains elusive. Their remain clinical studies to be done and those are going to cost money to obviously do those. And hence our reason for partnering in this space. So we are excited that mesh covered stents are getting a lot attention and then when physicians are asked, they view CGuard as having the most compelling data at this point, and likely the most compelling impact on the market. So we are very excited. We continue to review our FDA strategy. We obviously would need some help to do that. But we are seeing some very nice uptick on the product early on in our launch activities. And again, we see a lot of this physician excitement at all of our clinical meetings. Even TCT before that as you know, we got a lot of attention. But Jim, I don’t know if you want to add anything else to those comments?

Yes. Happy to. I would tell you Josh that our advisory board for CGuard actually not only uses international physicians but we have some of the leading KOLs I carotid artery stenting from the U.S. And in fact if you look at that panel that happened at TCT, several of those U.S. investigators are actually advisors to us. So I would say the enthusiasm by U.S. investigators is very very high and they have been very helpful to us. As Alan said, we talk about FDA, planning, and those guys have been very very helpful to us, sort of putting very preliminary plans in place of what it might look like to bring CGuard into the U.S.

Great. And just on the competitive front. Two of [indiscernible]. Are you seeing either of those products competitively in the international markets?

Not very much. I mean there are few areas where the product is being used in the clinical setting but we don’t really see them very much in the commercial setting. There are a couple of locations, Josh, but I think given the fact that they really don’t have clinical evidence to fall back on, it's limited their ability to move forward with commercial activities. And as I said, we are happy we are not alone in this endeavor but we are even happier we are ahead relative to the clinical data in the commercial activities because we think that the CGuard sets a much higher bar for both [indiscernible] and for [indiscernible]. But we really don’t see them very much in the commercial setting yet.

Understood. And just in terms of the Penumbra launch in Q4. Are there any capacity constraints and how should we think about the ramping with Penumbra's distribution channel now in place.

Yes. So we were able to satisfy, what I would call the preliminary launch requirements that Penumbra gave us. We just completed the formal training, classroom training and now we are out working on evaluations and sort of getting the traction in the market place. So probably a little bit too early to comment on what that looks like going forward but certainly we were able to satisfy the requirements for the preliminary launch activity. So we were not constrained. We do also have other markets, Josh, as you will recall. We have some other markets where Penumbra is not direct that we do sell through distributors and we continue to see improvements in the demand for the product as the rollup in those countries continues

Last one on CGuard. I think, did Jim comment on next generation delivery system that you guys are working on and any additional color there.

Yes. Josh, no, not a lot of detail. Again, it's sort of the evolution of a product. You always look to improve it and the [wrap and exchange] [ph] catheter came out early on. We got some great feedback from some physicians who thought that they would love to see some better delivery retrieval properties for that catheter. So we made some very minor changes which has been received again quite well. And that should be ready to do early next year. I think the side benefit to that is it turns out that the actual cost of that system is significantly less than the one we currently have.

Understood. And then my last question. Just on your strategic alternative investigation. How long do you anticipate this process to take and other maybe a hard question to answer, but when could we hear an update on progress on some of these initiatives. Could we expect an update on the Q4 call? Thanks a lot guys.

Thanks, Josh. Yes. Always hard to predict, as you said, it's always hard to predict when things happen. But we have been at this for some time. We view the partnership as critical to our ongoing financial viability and I think one of the things that we found out is that our technology is so interesting, it can be used in so many different applications that at some point you have to sort of say, enough is enough. Pencils down and let's talk about what the end game looks like here. And so that’s why we have an advisor engaged to help us do that. We are painfully aware of our overall cash outlook. It's a critical part of what we do and so we really want to get to the point where we can announce something sooner than later but it would be difficult for me to give an exact date just given the way that these thing move. But having an advisor involved will, we think, bring this to a conclusion in a fashion that really does maximize shareholder value. Whatever the outcome is and I have listed a few, but there are multiple different options in terms of the way this could go.

[Operator Instructions] The next question comes from Yi Chen of H.C. Wainwright. Please go ahead.

First question. Can you give us some color on your expectations on what the CGuard revenue may look like in 12 months time and whether there is any difference between your expectation and Penumbra's expectation?

Hi, Yi. We haven't given any expectations, forward looking statements on revenue. I will say that this is a new product category for Penumbra as well and so I think we are both getting a sense of what each quarter is going to look like. So we have a good handle on what the short-term needs are. We have been able to satisfy those. We satisfy those needs but it's too early to say given the rollout -- what the stage of the rollout is as to what 2016 would look like.

Thanks. Regarding neurovascular flow diverter, once you get to see market [probability] [ph], do you plan to market yourself or do you plan to find a partner for it?

Yes. That’s a really good question. I think that really depends. We do have a distribution network that is a shadow of its former self. That was a big part of our cost reduction activities. And of course, we want to continue to explore things that make sense with other partners. But at this point it's too early to tell but I can tell you, we would not be funding a direct sales effort that in that way. So either through a partnership or through an independent distribution group but we would not be funding it through direct reps.

Thanks. Final question. If the CGuard revenue ramps up pretty well and you also get CE Mark approval for neurovascular flow diverter and it's an interested party stepped forward to give you an offer to acquire InspireMD, are you amenable to such an offer?

Listen, we are a publicly traded company and so want to do what's best for our shareholders and so if the situation arose where someone saw value and wanted to make an offer, we certainly would be open to that, given the nature that the company is public.

This concludes our question-and-answer session. I would like to turn the conference back over to Alan Milinazzo, Chief Executive Officer, for any closing remarks.

Thanks, Andrew and thanks everyone for joining us today. We continue to be focused on delivering on the strategic imperatives and continuing to work on creating value for our shareholders. This includes entry into the strategic partnerships to bolster our growth, these collaboration agreements that validate the scarcity value on our technology platform and we continue to move into these highly valued markets both with partnership activities and through our own organic development activities. Appreciate your ongoing support and patience for the past couple of quarters and look forward to keeping you updated on our progress. Thanks for joining us.

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