Ladies and gentlemen, thank you for standing by. Good morning, and welcome to the InspireMD Year-end 2020 Financial Results and Corporate Update Conference Call. [Operator Instructions] Participants on 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 1 hour after the end of the call through June 9, 2021. 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, Andrew. Good morning, everyone, and thank you for joining us for the InspireMD year-end 2020 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, 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 may contain -- contains time-sensitive information that is accurate only as of today, March 9, 2021. 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, please go ahead.

Thank you, Scott, and thank you all for joining the call and webcast today. The year 2020 began as a year of transition and optimism. And despite of the unprecedented historical impact throughout the world and, in particular, the health care community as a result of COVID-19, we not only weathered these challenges at InspireMD, but have becomes stronger by way of many important milestones achieved during the year. We set a focused direction in 2020 built around our CGuard EPS platform to advance awareness, utilization and recognition within the medical community of the value and superiority of CGuard, as measured by a growing body of clinical evidence and positive patient outcomes in stroke prevention. CGuard's unique and proprietary design makes it the most advanced treatment of carotid artery disease of all other stent technologies and endarterectomy, a highly invasive surgical procedure. Inclusive of all vascular specialty and delivery system options, our goal is to continue to establish CGuard as a carotid device of choice amongst physicians across the multiple clinical specialties that treat carotid artery disease. Our team's performance during these times remains steadfast as we focused on availability of our products to our served markets with a patient-first mindset. Execution of our strategic priorities, financial stability and the growth of our commercial footprint, all continued with focused determination. As expected, revenue performance for the year was impacted primarily by the effects of COVID-19, which restricted elective procedures across our markets. We anticipated procedures to return to pre-pandemic levels and even grow as vaccines continue to roll out globally, and we will return to a more normalized way of life. Even with the headwinds of extraordinary and unforeseen onetime historic events, we experienced a promising year of remarkable milestones and have positioned our business for success. Supporting and growing…

Thank you, Marvin, and to everyone for joining today. Here are some key financial highlights for our fourth quarter and year-end 2020 results. Total revenue for the 3 months ended December 31, 2020, was $158,000, a decrease of 84.4% compared to $1,013,000 during the 3 months ended December 31, 2019. Revenues were negatively impacted by our settlement of litigation with a former distributor relating to a 2014 transaction, as Marvin alluded to earlier. Per the settlement, we agreed to pay them $580,000. Under U.S. GAAP, we are required to charge that amount against sales. Excluding such impact, revenue was $738,000, a decrease of 27.1% compared to $1,013,000 during the similar period in 2019. This decrease was driven mainly by a 25.2% decrease in sales volume of CGuard EPS from $921,000 during the 3 months ended December 31, 2019, to $689,000 during the 3 months ended December 31, 2020, mainly due to the postponement of procedures from CGuard EPS, which are generally scheduled or nonemergency procedures as hospitals shifted resources to patients affected by COVID-19. The 46.7% decrease in sales volume with MGuard EPS from $92,000 during the 3 months ended December 31, 2019, to $49,000 during the 3 months ended December 31, 2020, was also mainly due to the impact of COVID-19, as previously mentioned. For the 3 months ended December 31, 2020, we had a gross loss of $390,000 compared to a gross profit of $259,000 during the 3 months ended December 31, 2019. This decrease in gross profit resulted from the impact of the $580,000 settlement with our former distributor as well as a $79,000 decrease in revenue less the related material and labor costs. This decrease was partially offset by a decrease of $10,000 in miscellaneous expenses during the 3 months ended December 31, 2020. Gross margin…

[Operator Instructions] The first question comes from Benjamin Haynor of Alliance Global Partners.

First up for me, just on the CGuard trial here. When do you kind of expect -- how do you expect the ramp-up of sites to track? When do you expect the first patient in? Any color you can give us on kind of the kickoff of this thing would be helpful.

Great. Thanks, Ben. Thanks for the question. Yes, we're excited about the progress that we're making. Naming Chris Metzger as the PI was a huge advantage for us. And we have subsequently been working diligently to make sure that all the setup is properly done, sites have been identified, the protocol has been reviewed and so forth. So I think it's one of those scenarios where we want to measure 3 times to cut once. And so we're trying to make sure that everything falls in place nicely. We anticipate first patient enrollment sometime around the June 1 time frame, sometime beginning of June and everything since we've hired HCC as our CRO and brought Chris on board has gone very well. We're also in the process of building additional investigation sites in Europe. And we feel that that's important, given the experience of some of our operators in the European market as well. So we look to generally that time frame to begin our enrollment of patients.

Okay. That's helpful. So we're about a quarter out from there. And then the European sites, how -- I know you can't do more than half, but how many do you expect to add? Or is it too early to be talking about that?

Yes. We don't have a firm number at this point, Ben, but I think it's safe to assume that the quality of the sites is most important, more than quantity. And we anticipate that up to about 20% of the enrollment, we believe, is reasonable from the European sites and operators who have had a breadth of experience using CGuard at this point. So we look forward to fine-tuning that number. But at this point, that's where we think we'll land.

Okay. So stay tuned. Got it. And then just the reimbursement process. How is that moving along in France? Is that something that we could see before the year is out? And then what's your expectation once you do gain the reimbursement? Do you have kind of that early adopter cohort kind of defined over there?

We do. The process has gone quite well. We submitted the dossier at the beginning of the year. And so far, all the indications back from the French Health Authority has been positive. And we hope to be able to get the reimbursement finalized and approved within, let's call it, the third quarter. So we hope that for 2021, we'll be able to realize the benefit of entering the market commercially. We've already put into place our commercial backbone, begun to think about locations, operators, and we want to certainly be prepared that once we get that reimbursement and approval, we're ready to go full speed ahead. So there's great momentum from that standpoint and an awareness within the French market, obviously, of CGuard. Even though we've not been commercially available there before, the European market in general is well aware. So we have a couple of KOLs in particular that are really excited to have the product in their hands.

Okay. Great. And then now that you've launched in -- I believe you launched in Brazil, I know you have a lot of stuff in place there. What's been the initial feedback there?

Yes. The uptake has been quite strong, yes. Unfortunately, the Brazilian market was affected by COVID in a really terrible way. And so it's been a bit of a challenge. And the country, in general, is quite large and diverse. We've got 5 subdistributors that are in place. But the results so far have been remarkably positive, and we've tried to focus on the operators that are really at the high-volume centers and the innovators and really kind of build our base of business from there. And so far, it's gone really well. So we hope that, that will continue to get out into deeper segments of the market as we get into 2021. But so far, so good.

Good deal. And then on the R&D front in terms of the new delivery and accessory solutions that you mentioned. Was more of that spending, the $0.5 million or so that you spent last year, it was more of that in the latter half of the year? And then it does sound like we could hear more on what those products look like in the near future. Any more color you can provide there?

Yes. I mean the spend was generally level loaded, but as we get closer to submitting to DEKRA and other regulatory bodies, we -- the spend obviously increased as we get closer to the end here. And certainly, we want to discuss those in detail. It's a little bit premature at this point, but we're really excited about the fact that we've got a couple of new delivery systems available or coming to the market, which we hope will broaden both access and acceptance to the CGuard EPS platform. Generally speaking, our goal is to make sure that our stent is used by the broadest range of vascular operators, and we want to make sure that we have a full breadth of delivery systems that allow this as a first-line stent solution.

Got it. And then lastly for me, one of the other players in the carotid market has, I guess, now filed a PMA for standard risk patients. I just wanted to get your thoughts there. I mean, if it's -- I know that's, whatever, 1/3 of the market or so. But your thoughts on that and whether that kind of expands the market or kind of, I guess, if they get it, it kind of paves the way for adoption of CGuard once you guys are able to gain U.S. clearance?

Yes. Ben, I think we certainly value the fact that converting surgeries over to stenting is certainly our priority, and our focus has been and will continue to be on the value of CGuard as the best stent in the marketplace. But we certainly welcome that trend of transition into the endovascular world from surgery. And we'll continue to do our efforts to support those things. But certainly, we believe that, that transition was inevitable. And I think the value of multiple companies approaching the same objective, maybe a bit differently, but approaching the same objective will only benefit that conversion from taking place and getting surgeries converted over to stenting. So we're encouraged by all of that adoption and conversion.

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

Thank you. I'd like to thank everyone for their ongoing support of InspireMD. And to remind you that despite the challenges of 2020, we're well positioned for a successful and impactful 2021. In spite of the continued COVID-associated challenges, to date, CGuard EPS continues to outperform with clinical evidence all other competitive carotid stents. And we will continue to drive this awareness to our customers and provide the best absolute clinical and patient outcomes. We're expanding our reach and preparing for perhaps the most exciting year ahead in the company's history as we prepare to execute on our U.S. pivotal trial, and we look forward to continuing to report on our success. And we thank you for your support.

The conference has concluded. You may disconnect your line at this time. Thank you.