Good day, and welcome to InspireMD First Quarter 2023 Earnings Call. [Operator Instructions] Please note that this event is being recorded. Now I'd like to turn the call over to Mr. Glenn Garmont with Life Science Advisors. Please go ahead, sir.

Thank you, operator, and good morning, everyone. Thank you for joining us for the InspireMD First Quarter 2023 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, which are 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. 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 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, May 16, 2023. 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, Glenn, and thanks to everyone for joining the call this morning. Without a doubt, the most significant development since our last quarterly update and one of the most significant milestones in InspireMD's history is our completion of a transformational financing through a private placement of up to $113 million. The financing was led by Marshall Wace, with participation by OrbiMed, Soleus, Nantahala, Rosalind and Velan Capital. These are amongst the most highly regarded medical technology institutional investors. It's also worth noting that a certain number of our Board members have also elected to participate in the offering. We are both inspired and humbled by this vote of confidence, which fuels our company's growth and enables our strategic goal to change the therapeutic standard of care in the carotid disease market. Pursuant to the engagement, we received an initial $42.2 million in gross upfront capital, with an additional 4 tranches of $17.9 million each, tied to milestones totaling $113.6 million fully exercised. The warrants are tied to the following milestones: First, the readout of top line 12-month data from our ongoing FDA C-Guardians IDE clinical trial; second, receipt of premarket approval, PMA from the FDA for the CGuard Prime Carotid Stent System; third, the announcement of receipt of FDA approval for the SwitchGuard trans carotid system and CGuard Prime 80 cm; and fourth, the first 5 quarters of commercial sales in the U.S. market. The funds are intended to further catalyze our milestone execution, including approval in launching our new products in the U.S. and in our current served countries, including the CE Mark territories, advancing our tandem lesion indication for CGuard and establishing a U.S. base of business operations and commercial architecture. With our balance sheet significantly strengthened, we can accelerate our plan to drive value inflection by…

Thank you, Marvin. I would like to begin this morning with a review of our recent financing. We entered into a securities purchase agreement, led by Marshall Wace, with a significant participation by other highly regarded health care investors for the sale of common shares or prefunded warrants at each investors election and warrants that in aggregate can bring in up to $113.6 million. As Marvin indicated, we received an initial $42.2 million gross upfront, with an additional 4 tranches of approximately $17.9 million each, tied to milestone-driven warrants totaling $71.4 million if the warrants are fully exercised for cash. This would bring us to a grand total of $113.6 million. The warrants are tied to the following milestones, including the reporting of a 12-month data from our ongoing FDA C-Guardians IDE clinical trial, the receipt of premarket approval, PMA from the FDA for the CGuard Prime Carotid Stent System, receipt of FDA approval for the SwitchGuard trans carotid system and CGuard Prime 80-centimeter in the first 5 quarters of commercial sales in the United States market. Turning now to the quarter, we generated total revenue of $1.239 million, a 4.7% increase over $1.183 million for the first quarter of 2022. This increase was driven by a 6.7% increase in sales of CGuard EPS. During the second half of the quarter, the company's CE mark was reinstated under the MDD directive, allowing the company to resume sales and shipments to the EU countries. The company worked the remainder of the quarter shipping products to reduce the backload of orders that accumulated over the past few months. InspireMD believes that the quarter-over-quarter increase in revenue during the first quarter of 2023 is not representative of the real underlying market demand for CGuard EPS due to the company's inability to ship products…

[Operator Instructions] First question will be from Benjamin Haynor of Alliance Global Partners.

Congrats on the finance team. First off for me, just with the capital raising, can you talk me a little bit about how it might accelerate other indications, particularly N guard and any other R&D products that could impact?

Ben, thanks, I appreciate the question. It's an excellent thought there where we consider this financing to be transformational for a number of different reasons. But I think you highlighted exactly the point, which is we've got a number of R&D projects, which we're working on continuously as well as new indications. And this gives us the capital to be able to fuel those and accelerate those, I think, into a time frame that gives us a good pathway. And we're really excited about the possibilities of having that capital that move things forward. We've mentioned one in particular, which is this indication for acute stroke for tandem lesions and acute stroke, which we've been working on for quite some time. So we've mentioned that in prior calls. And that's just one example of the opportunity to move things forward so that we get the best of what CGuard can offer in the marketplace. So this is a great opportunity for us.

Got it. And then do you have kind of a thought on what the trial design might look like in that indication? Or too early to tell?

Yes. We're working right now with FDA on a pre-sub to submit our expectations of a protocol and a pathway to that, and we'll have good information for you shortly as that unfolds. Obviously, the financing allows us to advance that effort more aggressively. So we'll be back to the market shortly on that one, but in the process of touching up the protocol and submission to FDA.

Okay. Got it. So stay tuned there. And then on the commercial readiness, what activities do you have kind of ongoing now? What's schedule upcoming here? What should we be expecting to hear on that front?

Yes. So as we mentioned, we hired Shane Gleason as the GM of the U.S. business. Shane comes with a real depth of skills and knowledge and experience in this marketplace, and has already begun the process of outreach to many of the leading physicians in the space, both on the vascular surgery side as well as the interventional side of our business. And so over the next few months, you can imagine there's a lot of architecture that goes into building a strong sales organization and strong presence in the market. One of the things we're proud of is the fact that we're currently participating in our IDE trial with about 20 sites in the U.S. And so we have a baseline of both contractual understanding with these hospital systems as well as these physicians. So it gives us a great start just in terms of the administrative effort and how we think about leading into market launch on post approval. So there's a lot to be done between now and that point. But we have a very clear understanding of what it takes to architect and implement a plan so that we hit the ground running once approval takes place.

Okay. Got it. And then on the warrant triggers, I was just curious, I mean, it seems to me like the SwitchGuard and the CGuard Prime 80-centimeter clearance, this could be the first one warrant trigger that you hit. Is that a fair assessment? And how soon could that come?

So I think sequentially, if you take a look at the first one, it would be on the readout of top line data. So we think that, that one is obviously in the closest future point, if you will. The second would be on approval of the current IDE -- the PMA for the current IDE for CGuard Prime. And then the third, obviously, is for our TCAR solution with SwitchGuard and the short shaft CGuard Prime as well. So I think if you just look at the sequence over time, that's the general time frame that we see things occurring in. And obviously, we've been able to separate those for milestones.

Okay. Got it. And then lastly, just a point of clarification for me. It sounds like you resolved any backlog that you had during Q1. Is that the right way to think about it? And there shouldn't be any impact for the current quarter?

Yes, I think that's the right way to think about it, Ben. Obviously, being able to complete those shipments and clear that backlog is a process in and of itself. We've prioritized all the major distributors and accounts in our European markets to make sure that everyone has sufficient inventory, and we'll continue to work through that backlog as well as new orders that are coming in and being able to get back to a normal cadence with demand. So I think you're correct there. We're working through that as quickly as possible. Although we were not in the market for a period of time, our production continued. And we had a readiness for the point where we're at now, which is to be able to ship freely and sell into the European space.

I now turn the call back over to Mr. Marvin Slosman for closing remarks.

Thank you. I'd like to thank everyone for taking the time today to join the call and for the ongoing continued support. I'm extremely excited about what is the transformational financing and what that will allow us to achieve. More than at any other point in the company's history, we're extremely well positioned to execute on our plans to benefit patients and shareholders alike, and we appreciate the ongoing support. Have a good day.

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