Greetings, and welcome to the Xtant Medical Third Quarter 2017 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Miss Laura Kendall, Interim CFO for Xtant Medical. Thank you. You may begin.

Thank you. Good morning. Thank you for joining Xtant Medical's Third Quarter 2017 Earnings Call. My name is Laura Kendall and I am serving Xtant Medical as Deputy Restructuring Officer. Joining me today for the conference call will be Carl O'Connell, Chief Executive Officer for Xtant. Yesterday afternoon, Xtant issued a press release announcing third quarter 2017 financial results. Today's call is being webcast and includes a slide presentation. The recording will be posted to the company's website for playback. We expect the duration of the call to be approximately 30 minutes. During the course of this call, management may make certain forward-looking statements regarding future events and the company's expected performance. These forward-looking statements reflect Xtant's current perspectives on existing trends and information and can be identified by such words as expect, plan, will, may, anticipate, believe, should, intends and other words of similar meaning. Any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties, including those noted in the Risk Factors section of our most recent annual report on Form 10-K. In addition, any unaudited or pro forma financial information is preliminary and does not purport to project the future financial position or operating results of the company. Actual results may differ materially. For the benefit of those of you who may be listening to the replay, this call was held and recorded on Wednesday, November 22, 2017, at approximately 9 a.m. Eastern Time. Since then, the company may have made additional announcements related to the topics discussed herein. Please reference the company's most recent press releases and current filing with the SEC. The company declines any obligation to update these forward-looking statements, except as required by applicable law. With that, I would like to turn the call over to Carl.

Thank you, Laura. For today's call, I will review the ongoing accomplishments of the company that were achieved in the third quarter as we continue to make significant progress towards our goal of operational excellence. I'd also like to formally welcome Laura Kendall to the call for the review of the quarter financial performance of the organization. For legal advisement, we are not able to field questions following today's call, as we remain in negotiations with a senior lender to restructure the company's debt, and although we remain optimistic that these negotiations will be successful, there are no assurances they will be successful. This ongoing effort includes negotiation amendments to the indenture dated July 31, 2015 and to the additional convertible promissory notes held by Ross Acquisition Offshore LP and Orbimed Royalty Opportunities II, LP, to extend the date for the payment of such interest. We appreciate your ongoing support during this quiet period and look forward to addressing questions as soon as we can. With that, I'd like to review the current state of the organization on our third quarter of business performance. In May, we began working with Aurora Management Partners, having engaged David Baker and his team to initiate and execute restructuring endeavors for improved financial operations and the system processes to support a successful trajectory for profitability of the organization. Collaboration between the Xtant employees and the Aurora team continues to be excellent and are pleased to see the benefits from the relationship and the improved systems that were initiated throughout the first half of the year. I've stated our focus for the second half of this year will be maximizing the company's gross and operating profit while reducing our cost of selling. Last night, we issued a press release announcing $19.8 million in revenue for…

Thank you, Carl. As Carl indicated, consolidated total revenue for the 3 months ended September 30, 2017 was $19.8 million compared to $23.1 million of revenue for the same period of 2016, a decline of 14%. For the 9 months ended September 30, 2017, revenue was $63.3 million, a 3% decrease compared to $65.5 million reported for the first 9 months of 2016. As Carl has related, the decline in sales year-over-year as a result of transitioning to collaborative, profitable distributor relationships by reducing sales volume in unprofitable sales distribution channels with high commission structures and reducing -- also reducing channel conflict. There is also 1 less day sales in the 3 months ended September 30, 2017 than in the prior year. Consolidated gross profit for the third quarter of 2017 was $11.4 million or 57.5% of revenue compared to gross profit of $16 million or 69.2% of revenues for the third quarter of 2016. For the 9 months ended September 30, 2017, gross profit was $39.8 million or 62.9% of revenue compared to $44.8 million or 68.3% of revenue. As Carl previously mentioned, a change in sales mix toward Biologics, which carries a lower margin than fixation products, impacted the gross margins. In addition, increases in inventory and surgical instrument reserves in the quarter ended September 30, 2017 of $1.1 million based on current estimates of missing or damaged parts, primarily on consignment and a onetime charge of $900,000 in inventory and surgical instrument reserves related to litigation with the distributor, reduced gross margin for the quarter and 9 months ended September 30, 2017. Operating expenses for the quarter were $14.9 million, a decline of $3 million from the prior year. Operating expenses for the 9 months ended September 30, 2017 were $50.6 million compared to $51.2 million in…

Thank you, Laura. As outlined in this earnings call, we've made significant strides as an organization, executing aggressively on cost-saving programs, implementing restructuring and operating efficiencies and improving upon our financial processes, all around driving for a more profitable structure in 2018 onwards. We remain optimistic and focused on both the hardware and driving above-market growth for the Biologics business segment, creating market-leading customer value as we move forward with our sales optimization programs with our hybrid sales channel and future surgeon partnership programs. We'd like to thank our shareholders and stakeholders for your continued support and look forward to providing you with an update on our restructuring efforts once discussions with Orbimed are finalized. Thank you.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.