Greetings, and welcome to the Xtant Medical First Quarter 2018 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Laura Kendall, Principal Accounting Officer. Thank you. Ms. Kendall, you may begin.

Thank you. Good morning, thank you for joining Xtant Medical's first quarter 2018 earnings call. Yesterday, Xtant issued a press release announcing first quarter 2018 financial results. My name is Laura Kendall, and I am serving Xtant Medical as Deputy Restructuring Officer and Principal Accounting Officer. Joining me today for the conference call will be Carl O'Connell, Chief Executive Officer for Xtant. At this time, all participants are in listen-only mode and a brief question-and-answer session will follow the formal presentation. Today's call is being webcast and will be posted on 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 future performance. These forward-looking statements reflect Xtant's current perspective 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 risks 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, May9, at approximately 09 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 filings with the SEC. The company declines any obligation to update these forward-looking statements, except as required by applicable law. Now, I'd like to turn the call over Carl.

Thank you, Laura, and thank you everyone for joining Xtant Medical's first quarter 2018 conference call. We have maintained the momentum, created in 2017 with a continued focus on restructuring activities to transform the company for long-term profitability. Our first quarter revenue declined in the comparison to 2017. This was primarily due to lower fixation revenue, mostly as a result of making progressive changes to our sales channel throughout 2017 and into the first quarter. Terminating some profitable distribution relationships and reducing high commission rights and non-profitable contracts. We will continue the positive shift away from these channels enabling the company to stabilize end user pricing, as well as strive better margins and profitable growth opportunities long-term. We anticipate that applying in our fixation revenue, this market was highly competitive with increasing reimbursement pressures and demand for innovation and clinical justification. We continue to evaluate this space and as best opportunities to license and develop unique solutions. We expect growth for the remainder of the year in biologics, which will be driven through increased performance management and our top distributor partners and increased national account penetration of integrated delivery network accounts. Our focus for growth in 2018 will be in the flagship product OsteoSponge. In addition to OsteoSelect and OsteoSelect plus DBM product lines as well as 3DM fiber technology. With this product mix leading to DBM category, we continue to be one of the largest players in the U.S. bone replacement market. We also saw a robust growth driven by congressional customers to our valuable sale [indiscernible], OsteoBuy, a product we launched in mid-2016. We anticipate the momentum and interest in our biologics portfolio will continue throughout the year. We remain focused on three transformational initiatives, operational excellence and inventory utilization, sales channel optimization and strategic positioning for market…

Thank you, Carl. Consolidated total revenue for the three months ended March 31st was $17.9 million compared to $22.1 million for the same period last year. As noted by Carl, the year-over-year decline was due to a shift in our sales channel for our efforts to move away from some reseller and higher than acceptable commission distribution relationship and competitive factors affecting the sell-through of our fixation products. Gross margin for the first quarter was 68.2% compared to 67.5% during the first quarter of 2017. The improvement was mainly due to cost containment initiative and improvements in end user pricing for modifying and exiting certain reseller relationships. First quarter 2018 operating expenses were 77.4% of revenue down $3.6 million compared to the quarter ended March 31, 2017. The improvement was mostly attributable to the execution of our channel strategy initiative as we move away from higher commission relationships and unprofitable revenue. The cost saving initiatives Karl discussed also contributed throughout the quarter. The net loss for the quarter was $5.3 million compared to a net loss of $5.8 million last year. The company defined adjusted EBITDA as net income loss from operations before depreciation amortization non-recurring expenses and non-cash stock-based compensation. Non-GAAP adjusted EBITDA for the first quarter of 2018 was approximately $1.1 million compared to a loss of approximately $100,000 for the same period of 2017. At March 31, 2018 we have $6.2 million of cash and cash equivalents, $10.3 million of net receivables and $22.5 million of inventory. As previously note press releases and SEC filings which can be found on the company's website Xtant successfully completed the recapitalization of the company lowering its debt and accrued interest by approximately $76 million through a conversion of all convertible debt which returned stockholders equity to a positive position. In addition, the company completed a private placement of common stock for $6.8 million enhancing the company's liquidity position. As the final step of the restructuring we recently announced that April 27, 2018 was a record day for rights offering of share to common stock. At the commencement of the rights offering each holder of common stock will receive 0.09 non-transferrable subscription rights for each share of common stock held April 27, 2018. Each hold subscription right will tie up the holder to purchase one share of the company's common stock through $7.20 in cash. In addition, holders will have over subscription rate pursuant to which they may be able to purchase additional shares at the subscription price to the extent that not all subscription rights are exercised. The company expects subscription materials will be mailed out on or about May 18, 2018 to holders of the company's common stock on April 27, 2018 and that the rights offering will close on or about June 18, 2018. Now, I'd like to hand the call back to Carl for closing remarks.

Thank you, Laura. We are excited to have completed our restructuring agreement with OrbiMed this February. The funds and support from this endeavor, we will continue to focus on operational excellence, driving our margins for profitable growth, engaging our employees to excel even further and enhancing our sales channel optimization strategies. Our new board which was put in place is part of the previously mentioned restructuring, has spent their first 90 days working hard to help us determine the best path forward for the company's positioning in the market place and strategic opportunities. While they're focused on ensuring the successful completion of the restructuring they will continue to work to help us to develop our strategic positioning throughout the year. We've made significant strides as an organization I believe we have great opportunities ahead and looking forward to executing on these initiatives. Before closing, I would like to thank our stockholders of OrbiMed for their continued support, not only throughout 2017, but moving forward in 2018 and beyond. Thank you for joining us today's call and with that, I'd like to hand the call over to questions.

Thank you. We'll now be conducting a question-and-answer session. [Operator Instructions] There are no questions being registered this time Mr. O'Connell.

Thank you. On behalf of the company, I would like to thank you for your continued support of Xtant Medical. Have a great day.