InspireMD Inc.

Good morning, and welcome to InspireMD's second quarter 2026 earnings conference call. Currently, all participants are in listen-only mode. We will facilitate a question and answer session towards the end of today's call. As a reminder, this call is being recorded for replay purposes. Joining us today from InspireMD are Marvin Slosman, Chief Executive Officer, and Mike Lawless, Chief Financial Officer. During this call, management will make forward-looking statements which are based upon management's current expectations, beliefs, and projections, many of which by their nature are inherently uncertain. These forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those expressed in such forward-looking statements. More detailed information about the company and the risk factors that may affect the realization of forward-looking statements is set forth in the company's filing. with the U.S. Securities and Exchange Commission, including its annual report on Form 10-K, quarterly report on Form 10-Q, any updates in its current reports on Form 8-K, as well as ByRMD's press release that accompanies this call, particularly the cautionary statements made in it. During the call today, the company may also discuss certain non-GAAP financial measures. For a more detailed discussion of these non-GAAP financial measures and historical reconciliation to the most closely comparable GAAP measures, Please refer to the company's earnings release. This call contains time-sensitive information that is accurate only as of today, August 17, 2026, 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, operator, and good morning, everyone. The second quarter was an important period for InspireMD. While our reported financial results reflect the accounting impact of the voluntary recall of our approved Seaguard Prime 135 carotid stent system, the quarter was defined by the actions we took to strengthen the business, sharpen our execution, and position our company for a successful return to the U.S. market. Over the last several months, we've remained focused on four priorities. Optimizing our international business, advancing our key regulatory programs and milestones to U.S. market reentry, implementing design enhancements to the Seaguard Prime delivery system, and aligning our organization and cost structure around these priorities. I believe we are making meaningful progress on each of these objectives. Notwithstanding our temporary absence from the U.S. market, our total revenue was essentially unchanged from the second quarter of last year. It's important to note our international business continued to perform very well, growing approximately 21% year over year, reflecting continued physician adoption and strong demand for C-Gard across our international markets. At the same time, our reported US revenue reflects customer credits associated with the voluntary recall announced at the beginning of May. Those credits more than offset gross US product sales during the quarter and therefore obscure the underlying performance of the business. Importantly, our confidence in the C-Guard implant remains the foundation value driver of our business and will continue to be the asset that builds our market leadership, regardless of which delivery method is chosen for each patient's need. The clinical outcomes and evidence we've developed over many years has set a new standard of care, translating to physician enthusiasm and utilization, which remain strong, giving us confidence as we anticipate our U.S. relaunch. We continue to believe C-Guard is the most differentiated technology available for carotid revascularization and stroke prevention. Turning now to our C-Guardians 2 submission of approval of our C-Guard Prime 80 platform for TCAR. We recently announced an outstanding 30-day results from the trial which we believe strengthen our pending submission. In fact, our latest discussions and feedback from FDA remain constructive and interactive, and all signals point to potential approval in the fourth quarter, as we previously indicated. Once approved, the C-Guard Prime 80 platform would essentially double our addressable market by offering our implant for TCAR in addition to CAF procedures. We also enrolled the first patient in C-Guardians 3, our pivotal study evaluating next-generation switchguard neuroprotection system. Taken together, we're encouraged by the progress across our comprehensive TCAR programs. Also, as previously noted, our submission of the original C-Guard platform for CAS, clinically proven in over 75,000 global US cases, continues and based on the progress to date, we currently expect a decision from FDA in the fourth quarter of this year. Should these anticipated approvals be realized, We would have both TCAR and CAST platforms commercially available before the end of the year, giving us the opportunity to address the entirety of the approximately 75,000 annual stenting procedures in the US. When we spoke to you last quarter, we outlined a clear plan to address the improvements for the C-Guard Prime 135 CAST delivery system. Since then, we've identified the required design modifications, initiated validation and performance testing, and continue to work closely with the FDA as we advance these improvements with a completed early submission of our pre-sub dossier. These modifications and testing have gone exceedingly well, and we're optimistic that the associated timelines of first half of 2027 for market reentry of this platform has the potential for an earlier approval. While this has clearly been a challenging time for the company, I believe our ability to weather these setbacks has made us a stronger and more focused organization. The Seaguard 135 delivery system modifications and remediation is well understood. The path forward is clearly defined, and our team remains fully focused on implementation. During the quarter, we also took decisive actions to better align our organization and cost structure with our near-term priorities. These decisions allow us to focus our resources on the regulatory and commercial milestones that we believe will have the ability to create the greatest long-term value for our shareholders. We also believe we've created a leaner, more efficient and focused organization that is better positioned to execute, not only to return C-Guard to the U.S. market, but to expand access for our physicians and patients they treat. Before turning the call over to Mike, I'd like to leave you with four key messages. First, the underlying fundamentals of our business remain strong as demonstrated by continued international growth, physician anticipation for our C-Guard implant as what we believe is the best treatment for carotid disease with clear line of sight for our U.S. market relaunch. Second, we believe voluntary recall is proving to be a well-defined and manageable event We understand the issue, we've identified the solution, and we're executing against a clear regulatory pathway to reestablish traction and growth. Third, we continue to advance multiple regulatory catalysts, including C-Guard Prime 80 for TCAR, the redesigned C-Guard Prime 135 platform for CAS, the original C-Guard delivery system, as well as our next generation switchguard neuroprotection system. and finally we've aligned our organization and cost structure to support these priorities while positioning InspireMD for long-term sustainable growth. While we still have important work ahead of us, I believe today we're a more focused and disciplined company and ultimately have better positioned ourselves for success. With that, I'll turn the call over to Mike to review the financials. Mike.

Thank you. As Marvin described, the second quarter financial results need to be interpreted in the context of the voluntary recall that we announced at the beginning of May. For the second quarter of 2026, total revenue was $1.8 million, which was essentially flat with the revenue for the second quarter of 2025. The recall action affected our reported revenue in two ways. First, we ceased commercial sales of Seagard Prime late in April. So we generated less than one month of sales in the US before the recall took effect. Second, we booked a $734,000 credit for the return of the Seaguard Prime 135 product that had not yet been consumed by our customers. International revenue was $2.1 million, representing growth of 21% versus the same quarter a year ago. This performance continues to reflect the growing global demand for our Seaguard The entirety of international growth was driven by continued demand while changes in foreign exchange rates were immaterial. Gross profit for the second quarter of 2026 was a loss of $0.8 million or negative 43.7% of revenue compared to a gross profit of $0.3 million or 17.6% of revenue for the second quarter of 2025. This decline in gross margin resulted primarily from the $734,000 credit to revenue that I described previously and a $612,000 impairment charge for Seagard Prime 135 inventory on our books that was no longer commercially viable as a result of the recall. On a non-GAAP basis, which excludes the impact of the recall-related customer credits and impairment charge, adjusted gross profit was $0.6 million. A reconciliation of adjusted gross profit to gross profit, the most directly comparable gap measure, is included in today's earnings release and posted in the investor relations section of our website. Total operating expenses for the second quarter of 2026 were $13.7 million, an increase of $0.4 million compared to $13.3 million for the second quarter of 2025. The increase was primarily due to greater headcount-related expenses for the U.S. commercial team and higher development, clinical, and regulatory expenses related to SwitchGuard NPS and SeaGuard Prime 80 for TCAR, partially offset by lower general and administrative compensation expenses. Financial income was $121,000 as compared to a loss of $132,000 for the second quarter of 2025. Net loss for the second quarter of 2026 totaled $14.3 million or 17 cents per basic and diluted share compared to a net loss of $13.2 million or 26 cents per basic and diluted share for the same period in 2025. As of June 30, 2026, cash and cash equivalents and marketable securities were $30.4 million compared to $54.2 million at the end of 2025. As Marvin discussed, We have proactively taken actions to reduce our cost structure and improve our financial flexibility and operational efficiency. Included in these efforts was a workforce reduction action initiated in the third quarter that reduces the number of positions in our organization by almost 20% and saves the company approximately $9 million on an annual basis. We expect to incur a restructuring charge of between $900,000 and $1.2 million in the third quarter to account for the severance and related costs associated with this workforce reduction event. This concludes our prepared remarks. We will now open the call for questions. Operator?