InspireMD Inc Aktie

[ Richard Shima, ] Bank of America. Really excited to introduce InspireMD. We'll have Chief Communication Officer, Shane Gleason coming to give a presentation.

Thank you.

Thank you.

All right. Well, good afternoon, and thanks for having me. There's been a tremendous amount of development in the neuro space in recent years. There have been a number of companies on this stage and ones like it talking about the treatment of stroke, thrombectomy for the treatment of large vessel occlusion in the acute stroke setting. There's now a growing number of companies that are focused on recovery from stroke. We all know that stroke is not just one of the leading causes of death, but also of disability in the U.S. and around the world. But until recently, there has been less focus, less development on the prevention of stroke, specifically prevention of stroke caused by carotid artery disease.

Now if you've ever felt your pulse in your neck, you've been feeling your pulse in your -- in one of your carotid arteries. So 2 carotid arteries, one on either side of your neck are -- they form the primary source of blood supply to the brain. And like blood vessels elsewhere in the body, atherosclerotic disease can build up. But the way it manifests, what we're concerned about in carotid disease is actually different than what we're concerned about elsewhere in the body, where we're talking about coronary disease, peripheral vascular disease, we tend to be concerned about occlusive disease, where there's not enough blood flow getting through to supply the end organ or muscle.

Here, we're worried about something completely different, where the greatest concern with carotid disease is that it's embolic in nature. And that means that the plaque can break off, blow north and cause a stroke, causing one of those large vessel occlusion strokes I mentioned earlier. That's where we come in. So my name is Shane Gleason, I'm the Chief Commercial Officer for InspireMD. And it's my pleasure to represent a very experienced leadership team and organization that exists to develop products and commercialize products for the treatment of carotid disease and the prevention of stroke.

Our flagship product is the CGuard stent. This is not the first carotid stent that was approved in the U.S. That honor goes to the ACCULINK stent from the Guidant Corporation 22 years ago. I launched the second approved stent less than a year later for Abbott and then all the other big cardiovascular companies at the time followed on in the following years, Boston Scientific, Medtronic, Johnson & Johnson. And something all these first-generation stents shared in common was that they're all kind of traditional stent designs, single-layer designs. And we'll come back to it later. But if you look at ours on the left side of the screen, you may be able to notice that there's a finely woven mesh on the outside of our stent.

And when we think about the purpose of a carotid stent stabilizing plaque, preventing it from breaking off, getting through the stent struts and causing a stroke, that has a significant advantage. So I mentioned over 20 years ago was the approval of the first carotid stent in the U.S. And -- but there's still something different about the carotid market than all the other vascular beds in the human body, where from head to toe, cerebral aneurysms, I could include stroke thrombectomy, coronary disease, aortic disease, peripheral vascular disease. Whenever there are approved products and reimbursement and guidelines to support their use, things tend to move pretty quickly from more invasive open surgery to less invasive endovascular procedures.

Again, literally from head to toe, every other -- this is the remaining 2 or 3 inches of artery in the human body that is still surgery first in the U.S., even though products have been out for over 20 years. But that's changing. We can see in 2025, it was about 45% endo. As you'll see on the next slide, if I've shown you this slide 3 years ago, it would have been closer to 30% endo and still 70% surgery. So the winds of change have arrived. They're driving in this direction, and we anticipate that within the next several years, this will be looking like the other markets up to 70% or so endo with room to grow from there. So what gives me this level of confidence? These are actual claims, Medicare, Medicaid claims, and it's a little small on the screen here, but the gray line is surgical procedures. And the green line is stent-based procedures.

There are 2 ways to deliver a stent. We use the acronym CAS for carotid artery stenting and TCAR for transcarotid stenting. I'll talk about that a little bit, but you can see those 3 arrows when coverage expanded for TCAR and then coverage expanded for CAS. And then more recently, there was a large NIH trial, 10 years to enroll, published in New England Journal of Medicine that supports the broader use of stenting. And those 3 tailwinds, you can see the effect it's already had on driving surgical volumes towards stent-based volumes. And we predict that those lines will cross this year.

And again, a few years from now, it will look like all other vascular interventions, again, with room to grow. And you can see the impact that, that has on the addressable market size, bringing it to that next billion dollar market that we were all talking about 20 years ago when we first got into this. But that's still only really the tip of the iceberg. Because the majority of that just is focused on the patients that are getting an intervention today. And there are far more addressable patients out there. With 160,000 or so surgical plus stent-based procedures in the U.S. currently, last year, there are over 1 million diagnosed patients that are untreated, patients with high-grade treatable carotid disease that are not currently being treated.

Again, back to the guidelines and the evidence and the importance of that CREST-2 study that I mentioned that randomized optimal medical therapy against optimal medical therapy plus stenting for those asymptomatic patients and stenting was shown to be statistically -- significantly statistically superior, tongue twister, than drugs alone. So that should continue to drive more of those diagnosed patients who until recently, they're only -- the only thing they could receive was surgery. Now stenting is available and now there's more evidence that stenting those patients will give them better outcomes. So we see a lot of room for this to continue to grow beyond just the fixed number of patients that are being treated today.

So I'm actually going to go forward a slide here. When we look at our strategy at InspireMD, there are really 3 pillars to it. I mentioned that there are 2 different ways to deliver a carotid stent. The first one we call CAS, a traditional stent-based procedure and threaded through a catheter either from the femoral artery or the wrist, the radial artery. Transcarotid, TCAR is a procedure that was popularized by a company called Silk Road later acquired by Boston Scientific. But that's kind of a hybrid procedure where rather than navigating a stent from the periphery someplace, they make a surgical incision at the base of the neck and then insert a stent from there. So it takes a lot of the manipulation out that's required and also the neuroprotection that it provides is very effective.

So on that last chart where I showed the climbing number of stents, you can think of those as being split evenly 50-50 between CAS and TCAR. So we have approaches for both of those. And then finally, getting back to the beginning of stroke prevention, well, as more strokes are being treated, as more companies are focused on bringing thrombectomy tools for those large vessel occlusions, One of the greatest -- one of the leading causes of those large vessel occlusion strokes is the carotid artery. So as neuro interventionalists are intervening on an active stroke, they're frequently encountering carotid disease that they need to figure out what to do with on the spot.

And the neuro community has embraced our stent design as something that is beneficial for patients in that setting as well. So I've talked a little bit about our stent. A picture says a thousand words. There are multiple pictures on the screen. So I'll try to keep up with it. If you look on the left, those are the 5 first-generation stents that were all approved before the year 2010 that are all still available in the market today. And as you can see, they all have varying stent strut designs, but the red circle there shows the size of a piece of debris that could fit through there. And on the right, you have an even [ magnified ] up version of our stent. And you can see a similar open cell design, but the finely woven mesh on the outside that just makes the pore size considerably smaller.

I've used the comparison of -- it's like -- it's almost the difference between a chain length fence and a screen door of keeping flies in or out. So remembering that the job is to stabilize plaque and prevent it from squeezing through the stent struts and breaking off that has obvious advantages. Down below, those are OCT images, optical coherence images, looking through the lumen of the vessel. And if you can see there's kind of a dimple. These are actual human patients imaging, but you can see the kind of dimpling around the stent struts on the left, where you can see that plaque wanting to protrude. And on the right, you can see a much smoother lumen because we have that mesh stabilizing the plaque.

So it seems intuitive. You show this to an operator that does these procedures and they get it. It just should do a better job of stabilizing plaque. One of the great things is that we have a lot of clinical evidence that proves that it does a better job of stabilizing plaque. So we have a 3-trial clinical program in the United States. First one is the C-Guardians trial, 316-patient trial, 1-year follow-up has been published and has led to the first approval in the U.S. for this, where I'll show the data shortly, but the best-in-class outcomes. We have then parlayed that to do C-Guardians II, which is that same stent being used in the TCAR approach with the existing company's neuroprotection system.

And then C-Guardians III, which we're initiating now, C-Guardians II has completed enrollment and has been filed for approval. C-Guardians III is our stent with our own flow reversal kit for the TCAR procedure. So we can capture all the devices used in that procedure, and that's being initiated now. So I mentioned best-in-class data. That's not hyperbole. These are all of the indication trials that have led to approvals for carotid stents in the United States. The only ones not listed are the ones that have since been superseded by a newer trial on that same device. So this is kind of everyone's best work. And in these trials, the trial design is nearly identical in all of them. Similar patient cohorts, symptomatic asymptomatic patients of the same degrees of stenosis, primary clinical endpoint of 30 days safety, death, stroke and heart attack.

And then for efficacy, we go out to 1 year and we add in strokes on the same side, ipsilateral stroke. And as you can see, lower numbers are better here. You'd obviously prefer to have fewer deaths, strokes and heart attacks. And of all the indication trials for any carotid stents that has been approved in the U.S., we had the best 30-day and 1-year results. And in some of the fine print you see at the bottom here, it shows that this is also highly consistent with all of our previously published evidence. One of the nice things about this is that the technology has been available outside of the United States for roughly 10 years. We have over 70,000 patients treated outside of the U.S. and over 1,000 of those in the published peer-reviewed literature.

And again, that around 1% 30-day event rate, around 2% 1-year event rate is consistent with everything we have published in the literature as well. So this isn't just we lucked out on a pivotal trial and outside of the U.S. with all the other evidence is highly consistent. So best-in-class data. This is from the CREST-2 trial. Ours was the only stent. It was intended to use all approved carotid stents and they made an exception. And for the last year or so of the trial, they also included CGuard before it was approved because they thought it bettered the chances of stenting doing well. So ours is the only noncommercially approved stent that was included and about 1/4 of the patients enrolled in the last year received our stent. But what you can see are the lines were through 4 years, meds alone, 6% stroke, stenting plus meds, 2.8%, so highly statistically significant.

And we zoom in on the front end there, and that's to show that very few events, there were 8 events in the perioperative period. None of them happened on the table. None of them happened on day zero. They all happened in that acute phase after the stent has been implanted and something happened, something broke off. So this procedure can now be done very safely, but the stent that you leave behind matters. And that is really looked at by a lot -- by a number of people as evidence of why having our technology is important. So I mentioned TCAR. We recently had presented the first look at our TCAR data. This is the first 36 patients of a 50-patient trial, which we submitted to FDA of our stent with the existing neuroprotection system in the TCAR setting.

And as the physician, Dr. Patrick Muck is the Chief of Vascular Surgery at Good Samaritan Hospital in Cincinnati, when he presented it on kind of the money slide, he said, a bunch of zeros because it was zero death stroke, MI, stent thrombosis, device-related adverse events and getting kind of a deeper look at it, the complexity of the patients that were treated and the acute outcomes were where the real story was. So again, a bunch of zeros on the stuff you want to avoid, but even as you go down a layer, even more compelling evidence. So this is just an illustration of what that procedure looks like where, as I said, an incision is made at the base of the neck. Stent is deployed from a very close distance. And by the way they perform it, they reverse the flow away from the brain during the procedure.

So if anything gets knocked off during the procedure, it's externalized, filtered out, blood is returned to the patient. So they don't have the risks of injury during the procedure. But then, of course, when they're done with the procedure, blood flow is reestablished in its natural direction, the stent you leave behind matters. How you put it in there is no longer having any impact and it's the implant that you leave behind that is the only thing protecting your patient's brain. So final slide here. We are publicly traded, available on NASDAQ under NSPR, and we've been fortunate to have a really strong group of investors that have supported us over the last 3 years or so. Three years ago, we announced a significant financing up to $114 million, including the 4 tranches, 2 of which are yet outstanding tied to time after commercialization and the approval and clearance of our TCAR system.

And then at the time of our first FDA approval last summer, we did a $40 million PIPE. So we are building an organization around this. We've begun to commercialize in the United States. And although our device looks like something that would fit nicely into the bag of a larger organization, we're currently the only stand-alone company entirely focused on the treatment of carotid disease. So we're building a market-leading organization to support what we think is a market-leading stent. And we'll continue -- looking forward to continue to working with current and future investors to do so.

Thanks very much for the time.

Good morning, and welcome to InspireMD's First Quarter 2026 Earnings Conference Call. [Operator Instructions] 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; Mike Lawless, Chief Financial Officer; and Shane Gleason, Chief Commercial 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 information about these risks, please refer to the risk factors described in InspireMD's most recently filed periodic report on Form 10-K and Form 10-Q or any updates in its current report on Form 8-K filed with the U.S. Securities and Exchange Commission and InspireMD's press release that accompanies these calls, particularly the cautionary statements made in it.

During the call today, the company may discuss certain non-GAAP financial measures. For more detailed discussion of these non-GAAP financial measures and historical reconciliations to the most comparable GAAP measures, please refer to the company's earnings release. This call contains time-sensitive information that is accurate only as of today, May 4, 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. Starting with our Q1 results. Our first quarter revenue of $3.4 million was a strong start to 2026, representing growth of over 120%. This performance reflects what we continue to see globally, robust and growing demand for the CGuard implant, driven by its highly differentiated clinical profile and strong physician demand.

Before I go any further, I want to directly address the decision to pause commercialization for the CGuard Prime 135 delivery system, which we announced last week in coordination with the FDA. While we recognize this action represents a clear setback from our commercial momentum in the United States, let me be very clear on 3 important points. First, this action is not related to the safety or performance of the CGuard stent implant, which continues to demonstrate best-in-class clinical outcomes. Second, this was a proactive decision based on feedback from our controlled U.S. launch where we identified opportunities to further enhance the technical performance and physician experience of the delivery system. Third, we are confident this is a temporary and correctable issue, and we have a clear path forward to restoring and expanding our U.S. commercial opportunity. Importantly, this reflects our long-standing philosophy. We prioritize clinical excellence and physician confidence over speed of commercialization. We believe taking this step now ultimately strengthens our long-term market position.

In parallel, we're advancing an important and near-term solution pursuing FDA approval of our original CGuard delivery system that has already been successfully used in more than 70,000 cases globally as well as in the majority of the cases in the successful C-GUARDIANS clinical trial. Our ongoing discussions with FDA are positive and constructive, and we anticipate FDA approval in the third quarter of 2026, which would enable us to reenter the U.S. market with a proven and highly reliable platform. Despite this temporary pause in the United States, the fundamentals of our business remain strong. Strong physician excitement and belief in CGuard, continued strong international growth, our TCAR strategy remains fully on track and unaffected by this voluntary action.

We continue to anticipate FDA approval of the CGuard Prime 80 system for TCAR procedures in the second half of this year, which we believe could potentially double our U.S. addressable market. Furthermore, we are pleased to have received FDA approval to initiate the C-GUARDIANS III clinical trial, which will evaluate the company's next-generation SwitchGuard neuroprotection system with the CGuard Prime 80 for use in TCAR procedures. When approved, this will allow us to offer the full TCAR toolkit. Given the temporary pause in the U.S. commercialization, we have made the decision to withdraw our full year 2026 revenue guidance. We believe this is the most responsible approach while we complete enhancements to the CGuard Prime delivery system and gain more clarity on the specific timing of the approval of our original CGuard platform to our return to the U.S. market.

That said, we remain confident in the long-term growth trajectory of the business. During this period, the entire team remains focused on approval of the original CGuard 135, which is already being reviewed by FDA, approval of the CGuard Prime 80 with the TCAR indication for use with the only currently available neuroprotection system in the market, completion of design changes and approval of our improved CGuard Prime 135 platform, enrollment of the C-GUARDIANS III study for clearance of our next-generation SwitchGuard neuroprotection system for TCAR procedures.

Before closing, let me reiterate the following. We know there is a clear and growing global demand for our CGuard implant as proven in over 70,000 patients to date with unmatched clinical outcomes. We have taken a proactive step to enhance our delivery system in the U.S. We have a clear path to reenter the U.S. market with a commercially proven product and line extension. We believe we have a stent that can and is redefining carotid intervention, and we remain highly confident in our long-term growth plan.

Mike will now talk you through the Q1 results and financial implications of our voluntary field action. Mike?

Thanks, Marvin. For the first quarter of 2026, total revenue was $3.4 million, representing an increase of 122% compared to revenue of $1.5 million for the first quarter of 2025. This growth was driven by the launch of CGuard Prime in the U.S. and increased penetration of international markets with CGuard. U.S. revenue for the first quarter was $1.2 million, driven by the launch of CGuard Prime, representing 36% sequential growth versus the fourth quarter of 2025. Recall that we initiated the controlled commercial launch of CGuard Prime in the third quarter of 2025, so we do not yet have year-over-year performance that we can report for U.S. revenue.

International revenue for the first quarter was $2.2 million, reflecting annual growth of 48% compared to $1.5 million for the first quarter of 2025. The majority of international growth was driven by higher unit sales, while changes in foreign exchange rates contributed growth of 11% to our international results. Gross profit for the first quarter of 2026 was $0.7 million or 20.2% of revenue compared to a gross profit of $0.3 million or 19.1% of revenue for the first quarter of 2025. This increase in gross margin resulted primarily from a favorable shift in revenue mix to U.S. sales, which carry a higher margin than international sales.

Offsetting most of the improvement in the mix in revenue was a $473,000 impairment charge related to excess inventory for which we decided not to extend the useful life. On a non-GAAP basis, which excludes the impact of the impairment charge, adjusted gross profit was $1.2 million or 34.1% of revenue. This adjusted gross margin was below our expectations, primarily due to additional compensation expense for the operations team in Tel Aviv, who maintained operations during a very difficult conditions throughout the recent conflict.

Total operating expenses for the first quarter of 2026 were $14.7 million, an increase of $2.9 million compared to $11.8 million for the first quarter of 2025. This increase was primarily due to higher staffing levels and marketing activities for the U.S. commercial launch of CGuard Prime. Financial income was $289,000, essentially flat compared to $294,000 for the first quarter of 2025. Net loss for the first quarter of 2026 was $13.7 million or $0.16 per basic and diluted share compared to a net loss of $11.2 million or $0.22 per basic and diluted share for the same period of 2025. As of March 31, 2026, cash and cash equivalents and marketable securities were $41.6 million compared to $54.2 million at the end of 2025.

Turning to the impact of the voluntary action of CGuard Prime and the temporary discontinuation of commercial activity in the U.S. The decision to initiate the action took place late last week in consultation with FDA after reviewing the technical performance over the duration of the controlled launch. Consequently, we will recognize the financial impact of the U.S. recall of CGuard Prime in the second quarter of 2026 with a reserve for customer returns of approximately $700,000 and a reserve for inventory impairment and remediation costs of approximately $650,000.

As a result of the impact of the temporary discontinuation of commercial activity in the U.S. following the action, we withdrew our prior full year 2026 revenue guidance, at least until the expected FDA approval of our original CGuard stent delivery system, which we believe will take place in the third quarter of 2026. Until expected FDA approval of the original CGuard stent system, we expect to have no commercial activity in the U.S. market and our source of revenue during that time will be sales of the CGuard system in international markets. Given the strong U.S. market receptivity to the CGuard stent despite the deployment issues of the Prime delivery system, we expect the U.S. customer response to the introduction of the original CGuard system to be very positive following the anticipated FDA approval. This concludes our prepared remarks.

We will now open the call for questions. For the Q&A segment, we will be joined by Shane Gleason, InspireMD's Chief Commercial Officer. Operator?

[Operator Instructions] Our first question today will be coming from the line of Frank Takkinen of Lake Street Capital Markets.

I wanted to start with just some clarification around the process to get CGuard Prime back on the market. Where do you stand in resolving the challenges internally? When can that be complete? And then when can that get resubmitted? And then given the product has been on the market, is there any chance for some sort of expedited review with the FDA to get that on market as soon as possible to meet your first half '27 deadline?

Frank, thanks for the question. We appreciate it. We have already begun a very extensive process in remediating some of these technical challenges for the delivery system. We've identified those early on. We understand the root cause. We've already taken action to solve those. It's now a matter of completing the V&V testing and all of the associated work to get that done and get that resubmitted to FDA. The time line for approval of those changes remains somewhat uncertain, whether it remains in the statutory category of the design change or expedited is still to be determined. Those 2 time frames are different, obviously.

But in terms of our confidence in understanding the problem and having solved the issue technically, we have a very clear understanding of that and have already made all the progressive steps to be very confident that this design change will work and will work much better and give us the technical response that we're looking for. At the end of the day, we want a reproducible success in the delivery system and a delivery system candidly, that's worthy of the best-in-class implant that we know that we have in the market. So we're very encouraged and optimistic that we'll be able to deliver this in early 2027 or sooner.

Got it. Very helpful. And then with the legacy delivery system working through the approval process, how quickly can you relaunch the new delivery system in relation to maybe VAC committees, scaling up manufacturing capacity. Once you do get that approval in hand, how quickly could we start to see that revenue come back?

Yes, Frank, our expectation is that once we have approval, we will be ready and set to launch the original CGuard. As you know, this product is the one that we sell outside the U.S. So we're full steam ahead on manufacturing capacity. There's no limitations to speak of there. Shane and the team will be working over the next 90 days or so to continue to work through the accounts. We've opened all of the VAC-related topics and really put a very clear plan together as to how we can relaunch as quickly as possible. But there are no constraints at this point other than getting the approval completed, which we anticipate to be in the August window.

Okay. That's helpful. And then maybe just one last one, and I appreciate all the time. As you work through this transition period, how should we think about OpEx trending through this time? And then as it relates to OpEx, just maybe talk about retaining key talent through this transit period.

Mike, do you want to take that one?

Yes, sure. Yes. So I think we expect to see OpEx continue to increase slightly as we move through the year. We will be making investments in R&D with the C-GUARDIANS III clinical trial kicking off very soon. There will be some increased expenditures in R&D as a result of that. As far as selling and marketing and G&A go, I would expect those to be relatively stable. I think we're going to probably put a pause on in terms of headcount investment until we have a little more clarity about the time line for FDA approval for CGuard. So I think that's the general path you should expect to see with OpEx.

And our next question will be coming from the line of Adam Maeder of Piper Sandler.

I actually wanted to pick up on one of the questions that Frank just asked around VACs. So I just wanted to confirm the existing customer base, the users of CGuard Prime, those centers should be grandfathered in with the CGuard original delivery system. So you can hit the ground running immediately upon FDA clearance. Did I hear that correctly, Marvin?

Yes. Why don't we have Shane maybe clarify that point because he's been working through that with the team.

Yes, happy to. I think the short answer is this is one of those where all-politics-is-local applies, but that's something that our team in the field is staying close to. And you're exactly right. In a lot of those cases, what they really approved is the stent. And you can probably imagine that the team has been out there having a lot of conversations over the last couple of working days here. And what we're hearing is that they -- many of them don't want to lose access today, and all of them are looking forward to gaining access as soon as it's available. So there will be -- the process will look a little bit different at each and every center like it does just for the VAC process in general, but we expect the receptivity to be able to plug right back in.

Okay. I appreciate the color, Shane. And I guess it's a related question. But as you think about any potential impacts to prospective customers, while you don't have a delivery system, while you're not selling into the U.S. market, are you able to advance those conversations with prospective accounts? Or does this also kind of put a temporary moratorium on that process?

Yes. I think there's -- probably the best way to put it is that there are some things that you can discuss and others you can't. Clinical data results, those are things that are fair game, specific price list, things like that are things that you can't do until you have that -- until you have CGuard, for example, or CGuard Prime and the 80 shaft approved. But we can remain engaged and again, kind of follow the rules of each site that we have and continue to engage with the customers that way.

From talking to the physicians and centers that we have, they kind of fall into really 1 of 2 different buckets. One is they're disappointed to be losing access to what they have today, and they'll welcome it back as soon as they can get it. And the other one is those who understand, who may have had challenges and are looking forward to getting a more reliable system. So in both of those cases, there's a lot of receptivity to bringing us in, whether they've started using us or not at this point when we get those other products available.

Adam, let me just add one quick comment to your question there and Shane's answer. Although the launch of CGuard Prime was controlled to a certain extent, our marketing of that device was very broad and quite aggressive. I think that the market, in general, understands the value of the CGuard implant. And so on balance, I think over the last several months, we've created a tremendous amount of interest and demand. So although we'll be limited in our ability to sell the product, I think that awareness is clearly going to create a tailwind once we get back in the market with CGuard first and then CGuard Prime. And also remember that the CGuard device was used in the majority of the C-GUARDIANS PMA trial. So we have a lot of familiarity out there within the investigator base that participated in that.

[Operator Instructions] And our next question is coming from the line of Anthony Vendetti of Maximum Group (sic) [ Maxim Group ].

Yes, I was just wondering, Marvin, if you could talk a little bit about the decision to voluntarily do the recall here in the U.S. And then the effect, if any, on the European business, do you expect business to slow down there based on this voluntary recall? And then as you work with the FDA, do you anticipate any potential labeling changes? Or do you think that's really not going to be the issue at this point? Or is it too early to tell?

Yes. Thanks, Anthony. Let's start with the OUS market. As you can see from the results in the first quarter, the OUS market is actually standardized in using our original CGuard delivery system, and that business continues to grow nicely and the demand is clear that in the OUS market as we have continued to mature over the years, we're growing nice share there. So the OUS market will continue to operate and we'll count on that to be a robust part of the overall story.

The decision that we made really, we felt was necessary both in the short and long term to achieving our objective. You can't lead in a market of this size, scale and transition without 100% confidence in both the implant and the delivery system. And as I said before, we absolutely are committed to having a delivery system that's worthy of these best-in-class implant results of CGuard. So as much as these decisions are somewhat difficult to make, we felt that this was the right time to make it so that we can move forward in an unencumbered way of taking advantage of a market shift candidly to stenting that has been on the docket for the last 20 years, and we find ourselves in a very unique position of being able to take full advantage of that.

But we wanted the complete story to be able to do that. And we feel very good about our TCAR entry with the short shaft indicated CGuard for TCAR procedures and starting our SwitchGuard neuroprotection study shortly. As far as changes are concerned, these are simply design and technical changes. There will be no changes to speak of in terms of the use of the product, IFU and otherwise. And as I've said before, we have a very clear understanding of what needs to be done. We're confident we can expedite that quickly and get that into the FDA so that we can get things back on track.

In the interim, we will utilize CGuard and then have CGuard Prime back in the market in both the 135 and the 80.

Okay. Great. Maybe just lastly on the -- as you were doing the sort of rollout and testing, were there not -- I guess it was maybe too early to tell. But clearly, I guess, these issues with the delivery system weren't or didn't manifest itself early on, but now it's become an issue in terms of just like you said, complaints in terms of comfort, but not in terms of your system, but the delivery system. Why do you think it wasn't picked up earlier? Maybe just a little color on that.

Yes. Anthony, it's a good question. We had limited user experience in the PMA trial. We put CGuard Prime into that fairly late in the process. And once we began to launch this into a broader market, the combination of new user experiences, the combination of a lot of different accessory devices being used with CGuard Prime just lend itself to a learning curve that we had to appreciate once we had this product fully engaged in the market, and that's why we did a controlled launch to begin with to keep very close to the -- those details.

So I think the learning curve was somewhat unfortunate, but I think we got ahead of it early. We understood the core issue and knew what to do to address it. Unfortunately, we've had to take a pause here for a 90- or 100-day window in order to get things put together properly. But we felt like under the circumstances, this was the right thing to do so that we can come out of the blocks on the other side of this in a very clear way to continue to grow share.

And there are no more questions in the queue. I would like to go ahead and turn the call back over to management for closing remarks. Please go ahead.

Thank you very much. I'd like to thank everyone for joining today's call and the continued support in our mission to lead and transform the carotid interventional market and stroke prevention. We look forward to a lot of success over the next couple of quarters. Thanks very much.

This does conclude today's program. Thank you for joining. You may now disconnect.

Good morning, and welcome to InspireMD's Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] This call is being recorded for replay purposes.

I would now like to turn the call over to Webb Campbell from Gilmartin Group for introductory disclosures.

Thank you for joining us for the InspireMD Fourth Quarter and Full Year 2025 Conference Call. Joining us today from InspireMD are Marvin Slosman, Chief Executive Officer; and Mike Lawless, Chief Financial Officer; and Shane Gleason, Chief Commercial 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.

For more information about these risks, please refer to the risk factors described in InspireMD's most recently filed periodic report on Form 10-K and Form 10-Q or any updates in its current report on Form 8-K 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.

This call contains time-sensitive information that is accurate only as of today, March 18, 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, and good morning, everyone. As I reflect on our performance over the past several quarters, I'm extremely proud of our team here at InspireMD and enthusiastic about the impact we are having on stroke prevention and the future of an endovascular standard of care, catalyzed by our breakthrough CGuard Prime carotid stent platform.

Through the CGUARDIANS FDA clinical trial, along with our numerous multiyear studies of our CGuard implant, we have demonstrated unmatched clinical evidence reflected in the lowest adverse event rates and most durable stroke prevention, enabling our continued focus on achieving market leadership through a stent-first strategy.

Becoming #1 in this highly competitive market will require strong operational, commercial and customer-focused excellence throughout our organization. To this end, we are focusing on operational expansion, establishing U.S.-based production, increasing our manufacturing capacity to keep pace with this growing U.S. demand.

On the commercial side, we're building our coverage capacity and procedural support bandwidth. Since our approval in June 2025, we have architected, implemented and now accelerated the foundational requirements to deliver commercial sales in the U.S. market through VAC initiations and approvals, contract implementation, case completions and reorders, all building in our mission to dominate this space with our next-generation stent.

Thus far, we are pleased with the physician support and pace toward these fundamental operational milestones, getting products on shelves and available to meet market demand. We met our 2025 objectives of building our U.S. commercial team to north of 30 people with the majority in the field, as we previously shared.

We have now completed over 500 cases, gained approvals in some of the most prominent IDNs in the United States and established ourselves as the go-to device for many physicians who now have access to CGuard Prime. We remain committed to supporting the success of every procedure with strong case support and continuous improvement with the ease of use of our products.

As I've stated previously, we have real-world experience with the CGuard stent in over 70,000 cases in our 30 OUS markets to date, which we are leveraging in our launch. As we have executed on our controlled rollout, we have observed opportunities to improve our delivery systems' technical success and enhance ease of use. We understand what is required to exceed our customer expectations, and we plan to introduce these improvements beginning in the fourth quarter.

Now to our clinical pipeline and advanced indications for our CGuard implant, a critical piece of our long-term growth strategy. We continue to build on multiple programs in clinical studies as we work to expand the reach of our technology by leveraging clinical evidence, potentially unlocking additional market opportunities.

Starting in TCAR with C-GUARDIANS II, evaluating CGuard Prime in a shorter delivery system, purpose-built for use in TCAR procedures and designed to be compatible with neuroprotection systems that are already in use in the market.

I'm pleased to report that we have completed enrollment in this trial and submitted the request for approval to FDA, anticipating potential approval in Q3. This indication will boost our market opportunity for stent sales into the more than 35,000 current TCAR procedures annually.

Simultaneously, we are rapidly advancing CGUARDIANS III, the next phase of our TCAR strategy, evaluating our fully integrated TCAR solution, combining the CGuard Prime 80 stent with our proprietary SwitchGuard Neuroprotection System. This study is designed to showcase the full potential of our purpose-built solution for TCAR, offering physicians a comprehensive, streamlined option that we believe can set a new standard in the field. We plan to begin enrollment in this study in Q2 with expected FDA clearance and launch in the second half of 2027.

To recap expectations for 2026, we will deliver extraordinary quality and exceed expectations for our growing range of customers, build a sustainable foundation from which we can expand stenting market, utilize the CGuard's stent-first strategy to differentiate superior outcomes, serve the entirety of the market for all specialists treating carotid disease, boldly build a market-leading company worthy of lofty expectations from our customers and patients who benefit from our breakthrough technology.

Finally, I would like to thank our entire team for their extraordinary commitment to our success, and I look forward to continuing to build our organizational strength with deep talent and expertise to advance our mission to prevent strokes and save lives. I'm incredibly excited about our future and look forward to sharing our progress over the coming year.

Now I'll turn the call over to Mike to walk us through the financials. Mike?

Thanks, Marvin. For the fourth quarter of 2025, total revenue was $3.1 million, an increase of 62% compared to revenue of $1.9 million for the fourth quarter of 2024. This growth was driven by the launch of CGuard Prime in the U.S. and increased penetration of international markets with CGuard.

U.S. revenue for the fourth quarter was $866,000, driven by the launch of CGuard Prime, representing 74% sequential growth versus the results of the third quarter. We are pleased with the trajectory of U.S. launch and anticipate continued progress in 2026.

International revenue for the fourth quarter was $2.3 million, reflecting growth of 17% compared to $1.9 million for the fourth quarter of 2024. The majority of the international growth was driven by higher unit sales, while changes in foreign exchange rates contributed growth of about 7% to our international results.

Gross profit for the fourth quarter of 2025 was $1.2 million or 37.5% of revenue compared to gross profit of $469,000 or 24.1% of revenue for the fourth quarter of 2024. This increase in gross margin resulted primarily from a favorable shift in revenue mix to U.S. sales, which carry a substantially higher margin than international sales. Our sales in the U.S. generated gross margins of about 70%, reflecting the strong pricing and value that we bring to our customers.

Total operating expenses for the fourth quarter of 2025 were $13.3 million, an increase of $3.4 million compared to $9.8 million for the fourth quarter of 2024. This increase was primarily due to higher commercial staffing levels and marketing activities for the U.S. commercial launch of CGuard Prime.

Financial income was $386,000, an increase of $134,000 compared to $252,000 for the fourth quarter of 2024, resulting from the increase in financial income from investments in marketable securities and money market funds.

Net loss for the fourth quarter of 2025 was $11.8 million or $0.14 per basic and diluted share compared to a net loss of $9.2 million or $0.19 per basic and diluted share for the same period of 2024.

As of December 31, 2025, cash and cash equivalents and marketable securities were $54.2 million compared to $34.6 million at the end of the prior year. As a reminder, we have 2 remaining milestone-based tranches pursuant to the private placement we closed in May of 2023. Each tranche provides gross proceeds of $17.9 million if fully exercised, and the remaining tranches are triggered by future milestone events.

First, the completion of 4 quarters of commercial sales of CGuard Prime in the U.S., which we anticipate in the second half of 2026; and second, the completion of both the receipt of FDA approval for the TCAR indicated CGuard Prime stent, which we expect in the third quarter of 2026, and the FDA clearance of the SwitchGuard TCAR Neuroprotection System, which we expect in the second half of 2027.

Turning to our 2026 outlook. InspireMD expects revenue for the full year 2026 to be in the range of $13 million to $15 million, reflecting growth of approximately 45% to 65% over full year 2025. We expect increasing sequential revenue growth in the second half of 2026 as our business gains momentum and U.S. sales growth accelerates from the anticipated label expansion by the FDA for the use of CGuard Prime in TCAR procedures and the introduction of the enhanced delivery system for CGuard Prime for use in CAS procedures.

This concludes our prepared remarks. We will now open the call for questions. For the Q&A segment, we will be joined by Shane Gleason, InspireMD's Chief Commercial Officer. Operator?

[Operator Instructions] Our first question coming from the line of Adam Maeder with Piper Sandler.

Congrats on all the progress. A couple for me today, if that's okay. And maybe we could start on the guidance front. Mike, just trying to get a better understanding of the construction of the guidance that you put out for FY '26.

Maybe you could kind of double-click on that, help us think through U.S., the U.S. business versus OUS. And then with the CGuard Prime integration into the Boston Silk Road system, what's kind of contemplated in the guidance from that new product launch? And then I had a couple of follow-ups.

Adam, thanks for the question. So first of all, for the OUS sales, we're continuing to expect sales that are in the range of what we've been able to perform in the last several quarters with some maybe some moderate growth there. So continued growing penetration of OUS markets.

And then on the U.S. side, we're going to continue to sustain our controlled launch phase at this stage. So that would mean somewhat moderated growth in the U.S. for the first half.

And then as we have those catalysts kicking in, in the second half, we would see some acceleration of the growth as a result of the anticipated TCAR indication, the anticipated enhanced clinical performance of the CGuard Prime for CAS, and then finally, just the maturing of approvals and contracts as we work through the VAC approval process.

That's helpful. I appreciate the color. And maybe a good segue into the next question, which is hoping for an update on kind of exactly where you stand from an account standpoint in the U.S. So looking for metrics like number of accounts, number of VACs that are in process, just trying to kind of take the temperature there, even if it's not explicit, just hoping to get kind of some broad strokes color around how that's progressing.

Yes. Adam, it's Marvin. I might hand that one off to Shane just to provide a little bit of color on that topic. Shane, if you don't mind grabbing that question.

Sure. So the questions around accounts and penetration, so we have done cases in -- and these are to date, not capped at Q4, but we've done cases in roughly 80 centers. And as we've mentioned, the VAC processes before, those are frequently not linear.

So in some cases, there are evaluation cases before VAC approval. Sometimes the VAC approval has to happen before the first case can be performed. So that's kind of a mix of those, but 80-plus centers have done cases at this point, and tracking the number that are in our pipeline, there are north of 200 centers in the pipeline of -- between VAC and evaluation stage.

So the team has been able to produce quite a lot of momentum. We have a lot in the funnel and the job is to drive them through the funnel and make them active ongoing customers from here.

Great. Very helpful color, Shane. I appreciate all that. And sorry, I know I'm asking a bunch of questions today. Just wanted to tick through some of these.

Next, on the next-gen delivery system and enhanced ease of use. It sounds like you're targeting that for Q4 of this year. My takeaway there is that this is kind of opportunistic. It's an opportunity to make a great product even better versus like a pressure point or consternation from docs.

But I wanted to confirm that is correct. And then what is needed from a regulatory standpoint to get the next-gen delivery system across the goal line?

Yes, Adam, thanks for that question. You're absolutely correct in your assumption there. Our CGuard stent is performing extraordinarily well as anticipated and consistent with all the work that we've done with 70,000-plus implants to date.

When we launched the CGuard Prime with this differentiated new delivery system, we did so in a controlled manner to ensure that we're able to manage first use of this device in a market with new users unfamiliar with the delivery system and platform.

So we intentionally sought feedback looking for areas to discover and improve, like all good companies do, and we'll continue to iterate and improve off of that feedback to ensure we're delivering these world-class technical success results to meet these -- the leadership goals for the company.

So I think you're absolutely correct about your assumptions. And these fall into that continuous improvement approach that we'll continue to take.

As far as submission is concerned, these are relatively minor changes, and we'll go to FDA in a 30-day review. So I think we're always looking for those opportunities to build more confidence into the delivery side of the device itself, but the implant is performing exactly according to plan.

Okay. Perfect. And if I could just ask one last one, I promise, I'll jump back in the queue. Just was hoping to better understand timing for the C-GUARDIANS II data specifically, when will we see that -- the data from that study as well as the CGuard cohort data from the CREST-2 trial. Just when should we expect those?

Yes, Shane, do you want to grab that one? I think you're probably latest up to date on the data.

Sure. So we have a slot that's been accepted at the Charing Cross Congress in the back half of April. That will be the first reveal of C-GUARDIANS II data. That will likely be the interim cut of the data, but it will be the first time that we see any of the clinical data from that trial.

Our next question coming from the line of Frank Takkinen with Lake Street Capital Markets.

Congrats on all the progress. I was hoping to start with a question around really account adoption and productivity metrics. So maybe first part of that, maybe any anecdotal patterns you can share when account does activate with CGuard, how are they first using the product? And have you seen any of your accounts really shift over to being an exclusive CGuard user?

And then from a productivity standpoint, how should we think about how many accounts a rep can manage and maybe how many -- what peak productivity per account can look like over time?

Shane, do you want to grab that one, first part of it, and I can follow up?

Sure. Yes. So we have seen adoption. And I think the one thing that's important to our strategy is we know we have a premium product. We have priced it at a premium, but not at such a premium that we want it relegated to only be used in the most challenging cases.

So our goal is to be able to become the everyday stent of the people who use it. And of those docs who have made it through the evaluation stage, we do have a growing number who are using it as their everyday stent. So that's the goal.

When you look at what physicians perform, "the average" if you look at the number of procedures being performed and the number of physicians performing them, the average is somewhere in the neighborhood of 15 to maybe approaching 20 cases a year. So we really look at it more as how many cases can a rep support versus how many doctors or accounts can they support.

So if the average physician does, by those numbers, 1 or 2 a month, if they're on the same day, you can cover them more efficiently than if they're spread out on separate days. So there's 20-plus selling days most months and our reps' goals are to be in cases darn near every working day and hopefully multiple cases in the same day. So we've got a lot of room to expand. And from there, it's just logistics.

Yes, Frank, let me expand on that a little bit as well. So we're taking a very deliberate approach to measuring productivity in the field as we build our commercial organization. We use a lot of claims data to measure and monitor that.

So I think it's safe to assume that we're going to continue to be present in these cases to make sure that the experiences are those that we expect, and we'll be prepared to expand as we get to a productivity curve that looks to be reasonable as we need to grow the organization and build it out. But so far, we've been very pleased with that productivity ramp and we'll continue to watch that closely.

Very helpful. And then maybe following up on some of the points made in there. Appreciating case support is extremely important in the early days. Do you envision over a longer period of time, this is a product that can be on the shelf and just be the de facto stent that is used and not necessarily requiring rep support in every single case at a more mature state of the company?

Absolutely. Yes, I think there are different -- there are slightly different expectations in the market for when we get into the TCAR space, a higher percentage of those cases are supported by industry representatives than there are for the CAS cases.

So we have a kind of model by specialty of what our expectations are. But absolutely, the goal is once someone is comfortable with the device to be able to have them have it on their shelf and use it when we're not around. We still like to be there to provide support, but we don't need to be the rate-limiting item there once physicians gain comfort with the system.

Perfect. And then the last one, any refresher you guys can provide on sales force hiring cadence would be great color.

Shane, do you want to grab that?

I can take it. So thanks, as the guys mentioned in the prepared remarks, we had last stated that our goal was to get to north of 30 people in the U.S. commercial organization by the end of the year with the majority in the field. We reached that.

And at this point, our goal is to continue hiring opportunistically and selectively where we need increased penetration, where we need more support. But by and large, at this point, this is the group that's going to launch our first indication.

Let this group kind of set down their roots, make their ways through those value analysis committees and processes. And then as we start to layer in additional indications when TCAR comes along, we expect that we'll probably pick that hiring back up.

But our first goal was to get a somewhat uniform coverage of the major markets and let that group throw their roots down and climb that productivity curve that we've mentioned a few times now.

Our next question in queue coming from the line of Jeremy Pearlman with Maxim Group.

First one regarding your limited or as you called it, the commercial rollout. Is that -- the 200 centers that you said are in the pipeline, is that still part of this controlled launch? Or does that already now bleed into a broader commercial U.S. launch? And then maybe talk about what time line could we expect for that broader U.S. commercial launch?

Yes, Jeremy, let me grab the first part of that, and then Shane can add. I just want to make sure we clarify the nomenclature. It's not a limited launch. It's a controlled launch. So we're being very prescriptive about how we go about doing it, but growth is still the driver. And we will continue to build our pipeline and support cases with the objective of growing the business.

So that's a key differentiation. I just wanted to clarify there. We want to make sure that all these experiences that these physicians have with this new device are ones that build a sustainable model for the long term.

So we will continue to build off of that, and we'll continue to grow the pipeline of opportunities. And with this new indication coming in the second half of the year with TCAR, we'll certainly launch that as aggressively as possible as well.

Shane, I didn't know if you had any additional comments to that or not for Jeremy?

Yes, that's really well said, Marvin. I think just a couple of additional points. One is when we look at the progress we've made, and I've mentioned the size of the sales organization, it's important to remember that roughly half of our territory managers started in Q4.

So we had a group that was on board when we got approval last summer, but really half of our organization has been out there for a quarter. So we always talk about how these Value Analysis Committees tend to -- and contracts tend to measure their time lines in quarters, not months.

So we don't work on things in serial or in series where you work on one until it's complete and then you start the next one. You get a whole lot of them moving at once in parallel, and they start to come to fruition on their own time schedules as we drive them through.

So to your question of where does the controlled launch end and all systems go full bore launch pick up, many of those accounts that are in the pipeline now will be feeding into that full launch. So really well stated.

Okay. Understood. And then maybe any feedback you could share from the vascular surgeons? I know we've talked about in the past you have about shifting the whole market to a stent-first approach. The physicians that have adopted the CGuard Prime platform, have they echoed that sentiment that they see this as being now the first line of care?

Yes. Jeremy, let me grab the first part of that. Shane can jump in here as well. I think that the enthusiasm across the board, no matter what subspecialty, for a new innovative technology with these kinds of outcomes that are evidenced with the data that we have is just truly palpable. It's consistent across the board that this market has been looking for a new technology to advance an endovascular-first approach to carotid stenting regardless of specialty.

But the feedback through the TCAR trial with the use of CGuard Prime has reiterated that to us, and we continue to have incredible enthusiasm on the part of all subspecialists, but in particular, the vascular surgeons are very keen on having an alternative to what up to this point has been only one device, 20-year-old device available to them. So it's really encouraging, and we're looking forward to taking advantage of the moment.

Shane, anything from you there?

No, nothing to add.

Thanks, Jeremy. I'd like to thank everyone for joining today's call and for the continued support of our mission to lead and transform the carotid intervention market.

CGuard is redefining outcomes for patients and their providers by lowering risk of stroke and other major adverse events to levels never achieved with first-generation stenting surgery or medical therapy alone, validated with rigorous evidence, proven clinical results, reimbursement and real-world outcomes.

We're very excited for what the future has to hold for InspireMD. Thanks for joining the call today.

This concludes today's conference call. Thank you for your participation, and you may now disconnect.

Good morning, and welcome to InspireMD Third Quarter 2025 Earnings Conference Call. [Operator Instructions]

As a reminder, this call is being recorded for replay purposes.

I would now like to turn the call over to Web Campbell from Gilmartin Group for introductory disclosures. Please go ahead.

Thank you for joining us for the InspireMD Third Quarter 2025 Conference Call. Joining us today from InspireMD are Marvin Slosman, Chief Executive Officer; Mike Lawless, Chief Financial Officer; and Shane Gleason, Chief Commercial 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. For more information about these risks, please refer to the risk factors described in InspireMD's most recently filed periodic report on Form 10-K and Form 10-Q or any updates in its current reports on Form 8-K 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.

This call contains time-sensitive information that is accurate only as of today, November 4, 2025. 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, and good morning, everyone. I'm pleased to welcome you to today's call. Joining me on the line is Mike Lawless, our Chief Financial Officer; and Shane Gleason, our Chief Commercial Officer. We are dialed in live from VIVA, the Vascular InterVentional Advances Conference in Las Vegas, where we're hosting many conversations on the introduction of CGuard Prime following our approval in June. I will share more on our market traction shortly, but I want to start with a detailed overview of the results of the third quarter.

I'm happy to share that our business is advancing with velocity and intention. In the third quarter, we reached $2.5 million in total revenue, representing year-over-year growth of 39% and sequential growth of over 40% since the last quarter. Our growth was driven by strong early momentum in the U.S. and continued demand for our CGuard stent platform internationally. Our strong performance was a result of months of significant internal preparation, which positioned us to hit the ground running upon the FDA approval. Following approval, which we received in late June, our team immediately activated our planned commercial efforts in the United States in July. When we say commercial activation, we mean a focused and deliberate effort to make sure that our device is accessible to U.S. providers and their patients who are at risk of stroke.

Our team has been engaged with many physicians and hospital systems and are working through value analysis committee approvals, contract completions and case initiation. We are building traction methodically with the goal to drive sustainable penetration and growth in the market. Demand for CGuard Prime has been strong. As of today, we've completed more than 100 cases in the U.S., and many of these procedures were performed within some of the largest IDNs in the country. The demand and excitement for our technology reflects the foundational work we've done over the years, establishing value and awareness for our best-in-class clinical results.

Globally, we are now approaching 70,000 stents sold to date as the carotid interventional market shifts to a stent-first approach. We believe the established CMS reimbursement, combined with our innovative protective mesh stent design, evidence and real-world experience provide a pathway for us to lead the carotid market. We are equipped with high-caliber sales leadership and clinical support, reflected in the remarkable progress our group has made in just a few months post FDA approval. Their deep experience in vascular market and established relationships with physicians and administrators combined with a best-in-class implant forms the backbone of our early and progressive success.

The team is tasked with our commitment to expanding treatment to the vast patient population who could benefit from our technology. As a reminder, over 3 million people globally are diagnosed with carotid artery disease, yet only approximately 400,000 are treated annually. This massive gap in treatment leaves patients vulnerable to catastrophic stroke events. CGuard Prime aims to redefine success for these patients and their providers by lowering the risk of strokes and other major adverse events to levels never achieved with first-generation stenting or surgery, validated with rigorous evidence, proven clinical results, reimbursement and real-world outcomes. As I mentioned earlier, we are living the excitement of our technology firsthand here at VIVA. Today, we are here in Las Vegas with many members of our team and Board of Directors, engaging with our physician partners and champions as we continue to launch CGuard Prime in the U.S. The energy of our commercial-facing teams and the unmistakable momentum around endovascular intervention gives me incredible optimism for the future of our company.

Before I provide a detailed update on our clinical trial work, I wanted to take a moment to welcome our new Chief Medical Officer, Dr. Peter Soukas. Dr. Soukas will oversee clinical and medical topics, further building on our best-in-class data as well as advancing awareness of our technology stent platform to the physician community. This transformational time for carotid intervention requires continually building a world-class team and support, and Dr. Soukas will be a tremendous contributor to our work ahead. We're thrilled to have Dr. Soukas join as our CMO.

Now to the clinical pipeline, a critical piece of our long-term growth strategy. We continue to advance multiple programs in clinical studies as we work to expand our reach of our technology by building clinical evidence, potentially unlocking additional market opportunities. Starting in TCAR with C-GUARDIANS II, which evaluates a short TCAR-indicated version of CGuard Prime designed to be compatible with neuroprotection systems that are already in use in the field today. I'm pleased to report that we are on track to complete enrollment by the end of the year and potential approval anticipated in mid-2026. Simultaneously, we're advancing C-GUARDIANS III, the next phase of our TCAR strategy, evaluating our fully integrated TCAR solution, combining the CGuard Prime 80 stent with our proprietary SwitchGuard neuroprotection system.

This study is designed to showcase the full potential of our purpose-built solution for TCAR, offering physicians a comprehensive streamlined option that we believe can set a new standard in the field. We currently expect FDA clearance and launch in mid-2027. The impact of these 2 studies highlights the versatility and clinical value of our platform and are expected to give us extremely competitive position in TCAR, a U.S. market that already exceeds 30,000 procedures annually. We also continue to make progress on our tandem lesion early feasibility study to expand the potential use of our technology in acute stroke care. The study is being conducted in partnership with Dr. Adnan Siddiqui and the Jacobs Institute in Buffalo, New York. This study evaluates the use of CGuard Prime in acute stroke patients with tandem lesions in conjunction with thrombectomy.

I'm happy to share that enrollment is over 50% complete. It is inspiring to hear physicians' excitement for having an option to treat this critical need with our technology in a challenging patient population. Let me also mention our awareness of the upcoming CREST-2 data that's scheduled to be presented at the VIIF and SVIN meetings in the coming weeks. We believe the culmination and sharing of this data is another reminder of the advancement of awareness of carotid intervention and the importance of decoupling categories of therapy with specific implant-based performance to demonstrate the specificity and granularity of results.

Clinical outcomes have been redefined with best-in-class evidence with CGuard implant across a large population sample of both symptomatic and asymptomatic patient cohorts measured in both short- and long-term outcomes. The baseline of nearly 70,000 implants sold and 2,000 patients studied and peer reviewed to date speaks volumes to the validation of our exceptional results. Our strong performance in the third quarter, combined with the establishment of a robust commercial foundation gives me tremendous confidence in our ability to deliver meaningful growth and value over the coming quarters and years.

Now I'll turn the call over to Mike to walk us through the financials. Mike?

Thanks, Marvin. For the third quarter of 2025, total revenue increased by 39% to $2.5 million. This increase was predominantly driven by the launch of CGuard Prime in the U.S., increased penetration of international markets with CGuard and the favorable impact of foreign exchange. U.S. revenue for the third quarter was $497,000, driven by the launch of CGuard Prime. This is the first quarter we recorded U.S. commercial revenue following the FDA approval in late June. International revenue for the third quarter was $2.0 million, an increase of $223,000 or 12% compared to $1.8 million for the third quarter of 2024, driven by increased usage in over 30 markets and the favorable impact of foreign exchange.

Gross profit for the third quarter of 2025 increased by $450,000 or over 100% to $864,000 compared to gross profit of $414,000 for the third quarter of 2024. This increase in gross profit resulted from higher revenue and a favorable shift in sales mix towards higher-margin revenue from our commercial launch in the U.S., partially offset by higher production variances and training costs. Gross margin increased to 34.2% of revenue during the third quarter of 2025, up from 22.9% of revenue during the third quarter of 2024, driven primarily by the previously discussed favorable revenue mix and volume leverage of fixed operating costs.

We expect continued expansion of gross margins in future quarters as our commercial sales ramp in the U.S. drives continued favorable mix and volume leverage. Total operating expenses for the third quarter of 2025 were $13.9 million, an increase of $5.0 million or 57% compared to $8.9 million for the third quarter of 2024. This increase was primarily due to higher headcount-related expenses as we continue to expand our U.S. personnel, particularly our commercial team to drive the U.S. commercial launch of CGuard Prime. A second driver of the increase in operating expenses was occupancy and infrastructure expense related to the establishment of our U.S. headquarters.

Financial income decreased by $229,000 to $343,000 from $572,000 in the third quarter of 2024. This decrease was primarily due to $118,000 decrease in financial income from investments in marketable securities and money market funds and a $104,000 increase in financial expenses related to changes in exchange rates. Net loss for the third quarter of 2025 was $12.7 million or $0.17 per basic and diluted share compared to a net loss of $7.9 million or $0.16 per basic and diluted share for the same period in 2024. As of September 30, 2025, cash and cash equivalents and marketable securities were $63.4 million compared to $19.4 million as of June 30, 2025. The increase in cash resources is a result of 2 financing events with significant impact during Q3.

First, we raised gross proceeds of $40.1 million through a PIPE offering with existing and new investors. Second, we raised gross proceeds of $17.9 million from the exercise of the second of 4 milestone-based financing tranches pursuant to our May 2023 equity private placement. The exercise of the warrants was triggered by the receipt of premarket approval from FDA for our CGuard Prime carotid stent. The 2 remaining tranches are triggered by future milestone events, including: first, the completion of 4 quarters of commercial sales of CGuard Prime in the U.S., which we anticipate in the back half of 2026; and second, receipt of FDA clearance for the SwitchGuard TCAR neuroprotection system, along with TCAR indicated CGuard Prime stent, which we expect during 2027.

So turning to our financial outlook. We're encouraged by the initial traction for sales of CGuard Prime in the U.S. and the continuing solid performance of CGuard internationally. For the fourth quarter, we expect sequential growth in U.S. sales and steady demand trends internationally, resulting in revenue of approximately $2.5 million to $3.0 million in the fourth quarter. When we report our fourth quarter 2025 results, we will share our 2026 growth expectations informed by insights from an additional quarter of U.S. launch progress.

This concludes our prepared remarks. We will now open the call for questions. For the Q&A segment, we will be joined by Shane Gleason, InspireMD's Chief Commercial Officer. Operator?

[Operator Instructions]

And we'll take our first question from Adam Maeder with Piper Sandler.

Congrats on the progress. Can you hear me okay?

We can, Adam.

Okay. Perfect. I was getting a little bit of feedback there. Maybe just to start, would love to hear a little bit more about the initial physician feedback that you're getting from U.S. customers that have started to use CGuard Prime? And then the second part of that is maybe it's a little bit early, but curious how CGuard is being used in the doctor's armamentarium. Is this kind of being used as kind of the workhorse carotid stent for customers? And then I had a couple of follow-ups.

Adam, thanks for the question. We're really enthusiastic in the response from physicians. I think that there has been a buildup to anticipating CGuard Prime's launch in the U.S. because of our baseline of experience outside of the U.S. And we purposefully launched this product over the many years outside the U.S. to build a very solid foundation of best-in-class clinical data and real-world experience. As you know, this world operates globally, and it was no secret anticipating this coming launch. So we're very enthusiastic about it.

Frankly, we're trying to make sure that we follow a very deliberate controlled approach to things to get on top of all the opportunity that we see in front of us, but to do it the right way and deliver deliberately. We're following our playbook that was designed for a long view and leadership in this space with durability over time. But I think the early days, even though it's 1 quarter of data really give us a lot of enthusiasm and encouragement. I'm going to ask Shane to kind of jump into the second part of your question in terms of where this fits in the armamentarium of our customers across a pretty broad base of carotid users.

Yes. Thanks for the question, Adam. The excitement has been really strong. And as we mentioned earlier, we're at the VIVA meeting. We're at the TCT conference last week. There are a number of other ones upcoming. And the team is in the field every day having these conversations. So the product has been very well received. And a lot of the discussion at the meeting has been exactly that. Where does this fit in to people's carotid toolkit. And up until now, there tended to be trade-offs between different stent platforms, a lot of advocacy for being comfortable with both an open cell stent and a closed cell stent for various anatomies. And one of the great things about CGuard Prime is that it really meets both of those. So we envision this to be a workhorse product. That's what the folks at the podium are saying as well. So that's our expectation going forward.

Okay. Perfect. I appreciate all the color there, guys. And for the next question, I was hoping to just go a little bit deeper into U.S. launch and wanted to see if you could share some metrics, I guess, more specifically, device ASP versus volume in the quarter, number of accounts that have implanted CGuard at this point and visibility around that process for how we should think about onboarding accounts in Q4?

Thanks, Adam. I'm going to let Shane jump in on those topics. Again, early days and early data points, but I think thus far, the expectations across that spectrum that you just mentioned have been really encouraging and sort of above expectations. But Shane, do you want to add something on those.

Yes. I'll say in terms of pricing, our approach has been that we are coming in at a premium to the market, but not a prohibitive one. The conversations that we have frequently are that our major adverse event rates are half or 1/3 of what the first-generation stents have. So we could have taken the approach that we're 2 or 3x as good, so we're going to charge you 2 or 3x as much. Price it like a drug-coated balloon or drug-coated stent newly into the market. But we know that while that may eventually get us on the shelf in some places, it would likely limit adoption certainly to being a workhorse product.

So our communication is that we're requesting a, I'll call it, a modest premium, something versus the CAS and TCAR stents, something in the hundreds of dollars, not thousands of dollars. and saying that we want it to be a workhorse stent. We don't want it to be priced to the point where you only use it in case of emergency, you only use it in the worst of your worst cases, but we want to be used in all of their cases. So I'd say a more modest premium to the market, which has been well received by physicians and administrators as well.

And just any color on accounts -- yes, sorry, go ahead, please.

Yes. I was just going to clarify the other question. So we mentioned that we've done over 100 cases since launch. Obviously, that number is growing every day. And in terms of accounts open, are we -- yes. We've had about a dozen reps in the field until very recently. And I'll say that we on average opened several accounts per rep even in the first quarter, which we've outpaced expectations where you kind of think VACs and product committees tend to be measured in quarters to years, not weeks or months, but we've actually had a lot of approvals in months and not quarters. And we've done cases in a lot of the key IDNs around the U.S. So we've made a lot of traction there in terms of opening accounts.

Yes. Adam, I would just add that this is a foundational build for us. When we talk about activation, it's all of those things. But the benefit of having a team on the field at approval, thanks to our capital strategy was really important for us so that we could get into that activation mode quickly, and we'll obviously benefit as that continues to mature.

Sure. Totally makes sense, and I appreciate the color. And just one last one, if I may sneak one more in. Just I think you just mentioned, Shane, 12 reps in the field in the U.S. until recently. Can you just remind us kind of how we should think about the sales force expansion plan as we get into this quarter, Q4 as well as 2026? I'll leave it there, guys. congrats again.

Yes, absolutely. So what we communicated last time that we have a U.S. commercial organization that was north of 20 people with most of them in the field. I mentioned the number of reps just a minute ago, but then you add in the sales directors and clinical specialists. We were exiting this year with more than 30, again, with most of them in the field. And the additions that have all been territory manager, customer-facing sales roles. And then in terms of going forward, our plan has been to get to that point here as we exit the year, let them start to throw down some routes in their accounts and then scale accordingly as we get into and through 2026.

[Operator Instructions] And we'll take our next question from Frank Takkinen with Lake Street Capital Markets.

Congrats on the solid initial launch. I was hoping to follow up on, I think there was a guide right at the end of $2.5 million to $3 million. I think I heard that was for total business. Can you maybe help us parse out OUS versus U.S. in that $2.5 million to $3 million? Apologies if I missed it.

Yes, sure. Frank, this is Mike. Yes, the breakdown of the guidance really consists of stable international sales relative to Q3 with expectations for some growth in the U.S. market in Q4.

Perfect. Okay. That's helpful. And then maybe one, I know it's probably early days here, but any comments around those who have started to use it, how they are ordering product initially? Are they starting with a few units and then reordering? Are they putting half dozen units on the shelf? How are they, generally speaking, ordering product to start.

Yes. Frank, I'll jump in there and hand it off to Shane for the back half of that question. So far, patient outcomes are great. The stent performance is great. We're thrilled by the fact that expectations are certainly being met in those 2 parameters, which is what's most important and consistent with how we've done this globally and how the stent has performed globally. I'll let Shane kind of answer the general theme that we're following in terms of how we're stocking shelves, doing cases and most importantly, how the matrix of our products fits well into the size expectations that are on the shelves.

Yes, our goal is to -- we want our team in the cases as we launch this product. One of the nice things about this space is that eventually, that won't be the requirement. We know that's a question of do you build a model where you need to be present in every single one of your cases. I'd say in the short term, as we launch the product, we want to be present in those cases. And then as we open things up going forward, we won't need to be. So what that tells is that we're not stocking shelves and running away and hoping they use it when we're not there, but primarily running the cases out of reps stock with reps present in the cases as we get started and we make sure that the users and the accounts that could use it are trained and familiar with it before we leave a bunch of products on customer shelves.

Yes, Frank, I think it's all about utilization at this point. We want to make sure that this is the go-to product and it's utilized effectively as such.

Got it. That's helpful. And then maybe if I can just sneak one last one in, gross margin commentary. How should we think about where gross margins can go with scale?

Yes. Well, I think as I mentioned on the call, the clear driver of that is the increasing mix of U.S. sales as we go forward into the future. As our volumes grow, we'll get some scale leverage just from the higher revenue, but we'll also get the benefit of the much higher margin mix of sales in the U.S. market. And so I mean, I think at this point, I don't want to start giving forward guidance on margins, but suffice it to say that as U.S. becomes a larger and larger percentage of our revenue, we would expect that our margins would approach typical medical device type margins.

At this time, we've reached our allotted time for questions. I will now turn the call back over to Marvin Slosman. Please go ahead.

I'd like to thank everyone for joining today's call and the continued support for our mission to lead and transform the carotid intervention market. We're really proud of the strong performance the team delivered globally in the third quarter and especially here in the U.S. and our first commercial quarter as we advance our activation efforts and accelerate momentum. If you happen to be here in Las Vegas at VIVA, stop by the booth, we'd be happy to see you and look forward to great progress on our business. Thank you.

Good morning, and welcome to InspireMD's Second Quarter 2025 Earnings Conference Call. [Operator Instructions] We will be facilitating a question-and-answer session towards the end of today's call. As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Marissa Bych with -- from Gilmartin Group for introductory disclosures.

Thank you for joining us for the InspireMD Second Quarter 2025 Conference Call. Joining us today from InspireMD are Marvin Slosman, Chief Executive Officer; and Mike Lawless, Chief Financial Officer. During this call, management will be making forward-looking statements, not historical facts, 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.

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 or any other updates in our current reports on Form 8-K 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. This call contains time-sensitive information that is accurate only as of today, August 5, 2025. 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, and good morning, everyone. We're happy to welcome you to today's call at this exciting and transformative moment for our company. Before we review our recent progress and second quarter results, I'd like to take a moment to formally welcome Mike Lawless, our new Chief Financial Officer. Mike brings decades of financial leadership and deep expertise to InspireMD as well as a clear commitment to our mission and to the patients we serve. I'd also like to thank Craig Shore for his contribution and dedication over the past 15 years. His impact on the company's foundation and trajectory has been invaluable and is a big part of why we are here today.

Turning to our recent progress as a business. Today's call comes just about a month after we received FDA premarket approval for our CGuard Prime Carotid Stent System, the most significant milestone in our company's history to date. We are now commencing on our U.S. commercial launch, leveraging our wealth of experience from over 30 OUS markets with over 60,000 patients treated to date to take the first step toward our mission of leading the U.S. carotid interventional market. I want to take a moment to reiterate what sets us apart as we step into this immense opportunity. Our mission is clear: to transform the carotid intervention market and deliver best-in-class patient outcomes through a stent-first approach. Over 3 million people globally have been diagnosed with carotid artery disease with countless others remaining undiagnosed, while only 155,000 are treated annually in the United States. These patients are at risk of stroke with deadly and profound debilitating outcomes.

We've invested years of effort and expertise to build an innovative stent platform, CGuard Prime, that redefines success for these patients and their providers by lowering the risk of strokes and other major adverse events to levels never achieved with stenting or surgery as validated with rigorous evidence, proven clinical results and real-world experience. We are the first company to invest in the broadest toolkit of carotid procedures supporting both carotid artery stenting known as CAS and transcarotid artery revascularization known as TCAR with an implant-first procedure-agnostic strategy. Our approach has resonated strongly with physicians who are eager for innovation to improve outcomes and practice performance while addressing the full scope of carotid intervention. In 2023, a CMS shift further catalyzed this opportunity, positioning stenting as the emerging go-to treatment.

We've built a strong foundation to capitalize on this shift with a world-class team, solid infrastructure and a sizable balance sheet, all fueling our momentum. Thanks to our investors' confidence in our strategy and plan, we were funded and well prepared to commercialize at approval. We're now building traction and velocity to create and capture market demand. At the core of our business, we have a stent platform delivering next-level outcomes ready to transform the vascular market. With the assets we've built, the evidence we've generated and the team we've assembled, we are now well positioned to execute our U.S. launch with excellence to drive growth, expansion and shareholder value.

Turning to our launch progress. In recent weeks, we've begun to strategically execute our commercial playbook in many U.S. centers. Our sales team is taking a methodical approach, leveraging claims and market data to target accounts. Early interest has been strong as we navigate value analysis committee approvals and educate providers about our differentiated stent system. As of today, we've successfully completed approvals, orders and commercial procedures in numerous accounts and hospital systems, a reflection of the enthusiasm and demand. We are not simply executing a product launch. We are laying the foundation to redefine the carotid intervention market. A successful launch starts with the right team, and we are proud of the exceptional group we've assembled. Our sales and clinical support specialists bring deep experience in the vascular markets, established relationships with physicians and administrators and a proven ability to launch innovative products successfully.

Their expertise and understanding of account dynamics are already driving engagement and establishing our presence nationwide. We continue to receive overwhelming interest from highly experienced professionals eager to join our team. This is a testament to the demand and awareness of CGuard Prime in the field, the promise of the talent we've already attracted and the sizable opportunity in a stent-first carotid intervention. Our team experienced the enthusiasm of our technology firsthand just a few weeks ago at the Society of NeuroInterventional Surgery's Annual Meeting. The energy surrounding CGuard Prime was unmistakable. Our booth was the constant hub of activity, drawing the attention of many prominent U.S. physicians eager to learn more about how our innovation can transform carotid care. Time and again, we are hearing from doctors who are genuinely excited to offer this technology to elevate the standard of care and improve the lives of their patients.

Moments like this reinforce our conviction in our technology and in our mission. We have built the infrastructure, assembled the team and developed the operational readiness to execute this launch with excellence, and we look forward to updating you all on our progress as we move through foundation building toward more robust commercial scale over the coming quarters. Turning now to our clinical pipeline, a critical component of our long-term growth strategy. We continue to make steady progress on multiple fronts as we work to expand the reach of our technology, build clinical evidence and unlock additional market opportunities. First, I'll update you on our pivotal studies in TCAR. In C-GUARDIANS II, we are evaluating CGuard Prime in a catheter designed for TCAR procedures used with neuroprotection systems that are already used commercially today.

This study is designed to demonstrate the safety and effectiveness of CGuard Prime in TCAR procedures and to open this important segment of the market to our platform. We received the FDA IDE approval to initiate the study in late 2024, and I'm pleased to report that enrollment continues at a good pace as we continue to work toward first half of '26 approval. At the same time, we're advancing the next phase of our TCAR strategy with C-GUARDIANS III, which evaluates our fully integrated TCAR solution, combining a CGuard Prime 80 stent with our proprietary SwitchGuard neuroprotection system. This study is designed to showcase the full potential of our purpose-built solution for TCAR, offering physicians a comprehensive streamlined option that we believe can set a new standard in the field. Given the variability of time lines surrounding clinical enrollment and FDA review, we now anticipate clearance and launch in 2027.

Together, these 2 pivotal studies are designed to strengthen our competitive position in TCAR, a U.S. market that already exceeds 30,000 procedures annually and to demonstrate the versatility and clinical value of our differentiated platform. We're also making progress in expanding the potential use of our technology into acute stroke care, particularly our tandem lesion early feasibility study, which we're conducting in partnership with Dr. Adnan Siddiqui at the Jacobs Institute in Buffalo, New York. This study evaluates the use of CGuard Prime in acute stroke patients with tandem lesions in conjunction with thrombectomy. These are highly complex, high-risk cases where embolic protection is critical, and we believe our proprietary MicroNet mesh technology is uniquely suited to deliver superior outcomes in this setting. To date, enrollment is roughly halfway complete.

Initial physician interest underscores the unmet need and potential impact of our technology in this challenging patient population. Each of these clinical initiatives reflect our commitment to advancing the standard of care in carotid and neurovascular disease, building evidence to support our differentiated portfolio and unlocking new pathways for growth. We believe our dual focus on CAS and TCAR positions us to serve the broadest space of physicians while leading the shift toward a stent first standard of care. Before I turn the line to Mike to review our Q2 performance, I want to highlight 2 major recent achievements that strengthen our balance sheet. Last week, we successfully entered into a securities purchase agreement with a group of leading institutional investors, raising $40.1 million in gross proceeds through a private placement. In addition, we raised $17.9 million for the exercise of warrants that were triggered by FDA approval of CGuard Prime.

This is the second tranche of warrants that were originally issued as a part of the company's milestone-based financing announced in May of 2023. These transactions achieved several important objectives in support of our growth strategy as we launch CGuard Prime in the U.S. market. First, they deepen the commitment of several of our largest existing shareholders while expanding our investor base with the addition of high-quality investors. Second, they significantly strengthened our cash position collectively bolstering our resources by over $58 million in proceeds, allowing us to invest in the commercial scale necessary to achieve key growth milestones and execute toward long-term profitability. Now we are even more confident in our ability to scale U.S. commercial operations effectively and position InspireMD to deliver meaningful growth and value over the coming quarters and years. Now I'll turn the call over to Mike to walk us through the financials. Mike?

Thanks, Marvin. Before I begin, I'd like to briefly say how excited I am to join InspireMD at such a pivotal moment in the company's trajectory. It's a tremendous opportunity to contribute to a team that's driving meaningful progress, and I look forward to supporting our continued growth and success. With that, let's turn to the second quarter results. For the second quarter of 2025, total revenue increased by 2% to $1.8 million. This increase was predominantly driven by increased usage in our international markets from the continued adoption of CGuard technology and the positive impact of foreign exchange, partially offset by decreased revenue from Russia and European distributors managing CGuard inventory levels in anticipation of the CGuard Prime launch in Europe. As expected, we did not recognize commercial revenue in the U.S. in Q2 as our FDA approval came in the last week of the quarter.

However, we have begun to recognize U.S. commercial sales this quarter, positioning us for sequential revenue growth in Q3 and beyond. Our Q2 volumes add to the growing body of real-world experience. Globally, we have sold more than 60,000 implants to date. This track record reinforces our expertise, validates our innovative platform and highlights the strength of our global commercial infrastructure, all of which position us well as we shift our focus to the significant U.S. opportunity. Gross profit for the second quarter of 2025 decreased by $18,000 or 5.7% to $313,000 compared to a gross profit of $331,000 for the second quarter of 2024. This decrease in gross profit resulted from an increase in some production variances, partially offset by lower material and labor costs. Gross margin decreased to 17.6% during the 3 months ended June 30 from 19.0% during the 3 months ending June 30, 2024, driven by the above factors.

Total operating expenses for the second quarter of 2025 were $13.3 million, an increase of $4.7 million or 55% compared to $8.6 million for the second quarter of 2024. This increase was primarily due to increases in headcount-related expenses as we continue to expand our U.S. personnel, particularly our commercial team to support the commercial launch of CGuard Prime in the United States. A second driver of our OpEx increase was occupancy and related expenses related to the establishment of our U.S. headquarters. Financial income decreased by $483,000 to $132,000 of financial expense from $351,000 of financial income for the second quarter of 2024. This decrease was primarily due to a $313,000 increase in financial expense related to changes in exchange rates and a $169,000 decrease in financial income from investments in marketable securities and money market funds.

Net loss for the second quarter of 2025 totaled $13.2 million or $0.26 per basic and diluted share compared with a net loss of $7.9 million or $0.22 per basic and diluted share for the same period in 2024. As of June 30, 2025, cash and cash equivalents and marketable securities were $19.4 million compared to $26.1 million as of March 31, 2025. The June 30 cash balance does not include the $58 million in gross proceeds from our previously mentioned financing events. As mentioned above, the receipt of premarket approval from the FDA triggered the second of 4 milestone-based financing tranches pursuant to the transformational private placement of up to $113.6 million that we originally announced in May 2023.

The remaining 2 milestones would each trigger additional tranche financings, including: one, the completion of 4 quarters of commercial sales of CGuard Prime in the United States, which we anticipate in the back half of 2026; and two, receipt of FDA clearance for the SwitchGuard TCAR neuroprotection system, along with the TCAR indicated CGuard Prime stent. While we are not providing guidance at this stage for our commercial launch, we look forward to sharing more about our progress and outlook when we report our Q3 results. Please keep in mind that while we are excited about the opportunity ahead, we know that a strong adoption trajectory will not be achieved overnight. We are executing a methodical launch to Marvin's earlier comments and we'll spend the next few months laying the foundation for robust future expansion. This concludes our prepared remarks. We will now open the call for questions. For the Q&A segment, we will be joined by Shane Gleason, InspireMD's Chief Commercial Officer. Operator?

[Operator Instructions] We'll take our first question from Adam Maeder with Piper Sandler.

Congrats on the progress. And to you, Mike, welcome and Craig, wishing you the best in the future. Two for me, and I guess I'll start with the first one, which is a little bit of a myopic question, but I just wanted to see if there's any more detail that you can share regarding your progress with U.S. account openings since FDA approval for CGuard Prime in late June? And as we think about subsequent quarters and even 2026 for that matter, are there any targets or framework that you want to provide for The Street as we think about kind of initial launch, whether that's revenue, market share, number of accounts, et cetera? And then I did have one follow-up.

Adam, this is Shane. I'll go ahead and start that one off and then maybe hand it off to Marvin for the second part of that. So we got approval about 6 weeks ago this week, and we're really excited about the progress that we've made. As we've noted previously, we have a commercial organization in the U.S. of around 20 people with a great majority of them in the field. We plan to continue scaling that and we're planning on adding roughly 10 people to that number by the end of the year. Having that group onboard at the time of approval, let us hit the ground running, I think it's common to see 6 weeks into an approval that very little, if anything, has occurred in the way of cases. We've actually done procedures with double-digit physicians, and we've even reached the point of beginning to secure shelf space with stocking orders in a number of those accounts. So I'd say the early reception has been exactly what we'd expected and hoped it to be, and we're off to a healthy start.

Adam, yes, this is Marvin. I think Shane framed it perfectly. I think that the opportunity for us was in our May 2023 financing. We were able to fuel a commercial team, a game plan and a playbook that allowed us to hit the road when we had approval, and we will continue to build off that momentum. We certainly understand that there's headwinds involved with building administrative approvals and all the things associated with readiness, and we have to have some patience in that regard. But I think overall, we've hired to the standard of being able to build access to these facilities and physicians. And so far, as Shane said, the reception has been overwhelming, and we really appreciate the fact that the market is receiving CGuard Prime as well as they have.

Okay. Perfect. That's great color there. And for the follow-up, I did want to ask about C-GUARDIANS III and SwitchGuard, your proprietary TCAR device, if I heard correctly in the prepared remarks, now expect clearance and launch in '27, a little bit of a wiggle from late '26, which I think was the prior expectation. Just wanted to, I guess, kind of better understand kind of what's driving the change in expected time lines? Is it related to device design? Is it pinning down clinical strategy and trial construction? Is it something else? And yes, just trying to kind of better understand the change in timing there and the confidence in getting clearance in '27.

Sure, Adam. Thanks. So just let's go back as a reminder of our overall TCAR strategy. It was built around the entry into the market with a TCAR indicated catheter first to unlock the potential of the implant first, which is most sought after by the physicians and remains Phase I, which is in line with our prior time lines. SwitchGuard was designed as a next-generation platform for neuroprotection and as such, requires the entirety of the development process from design through production build. And in parallel, we've also considered the clinical enrollment aspect, FDA regulatory requirements, statutory time lines, all those kinds of things.

So we're progressing exceptionally well in all of these areas, but just believe that the time line should reflect a broader window to clearance. There's variability in all of these aspects of bringing new products to market, and we're just trying to expand the window to give us room to deal with the uncertainties of those aspects of all of these launch parameters, but nothing other than that trying to be realistic and compensate for that. As you've seen in the past, we've previously demonstrated that we'll continue to find passive lease resistance and deliver accordingly and time lines in our world remain as aggressive as we can in hopes that we can beat expectations.

We'll take our next question from Frank Takkinen with Lake Street Capital Markets.

Congrats on all the progress. I was hoping you could refresh us on some account metrics. I know we've talked about it in the past, how many high potential accounts do you see out there? How many do you intend to target with the initial sales footprint? And then how does that kind of roll out progress as you bring on more reps?

Yes. Thanks, Frank. This is Shane again. So one of the nice things here is that carotid stenting is an established market. We have claims data that shows we know that there are roughly 60,000 annualized procedures and growing. They're performed by 4,000 physicians in the U.S. We have claims data showing who they are, where they are, where they practice and what their volumes are. So in terms of the old fish where the fish are, we're putting -- we're hiring our team selectively in locations that have the highest density of procedures. We're targeting the physicians that do above average number of procedures, obviously, in the busier accounts. So what we're tracking early on, the obvious one is revenue. The other ones are just physicians in every stage of our sales funnel who's expressed interest, who's in their value analysis committee who is evaluating the product and where have we secured business. So we're tracking all of those metrics in the early stages, and they're tracking in the direction that we expected them to do.

Got it. That's helpful. And then maybe also partially a refresher and just a kind of update on the broader market. The 60,000 procedures you talked about, my understanding is that's transfemoral as well as TCAR in that number. And then there's approximately another 100,000 or so that are still being completed open. What are kind of the latest trends in that mix? And then how do you think about that trend towards an endovascular first mindset progresses over the next few years?

Yes, that's exactly right. We see the trend where it used to be 70% plus surgery, that gap is closed to where it's now less than 60% surgery. And with the 40% plus being stent-based, which, to your point, could be transfemoral, could be transradial, could be TCAR. And we see those lines continuing to converge. So we expect within the next year or so that we'll likely reach a 50-50 point for the first time. And then in the coming years for carotid intervention to look just like every other vascular intervention in the U.S. where there are products, there's reimbursement and an endo first standard of care.

So between CAS and TCAR, we -- that is -- there is a mix there. It's about 50-50. And really, what we do with the claims is we can tell who's doing cases. We choose not to assume which approach they're going to take. Not all surgeons prefer TCAR, not all interventionalists prefer CAS. So we don't assume what they're doing, but then with our long-term strategy, we'll be able to serve all approaches. But in the short term, the goal is to find those that have a use for our CAS indicated stents and target those in the early stages here.

We have reached the end of our question-and-answer session. I will turn the program back over to Marvin Slosman for any additional or closing remarks.

Great. I'd like to thank everyone for joining the call today and your continued support of our mission to lead and transform the carotid intervention market. We're proud of the strong execution we delivered in the second quarter of '25 and even more excited about the milestones ahead as we enter the critical first quarters of our U.S. commercial launch of CGuard Prime. With a differentiated technology, strong clinical foundation and a clear strategy to expand the market and improve outcomes, we believe InspireMD is uniquely positioned to reshape stroke prevention in the United States. As we execute on this launch and build momentum, our focus remains on driving meaningful impact for patients, physicians and shareholders alike. We're confident in our path forward and energized about the opportunity ahead to expand provider treatment options, advance patient care and establish CGuard Prime as the standard of carotid intervention. Thanks for joining today.

Thank you. This does conclude today's program. Thank you for your participation. You may disconnect at any time, and have a wonderful day.