Greetings and welcome to the AxoGen Fourth Quarter and Year End 2014 Results Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder this conference is being recorded. It is now my pleasure to introduce your host, Bob Jones, Investor Relations for AxoGen. Thank you sir, you may begin.

Thank you, Kevin and good morning everyone. Thank you for joining us for the AxoGen conference call to discuss the company’s financial results for the fourth quarter and full year ended December 31, 2014. Today’s call is being broadcast live via webcast which is available on the AxoGen website. Within an hour following the end of the live call a replay will be available on the company’s website at www.AxoGenInc.com, under ‘Investors.’ Before we get started, I would like to remind you that during the course of this conference call, the company will make projections and forward-looking statements regarding future events. We encourage you to review the company’s past and future filings with the SEC including, without limitation on company’s Forms 10-K and 10-Q which identify the specific factors that may cause actual results or events to differ materially from those described in these forward-looking statements. These factors may include, without limitation, statements regarding product development, product potential, regulatory environment, sales and marketing strategies, capital resources or operating performance. And with that, I would now like to turn the call over to Karen Zaderej, President and Chief Executive Officer. Karen?

Thank you Bob, and good morning everyone. I’d like to welcome everyone especially our new and existing shareholders to our fourth quarter and full year 2014 conference call. Joining me on the call today is Bob Johnston, our Chief Financial Officer to discuss our financial highlights of the fourth quarter and the full year. Bob will also review our financial position following our refinancing and capital raise. 2014 was a very successful year for AxoGen in terms of growth, strengthening our financial base and it has positioned us well for 2015. AxoGen demonstrated considerable year-over-year revenue growth in each quarter in 2014. Our efforts throughout increased awareness and usage of our portfolio of nerve repair products. We heard and acted on feedbacks from many shareholders with concerns that the PDL minimum royalty and footright [ph] along with the company’s cash position was an overhang on the stock. We took action by refinancing the PDL royalty contract with a new agreement with Oberland Capital and completing the recent $15 million capital raise. We expanded our surgeon education program to direct sales team and we continue to see acceptance of our growing body of clinical data. Our goals for 2015 are to build on the success of this prior year and we remained focused on increasing awareness of our products, driving changes in clinical algorithms through surgeon education and clinical studies and improving utilization of our products by expanding our sales footprint and providing strong sales execution. So let’s start with an overview of our growth. We reported record quarterly revenue of $4.8 million which represents a 61% increase over last year’s fourth quarter. In addition to delivering record quarterly revenue, our gross margin reached 80% as we delivered improved performance across our key metrics. Our fourth quarter results were the culmination…

Thanks, Karen. I'll focus my comment on financial highlights during our fourth quarter and for the year. But first, let me spend a few moments updating you on the recent actions we took over to strengthen our financial position and provide us with the resources to execute our long-term growth plans. We entered a $28.5 million financing agreement with Oberland Three Peaks Capital, which with $1.75 million of our cash allowed us to retire an existing royalty contract with the PDL BioPharma Inc. PDL also paid us $1.75 million in cash to purchase common stock. As a result, we expect to save $3.2 million in total debt payments in 2015, $5.6 million in 2016 and $5.4 million in 2017 and for each year beyond. By lowering annual debt payments, the refinancing freezes us of cash flow to support our growth strategies. We successfully raised $15 million in common – in a common stock offering in February, which provided net proceeds of approximately $13.6 million. We are putting these resources to work already in terms of recruiting new sales reps and increasingly the number of professional education forms planned for the year. In the case of Oberland Three Peaks Capital, which also purchased $3.55 million in common stock and current with the financing, and the institutions that purchased shares in the recent equity offering, it further validates their belief and AxoGen's abilities to significantly grow in the peripheral nerve repair market. Now let me discuss our fourth quarter and full year results. Our revenue increased 61% to $4.79 million compared to last year's fourth quarter of $2.98 million. This growth was primarily due to increased product usage by existing accounts and the addition of new customers. Additionally, we also recorded a $139,000 in grant revenue, which provides additional funding for some…

Thanks Bob. In summary, we delivered good growth and results in 2014, and we look forward to driving continued growth throughout 2015. I am confident that our continued focus on the execution of our growth strategies and our strength in financial resources will enable us to drive the adoption of our product. Therefore, we're introducing full year 2015 revenue guidance that we will exceed $24 million in revenue while maintaining an annual gross margin in the mid to high 70% range. Finally, I'd like to end by thanking our investors for their continued support and everyone at AxoGen for their energy and commitment to our success. Thank you. Now, operator, we're already to take some questions.

Thank you. [Operator Instructions] Our first question today is coming from Dave Turkaly from JMP Securities. Please proceed with your questions.

Thank you. I had one just quickly I would like to see if you'd comment on the total number of accounts that you guys have now or any indication as to how many new accounts you added in 2014?

Good morning, Dave. How are you? Good to hear from you. So, in terms of the total numbers of accounts we've not released what our account number is, but we are focused on both driving penetration in existing accounts and acquiring new accounts, that's been a focus over actually all of our growth strategy. When we look at the revenue, we see that revenue grows slowly in new accounts, but they are an important base, because what's the new account this year will be a big driver of growth next year. So, if we look back over the past year about 80% of our revenue came from existing accounts, and roughly 20% came from new accounts. And again, what we see is that new account is really a footprint that gives us the base to grow from for the next year.

Great. Thanks for the data on the call from the brands and what happens when people use more than one. I know you mentioned that you took a price increase in 2014. I'm curious; do you think you'll do something similar in 2015?

Yes. We've announced a price increase and yes, that's you'll see that starting to take effect in the next quarter and went into effect actually March 1st.

Last one from me. The prior state study that you mentioned, when you say share the results, are you talking about press release or is it going to be something that you think it will widen up internal or just I guess little more color there? Thank you.

Yes. That will be sharing it. The journal [ph] article will follow, but as you know those take quite a bit of time for them to get through the editorial process, but the journal article will probably be in 2016.

Thanks a lot.

All right. Thank you very much.

Our next question today is coming from Bruce Jackson from Lake Street Capital Markets. Please proceed with your question.

Hi, guys.

Good morning, Bruce.

So, looking at the guidance for gross margins, you came in last quarter around 79%, 80% guidances for mid to high 70s. Are you is this conservatism on your part or are you expecting something different in the gross margin profile for 2015?

We're not expecting anything substantially different, Bruce, but as we've said in prior calls, it is dependent on the product mix in a particular quarter. And it could be other manufacturing factors, but we're expecting to continue to have similar type of gross margins in the mid to the high 70s.

Okay, great. And then, in past you’ve sometimes given out the percentage of revenue coming from the direct sales force, do you have that number?

Yes. That continues to be approximately two-thirds from the direct and one-third from the independent distributors.

Okay, great. And then I apologize if I miss this, but did you give an update on the status of the Recon trial?

No, we didn't mention that. The Recon trial has not initiated enrolment yet, it still dependent on the IND with the FDA as you go back and for those you've may not saw this as closely. In our transition plan and working to move the Avance product to a license biologic, we've submitted an IND. We had three questions from the FDA which we thought was a pretty good record given then its an over a 6,000 page document. We've been working with the FDA in resolving those three questions and upon resolution – and those three questions actually have to do with characterization of the advance product. When we have those three questions resolved, which I believe should be shortly then the FDA will allow us to start the enrolment. In preparation of that, we have started to ramp up our work with the centers looking to get ready to go to enroll that first patient. So we've already started the IRB work.

Okay. That's great. Thank you very much.

Thank you. [Operator Instructions] Our next question is coming from Tao Levy from Wedbush Securities. Please proceed with your questions.

Hi, good morning.

Good morning, Tao

Good morning, Tao

[indiscernible] I guess three quarters away through into the first quarter and you gave guidance for this year sort of in that 40 plus percent range year-over-year. Is that the type of growth rate you expect to be relatively consistent throughout the year or is this going to be a little bit different than in prior years in terms of revenue cadent.

So we've not given quarterly guidance, so I can't give you any direction from a quarter standpoint, but I can say, I thing that we've seen good momentum coming out of last year, and into the beginning of this year and again a positive response at the combined meeting that was held in January. So I think we're seeing good growth momentum, but I don't have any guidance to give you about the quarters specifically.

And I know – the last thing, you know the first quarter tends to be sequentially similar to the fourth, and then you get this big step up in the second quarter, hence I wasn't sure of the strength that you had ending the year or something that either you actually jump off of already here in the first quarter or you need the pricing increase to kick in the second quarter as well as continue momentum from some of your other programs.

Well, in every quarter there's always these plusses and minuses that happen. So we've had great momentum. I think it’s a good stepping up point. I will mention that we have seen some affects from the weather particularly in the Northeast with the storms that have gone through, that we see at least delaying cases, we don't they go away, because people still their nerve repairs repaired. But when the patients, they worried about driving on the road, they don't show up for cases. And so, we have seen an effect of that over the last couple of months with some of these interesting storms that have gone through.

Okay. And in terms of the new hires that you plan to bring on the sales force service here, are you looking for them to sort of help split up existing sort of busy territories or potentially replace some distributors?

We've done some of each. We look at each territory and really make a prioritized decision. So in some cases we've seen and like a lot of small companies we believe that we set up our initial territories very large, and it's too much land and too many accounts. And so we've split that. So for example in New York City we had one representative handling all of New York City, Southern Connecticut, Westchester and Northern New Jersey, which is too much stuff. There is many, many hospitals that are important in that area, and so, we've now split that into a couple of territories. In other cases we've decided that a territory warranted moving from a distributor to a direct rep. And we'll continue to do that as we add reps. There are certainly more territories that need to be split. And there are some territories that we may decide that we will get better value if we put in a direct rep versus the independent.

Okay. And then just last thing, I think in the past you've given sort of that percent of Avance versus AxoGuard revenue and maybe I missed it during this call to be at that for the fourth quarter that would be helpful.

Yes. That, Tao that continues to be our revenue basis, 55% approximately for Avance and 45% for AxoGuard as a total.

Thank you.

Thank you. We've reached end of our question and answer session. Now let's turn the floor back over to Zaderej [ph] for any further closing comments.

Thank you everyone. Look forward to 2015 and see you at the Canaccord Conference.

Thank you. That does conclude today's teleconference. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation today.