Good day, ladies and gentlemen and welcome to the BioLife Solutions Second Quarter 2015 Earnings Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instruction] As a reminder this conference call is being recorded. I would now like to introduce your host for today’s conference, Ms. Daphne Taylor, BioLife Solutions' Chief Financial Officer. Ma'am, you may begin.

Thank you, operator and good afternoon everyone. Thank you for joining us this afternoon for the BioLife Solutions conference call and webcast to review the financial results for the second quarter of 2015. Today we issued a press release and filed our Form 10-Q quarterly report containing detailed results for the quarter. This release is available on the Investor Relations page of our Web site at biolifesolutions.com as well as various financial websites. As a reminder, this call is being recorded and also broadcast live on our Web site. A replay of the webcast will be available through the same link for 90 days. Before we get started, let me remind you that during the course of this conference call, we will make projections and other forward-looking statements regarding future events or the future financial performance of the company. These statements are subject to many risks and uncertainties that could cause actual results to differ materially from expectations. For a detailed discussion of the risks and uncertainties that affect the company’s business and that qualify to be forward-looking statements made on this call, I refer you to our periodic and other public filings with the SEC. Company projections and forward-looking statements are based on factors that are subject to change and therefore these statements speak only as of the date they are given. The company assumes no obligation to update any projections or forward-looking statements except as required by law. Now I would like to turn the call over to Mike Rice, President and CEO of BioLife.

Thank you, Daphne and thanks everyone for joining the call. I am very pleased to provide this business update after which we will be glad to take your questions. I will start with an update on the commercial launch of our biologistex cold chain management software as a service. Then I will speak about the regenerative medicine market and the excellent product adoption we continue to see, which is building additional future value for BioLife's shareholders. To recap for you, biologistex is our proprietary cloud-based cold chain management software. Our platform combines the evo family of smart shippers that have integrated payload monitoring, GPS location tracking and cellular communications electronics with our simple to use yet very powerful cloud-hosted app. Our app enables shippers of time and temperature sensitive biologic material to complete, monitor and document critical steps in the pass out, shipment and physical and patient delivery process with real time updates on the location of the container and critical biologic payload information such as temperature, pressure, humidity, shock and vibration. The evo smart shipper is supplier by SAVSU Technologies, our biologistics joint venture partner. The award-winning, extremely simple to use, super-insulating evo smart shipper family currently includes different models that operate at minus 80 C using dry ice and at 2 to 8 C and controlled ambient temperature of about 20 to 25 C using conditioned cold packs. Evo also includes a novel, patent pending payload carrier that helps prevent accidental freezing of the payload in colder ambient conditions. It's important to understand that shipping thermally sensitive clinical dosage at minus 80 C with dry ice are at 2 to 8 C with cold packs is highly preferred in the regen med space since this is much easier and no liquid nitrogen logistics are required. These are much…

Thanks, Mike. Second quarter 2015 revenue was $1.5 million made primarily off core product revenue of $1.4 million with the remaining $100,000 from the wrap up of the contract manufacturing agreement. Core product revenue for the six months ended June 30, 2015 was $2.9 million. This is up 32% from the same period last year. This revenue growth was heavily driven by increased sales for our customers in the regen med segment which has grown over 60% compared to last year. We continue to expect full year 2015 core products revenue to come in at 20% to 30% over last year with continued significant growth from the franchise we are building in regen med. Additionally, as Mike mentioned, we expect to start reporting revenue from the biologistex service in the third quarter of this year and we will provide you with some additional metrics on future calls. Gross margin in the second quarter was 55%. This was up significantly from 45% a year ago when we were still recording high levels of low-margin contract manufacturing revenue. Gross margins for the first half of the year is 57%. This is off the mid-point of the range that we continue to expect for the full year of 55% to 60%. Operating expenses in Q2 were $2 million, which is slightly lower than Q1. But this is higher than last year's Q2 OpEx of $1.4 million. For the six months ended June 30, 2015, OpEx was $4 million compared to $2.7 million in 2014. This increase over last year is due mainly to investments that we have made in headcount and spending related to the development and commercialization of our biologistics software service. We expect G&A and R&D expenses to continue at about the same level as Q2 for the remaining quarters in 2015 with about $250,000 uptick in G&A in Q3 and Q4 due to the timing of recognizing our JV participation fee. We expect sales and marketing expenses to increase in Q3 with one time initial marketing expenses we plan to incur. As we bring the biologistics services to market, we should see sales and marketing expenses come down in Q4 from the Q3 high point. In Q2, we used $1.7 million in cash as expected and we ended the quarter with $6.9 million. We continue to expect to end the year with about $4 million in cash and furthermore, we expect that now we have sufficient cash to reach positive cash flow in 2016. I will now turn the call back over to Mike.

Thanks again, Daphne. I will like to close with some comments to convey our focus on executing to become the leading provider of bio-preservation tools for cells, tissues and organs. This is our mission and everything we do is intended to help our customers put patients first. We believe biologic based medicine using living cells and tissues is the future of healthcare and so all of our preserving precious biologic materials and providing tools to maintain viability and to ensure effective biologistics are employed to pack, ship, track and administer the therapy within the shelf life and to be able to document all of this. This is what we are providing with our bio-preservation media products and our biologistics cold chain management app. Overall, we accomplished much in Q2 and look forward to reporting on our progress during future calls. Thank you for your interest in BioLife. Now we will open the call for questions. Operator?

[Operator Instructions] Our first quarter comes from the line of Brian Marks with Zacks Investment Research. Your line is now open.

Daphne, can you talk about selling and marketing expense in Q2. I don’t think I got the gist of it. It's up quite a bit from Q1 so you can just kind of help me there.

Yes. So it's basically up from Q1 because we actually hired a couple of people during the quarter to basically continue the rollout of our biologistex service. So they are pretty much dedicated just to the biologistex process. And then we are starting to ramp up and in Q3 we will have a pretty big ramp up in cost for the marketing rollout.

Got you. And then in Q4 it will come down from, I guess, Q3 but probably be higher than Q2.

I think that’s a pretty good estimate. It will definitely come down from Q3.

And so relative to biologistex, I think one of the things that have been maybe holding it up in terms of the launch date was the software development and the IP. And if you can just give me kind of a quick status on that, that would be great.

Yes, sure Brian, Mike here. So right on, on the IP front, I think I mentioned during the last call that we had contemplated filing some patent abstracts on new features, which we did and we have another app going in shortly. And we are really thinking long-term evolution of feature sets in what's unique and I think we are building a fantastic platform that will have functionality that no one else can and having IP protection and spending the time and the money to try to get that ahead of time clearly makes sense. So on the software side as well as on the hardware side. The app is beautiful and we think it's just elegantly simple yet it's very powerful compared to some of the experience that we all go through when we try to ship something and using a shippers Web site. We are a long way from that. Feeling really good about that. On the evo side, we made some pretty significant improvements to the shipper, working in concert with SAVSU with some very important material changes that added to some delay, but that supply chain is now intact and the payload carrier itself has now a number of innovations that we fell that it was best to wait so we could come to market with these innovations. And I will be able to talk a lot more about that in the next months, particularly with regard to payload and some of the novelty and how it's different and how it would do a great job to help customers just have a much simpler pack up process. And the payload carrier work in concert with the cold packs. Cold pack technology has remained fairly stable for many many years without a lot of innovation and we have definitely innovate there so I look forward to giving you all some updates down the road. But that’s the bow on the delay. And again, feeling very good about choices we made to just wait until it could be much more potent. And we are just about there so really excited about it.

So just for clarity. On the software side in terms of the IP, that is already locked down or that’s going to be locked down here in the near future?

What we are going to come to launch with Brian is clearly locked down. We are obviously filing patents to make sure that if there is an opportunity to gain some protection, we are going to do that. But we know the landscape well and we think release 1.0 which is coming here on the next, just short few weeks, is going to be really great. But we clearly have our eyes to future releases and we are talking not just incremental improvements but the entire sort of platform approach about how we can open this up and everything we can add to it. So, yes, good to go.

So sort of, I guess a bigger picture question on biologistex. One of the, I think one of the risks of an endeavor like this is that you kind of outspend yourself trying to generate adoption and shipping volume and then sort of eventually revenue. It can be very sales and marketing intensive. So can you kind of give us a sense of how sales intensive the business is that you expect in terms of incremental spend in sales and marketing.

In a way. And I guess the way that I would like to answer your question is to first remind you and our listeners that at least within the regen med space, because we have this critically amassed group of customers who trust us, who have had great performance with our bio preservation media products. While it's not the exact same call point in terms of who will be making decisions on logistics and containers and things like that. It's still fairly interwoven. So our approach is to do what we did on the media side and that’s to go to the top of the quality chain there. Because the quality of folks clearly are hired measured and fired based on whether their clinical materials do what they are supposed to. And they also have the over side of shipping logistics to a large degree and data management on the backside. So I think what I am trying to say to you is that this isn't the sort of thing where you have to pour just buckets of money and to try to gain relationship and awareness and see the need. The unmet needs are out there. The lessons have been learned in cold chain pharma. We are bringing all of our knowledge including one of the leading former consultants to cold chain pharma now works for us. And so he has been instrumental in helping us really educate the regen med space and cell therapy customers about what they don’t know. And so based on our previous credibility and our supplier relationship this is a great complement. Now this isn't to say that regen med is the only opportunity by a long shot. There are still a number of broader markets including traditional cold chain pharma where at least for new drugs and vaccines, we will have a listening for the opportunity to innovate and not just to continue to use the sort of archaic solutions and containers that have been used traditionally. So I hear you. It's a really good question to ask. You know if you think about Daphne's comment that achieving positive cash flow sometime next year. We can think about spent for that and we are going to spend what we need to on sales and marketing but her commentary on the ramp for that peaking in Q3 and coming down and having some sustained level, we think we have got it right sized for the right amount of spending. And you know when the demand is there to add more sellers, we are going to do that at the right pace.

Can you give me kind of a sense on how many new sales people you expect to bring on, say through the end of this current year that is going to support this new biologistex business?

Vaguely. I guess the way I chose to answer this that I think if you ask me by the end of 2016, what the sales team looks like, that’s probably a cadre of six to eight sellers and a manager or something like that.

[Operator Instructions] And I am showing no further questions at this time. I would like to turn the call back to Mike Rice for closing remarks.

All right. Thank you everyone for joining us on today's call and good evening.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone have a wonderful day.