Good day, ladies and gentlemen, and welcome to BioLife Solutions Second Quarter 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct the question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, today's conference may be recorded. I would like to introduce your host for today's conference, Mr. Roderick de Greef, Chief Financial Officer. Sir, please go ahead.

Thank you, Michele. Good afternoon everyone and thank you for joining us for the BioLife Solutions conference call and webcast to review the operating and financial results for the second quarter of 2016. Earlier this afternoon, we issued a press release which summarizes our results for the three and six months ended June 30. This release is available on the Investor Relations page of our website at biolifesolutions.com. As a reminder, this call is being recorded and also broadcast live on our website. A replay of the webcast will be available through the same link for 90 days. Before we get started, I would like to remind everyone that during the course of this 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 filed 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'd like to turn the call over to Mike Rice, President and CEO of BioLife.

Thanks, Rod and good afternoon everyone. I'm pleased to discuss our second quarter and full year results and activities we're focused on to drive growth and increase shareholder value, afterward we will be glad to take your questions. I'll start off with the review of our biopreservation media business. I’m pleased to report that this business segment is experiencing solid growth as we continue to gain new customers and receive more frequent and larger orders from late stage clinical customers in the regen med market and from our key distributors. So far this year, we gained 75 new customers including 24 new cell therapy companies who are in early stages of product adoption. This is fantastic as we continue to fill the funnel with new customers. Resources for new customers include scientific conferences, our marketing programs, data publication and scientific journals on the use of our products, and researchers and manufacturing decision makers moving to new companies and bringing their best practices with them including the use of CryoStor and HypoThermosol. Of the 24 new cell therapy accounts, several are developing various T-cell therapies for cancer. As cell therapy companies get closer to filing for regulatory approval in the U.S. and other countries, locking in long term access to our proprietary biopreservation media products is crucial. We recently announced the execution of 10 year supply agreements with Kite and Bellicum. We have additional agreements in force with other marquee cell therapy companies that we can’t disclose and are in discussions with more late stage clinical customers to execute supply agreements. The customer requirement of our supply agreements is to provide us demand forecasting estimates so in the future we should have more clarity on product demand and our order commitments from a number of larger customers. Now I'd like to…

Thanks Mike. As noted in our release, biopreservation media revenue for the first three months of 2016 reached a record $2 million, which represents a 39% increase over the second quarter of last year. Total revenue for the quarter rose 33% compared to $1.5 million last year. For the six months, total revenue was $3.8 million or 28% above the prior year. The increases in revenue were primarily the result of higher sales to our customers in the re-gen med space and to our domestic and international distributors. Gross margin for the second quarter was 56% compared to 55% last year. And gross margin for the six-month period was essentially unchanged at 57% compared to 2015. Total operating expenses this quarter were $2.7 million compared to $2 million for the same period in 2015. For the six-month period this year, operating expenses were $5.3 million compared to $4 million last year. The increase in operating expenses is primarily the result of severance payments made during the first six months, increased stock-based compensation expense and higher personnel, sales and marketing and development cost associated with our biologistics product line. The net loss attributable to BioLife this quarter was $1.4 million compared to $1 million last year. For the six months of this year, the net loss attributable to BioLife was $2.6 million compared to $2 million in 2015. Our cash balance at the end of the second quarter was $1.3 million compared to $3.8 million at December 31, 2015 and $1.6 million at the end of the first quarter. With respect to our outlook for 2016, we are reaffirming that we expect our core biopreservation media revenue to grow between 20% and 30% over last year and exceed $8 million for the full year of 2016. As Mike mentioned, we also expect nominal revenue from biologistics in the second half of this year. We anticipate that the gross margin on our biopreservation media revenue will continue to be in the range of 55% to 65%. We expect to continue to use cash this year and into 2017, but we believe that the $4 million credit facility with our largest shareholder WAVI Holdings in conjunction with our current projected operating results will provide the company with sufficient capital to reach positive cash flow from operations next year. Now I'd like to turn the call back over to Mike.

Thanks again, Rod. I’ll close by stating that we are 100% focused on executing for growth. We have three key initiatives, driving continued biopreservation media adoption in the re-gen med market demonstrating and gearing up for the commercial launch of Storganix to enter the organ storage market early next year. Success in these three initiatives will transform BioLife into a cash flow positive and profitable company and should reward shareholders. Our entire team is committed to success. Thank you for your interest in BioLife. Now I’ll open the call for questions. Operator?

[Operator Instructions] Our first question comes from the line of Jeffrey Cohen with Ladenburg Thalmann. Your line is open. Please go ahead.

Hi, guys. Can you hear me okay?

Hi Jeff. Yes, right on. Come up, you're loud and clear.

Awesome. So three questions. Firstly Mike, can you elaborate a little bit on the organ storage business please?

I can Jeff. So Storganix is a product we have in development. Its equivalent to the leading organ cold storage solution used to preserve a number of organs that are designated for transplant. We’re going to manufacture the product here in our [Mountain] facility and we have plenty of capacity. The validation work is undergoing a lot of activity right now. We anticipate no hurdles. As you might have read in the press release that we anticipate filing the 510-K application by the end of the year and then this market in total, amongst a small handful of competitors, it could be a little under $200 million next year and growing at a 7% to 10% clip for the foreseeable out years. So we’re excited about this. We can make it and we expect to have good gross margins on it. The number of participants we would be selling to is not a crazy amount. There are perhaps a 100 or 110 OPOs and/or transplant centers that are the call points and we understand who the competitors are and believe that this can contribute meaningful revenue for BioLife next year after the launch.

That’s great. So is that intended for transplant solely being shorter term in nature or for longer term in nature?

Yes, so Jeff, this is the plug and play replacement for some of the generic equivalent cold storage solutions where an organ is removed from a donor patient. It's basically put in an icebox Styrofoam coolers and its based in a storage solution and that’s the actual application while its being transported to wherever the recipient patient might be. So, it’s a matter of short term duration.

Okay. Got it. Secondly Rod, can you comment a little bit just looking at OpEx number, do you expect Q2 to be fairly constant during the third and fourth quarter for the back half of the year. I’m estimating a little bit on the whole side…

We don’t really see any material increases in the OpEx at this point in time. So, I think Q2 is a reasonable go-forward for the next several quarters.

Okay. Got it and lastly Mike if you could elaborate for us a little bit on the number of the trials you're involved with both early, mid and late stage, could you give us a better idea as far as actual indications of the top two that you could call out as far as indications of some of these companies are going after.

Glad to Jeff. So the predominant clinical indication for the use of our products in cell therapies are blood cancers followed by solid tumors. So within blood cancers, these are the AML, CLL and other just really nasty diseases that these patients get. We're following a number of chemoregimens or other combination therapies. Many of them have no hope and if you are following, I know you follow the CAR-T cell space very closely. So you're aware of some of the pretty astounding partial and complete remission rates that are being achieved through the use of engineered T-cell therapies in this personalized medicine endeavor. And so we’re really -- we’re really encouraged by that. We think that as the early slate of our customers get their CAR-T cell therapies approved and they take off by manufacturing next year, those will be encouraging times for patients first and foremost, but also very exciting times for us here at BioLife. We’re going to be busy. We have capacity that teams geared up for that. Everybody at the company knows what we do here and I can help these cell-based therapies work better and we preserved and ultimately with the aim to help our customers improve cell-based medicine. So, that said, it's blood cancers followed by solid tumors and then we have heart disease. We have customers pursuing clinical use of cells for vision loss, for movement disorders such as knee, osteoarthritis, or stress incontinence. We're talking about really, really big prevalence and instant raids, big disease states where there are lots of patients around the world. So we're in a really, really good spot here. It's taken quite a while for the cell therapy space to materialize. I’m happy to say that our efforts I believe are going to pay off with 220 trials now. Not all are going to make it, but several will and that will certainly transform BioLife. And then as you heard me say, when I started my opening comments, we're all about trying to catch the new companies that are being formed not very early, so we get our products adopted in the manufacturing process at the earliest possible state, and that's going very well.

Okay. Got it. And lastly, how many of the 20 or so Phase IIIs read-out over the coming six months and how many will read out over the coming 12 months approximately if you were to estimate it?

Hard to say. We know, we certainly know that there are a small handful that we’ll be reading out before the end of this year and into the first quarter. We do know that some customers are [planning the delays] by the end of this year. And so we're encouraged about what the next two to four quarters that will mean for BioLife.

Perfect. Okay. Appreciate you taking the questions. Thanks a lot.

[Operator Instructions] And I'm showing no further questions at this time. And I would like to turn the conference back over to Mr. Mike Rice for any closing remarks.

Thanks Michelle. I'll just say thank you everyone again for your interest in BioLife. Good afternoon.