Greetings and welcome to the MRI Interventions' Inc. 2017 First Quarter Financial 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. I would now like to turn the conference over to your host, Mr. Frank Grillo, Chief Executive Officer. Thank you. You may begin.

All right. Thank you, Audrey. I appreciate that introduction. Thank you everyone Good afternoon. Thanks for joining our Q1 2017 earnings call. With me for today's call is Hal Hurwitz, our CFO. And on behalf of the management team and employees of MRI, we appreciate your interest in our company. And for those of you who are shareholders, thank you for your support. In early April, we pre-released our record revenue and ClearPoint case numbers as we wanted to get the news out quickly. For today's call, we have lots of other information to share about both revenue growth and our income statement, as well as new strategic initiatives that expand the treatment opportunities for our MRI-guided surgical platform and do so in a relatively short timeframe. Our momentum going into Q2 is strong as the adaption of our technology continues and we are very pleased with our position and progress on the market. We are honored to be working for you in building this great company and we are proud of the care patients are receiving as a result of the continued adoption of our products and technology. With that, let me turn the call over to Hal for a review of our Q1 2017 financial results. Then I'll provide further context regarding our progress in the marketplace. Hal, back to you.

Thank you, Frank. Before we begin, I want to point out that the comments made on this call may include statements that are forward-looking within the meaning of Securities Laws. These forward-looking statements may include without limitation statements related to anticipated industry trends, our plans, prospects, and strategies both preliminary and projected; and management's expectations, beliefs, estimates, or projections regarding future results of operations. Actual results or trends could differ materially. We undertake no obligation to revise forward-looking statements in light of new information or future events. For more information, please refer to our Annual Report on Form 10-K for the year ended December 31, 2016, which has been filed with the Securities and Exchange Commission, as well as our quarterly report on Form 10-Q for the quarter ended March 31, 2017 that we will be filing with the SEC on or before May 15, 2017. All our filings may be obtained from the SEC or by visiting our website at www.mriinterventions.com. Now let's discuss our results for the quarter ended March 31, 2017. Total revenues increased 44% to $2 million for the three months ended March 31, 2017, an increase of $613,000 compared with $1.4 million for the same period in 2016. This increase was due primarily to a 51% increase in our disposable product sale, which grew to $1.7 million for the three months ended March 31, 2017, compared with $1.1 million for the same period in 2016. Disposable sales reflected a record 146 ClearPoint narrow navigation system procedures performed in the 2017 first quarter. ClearPoint reusable product sales were $259,000 for the three months ended March 31, 2017, compared with $262,000 for the same period in 2016. Reusable products consist primarily of computer hardware and software bearing sales prices that are appreciably higher than those for disposable…

Okay. Thank you, Hal. Let me start with a quick perspective on Q1 and then I will discuss the new initiatives that were recently announced and the additional opportunities we are now pursuing. For Q1 2017, we had a great quarter and we've had a number of new records for the company. Some of the highlights from the quarter included year-over-year revenue growth of 44%, including the first time quarterly revenue has exceeded $2 million. We had a record 146 procedures in the first quarter, our eighth quarter in a row of growth in procedure volume. We saw a continued strong growth in both BDS and laser ablation cases within our core narrow surgical user market evidenced in further adoption of our platform and we continue to expand our installed base with two capital deals closed, bringing total to 49 sites worldwide. Also we have four accounts completing our first procedure with ClearPoint in the quarter and we launched three new evaluation sites in the quarter. And perhaps most importantly, our new account pipeline continues to grow positioning us for further success. All of these achievements show the ongoing adaption of the ClearPoint system Neuro Navigation Technology. We continue to see growing interest in the platform and we're pleased to see the progress overall. I would also like to reiterate a few performance metrics on the income statement that demonstrate the result of our progress. We achieved a product gross margin of 61% in Q1. This is the highest to date and we have had very nice progress in this area over the last year. In fact, a year ago in Q1 of 2016, our gross margin was just under 50%. We have made steady progress on this throughout the year and there is definitely more room for improvement as…

Thank you. [Operator Instructions] Our first question comes from the line of Jeb Terry with Aberdeen Investment Management. Please state your question.

Good afternoon, Frank.

Hey, Jeb. How are you?

Fantastic, great to see this growth, can you add some color on the utilization rates and how it's continued in April and what you might think that rate going forward and furthermore what the impact on that utilization might be from the recent article in the journal for healthcare risk management?

Okay, great. Thanks for that question, Jeb. Yeah, so utilization, I mean, we've seen nice steady procedure growth over the last several quarters. So, utilization in total and on a per se basis has definitely risen over the last few quarters. And we continue to see that trends happening and if you can hold on a minute, I have some sirens in the background, just hold one moment please. My apologies. I'm in New York for this call today. So, the utilization trends we are seeing continue to go in the right direction. As I mentioned, I think April will be our strongest or highest month for procedures ever. So, we are very pleased to see that. And I expect that we will have another pretty strong quarter in Q2. And now the paper you are mentioning, the risk management paper, this is a paper that was published two weeks ago and we actually were so pleased to see it. We put out a press release on Monday of this week describing the patient risk reduction methods for doing later ablation and a two-room procedure or a one room procedure. So, a two-room procedure means they are doing - starting the procedure in the operating room and then transporting the patient down the hallway with a hole in their head and a laser fiber sticking out and all the risks inherent in that kind of transport and then they have to take the patient out and put them in the MRI as well to do the actual ablation. One-room procedure really refers to - it's a generic term essentially for using our system, the ClearPoint system where the whole procedure is done inside the MRI. The paper provides some guidelines and hints and techniques on reducing risk either way frankly and if you flip through it you will see that the recommendations of the paper on how to reduce risks for the two-room procedure are much more involved in extensive and for the one-room procedure since you don't have the whole patient transport challenge there. So, what will be impacted by a Paper D, I do think it would definitely get some attention amongst the laser ablation customers out there and you can be assured that our sales people will bring it to their attention, so we are very pleased to see it overall.

In that respect, I mean, it's just coming off of the AMS. I'm just kind of curious can you tell me about some of the doctors who are doing double-digit number of cases per quarter versus prior quarter and how - you mentioned in the earlier - I think in the fourth quarter call, something about reaching that 10% penetration or 20% penetration where you would expect to see more growth. Is that still the case?

Yeah. I still feel that the magic number in medical type adoption is probably in that 15% to 20% share as the need at adoption curve if you will. In laser ablation, we estimate that we are right in that 15% to 20% share range of share procedures done with our technology and we continue to see some great results. We had a few instances this quarter of folks attempting laser ablation procedures without our technology and they stopped the procedure and rescheduled it to make sure they could use ClearPoint. So, when I see that, that's very encouraging. We also had a couple of folks this quarter who really saw - we really saw some volume ramping for a couple of doctors who somehow within their local community and their neurology referral groups, they had critical mass. Now, I don't know the exact numbers of patient populations for that doctor, but clearly there are a couple of doctors where the neurology community in their area after four or five quarters of good results and modest volume from the local neurosurgeon with our technology have started to shift all their patients to that individual and we've seen some really nice pickup with a couple of folks in that way. And that's exactly what we want to see across the board and it's also why I've described on previous calls. We are at the point where we have enough penetration in the United States that we need to begin marketing too in neurology community more than we had in the past. We have traditionally just started with the neurosurgeon. There are prime customers. They drive the purchases and that's where we should start as an early stage company and now we are reaching that point where it's time to go out more to the referring physicians or not instead of the neurosurgeons, but in addition to them. And that's what we will start working on over the next few quarters as well, these marketing programs in that area.

I'm sorry. I will ask one question and get back in the queue. But on the number of evals, you had a - you were very pleased with the paces of new evaluations and I think you had two new installs or purchases in the first quarter. Is that continuing? Is there something that's going to drive that? Is that with the article if you just refer to first that number [indiscernible] have you seen anything that suggests that might be the case?

Well, Jeb, that article came out a week ago, so I'm not sure if I can point to anything quite yet. But certainly it is a key sale for our sales guys. On the capital front, we've already had a couple of capital sales this quarter. I think it's okay to disclose that since I know we've got the POs and we do expect additional evaluations to come in this quarter. I don't want to give too much color on those yet, because the paper work is not signed. But we expect that as well. So, continued focus on growing that installed base and making it happen.

Great. Thank you.

Thank you, Jeb.

Thank you. [Operator Instructions] Our next question comes from the line of Rodney Baber with Paulson Investment Company. Please state your question.

Hey, Frank, terrific quarter. I appreciate it. The good news [indiscernible]. A couple of things, I mean, yeah, we're sitting around that and there is a lot of metrics that play into it, but I've asked you for a long time if there is a figure seeing a serious reduction in the sales cycle and when your revenues are going up 44% and things like that, that explains it. Obviously, that's going on. But with the success you are having and the new docs and all those things, are you seeing a meaningful improvement in the sales cycle that you could explain to us so that we could understand?

Hey, Rodney, well, thanks for joining the call and thanks for the question. That's a great question, Rodney. And we are definitely seeing that sales cycle and that level of interest from surgeons continue to increase. Not the sales cycle, the sale cycle is reducing the level of interest from surgeons is increasing. And I would say for - in the beginning of the quarter of the first quarter, we had a couple of small meetings and trade shows where we met some surgeons from children's hospitals who did not know much about ClearPoint and almost immediately they were on the phone with our reps and, hey, I've got a young patient. I want to get this right now. And so in a few instances, we are definitely seeing that sales cycle come through very quickly and happen in the very positive way. Now, there is still a couple of accounts we've been working on for a long time and they have been suddenly flipped for us. But what I do feel really good about now in the marketplace is when we start talking to neurosurgeons about this concept of anatomic targeting, seeing where you are going as you insert things into the brain, the concept is well accepted and what we provide is the tools to be able to do that and that's definitely accelerating some of the conversations. So, in general, I would say, yes, we are seeing some more progress there for sure.

We still have the issues of proven things, which move into the new - the two new products are pretty much - I know you answered this, but just to get your thoughts on it. Is there any other meaningful competition out there that could be delivering the solutions that you guys can deliver to Mayo and AMS and then is there anything else out there right now that you see coming down the pipe?

In terms of being - it will provide MRI-guided therapies. I do not see additional technologies out there, biting at our heels or coming up from behind us. I strongly believe that we still have a unique leading platform for MRI-guided procedures and I am very excited this quarter to add some technologies that allow us - enable us to really pursue broadening our procedure days in addition to functional neurosurgery bringing some new areas and I don't see other companies that can provide that level of real-time imaging guidance. Now, I always give the caveat. There is competition in forms of other technologies and other surgical approaches, but I believe that, A, we have the best imaging guidance out there, a navigation system and I do not see anyone coming close to us in the MRI-guided arena.

Great. Thanks very much.

Thank you, Rodney. Thanks for joining.

Yeah, bye-bye.

Thank you. There are no further questions at this time. That does conclude our question-and-answer session. I would now turn it back to Mr. Frank Grillo for closing comments.

All right. Well, thank you, Audrey. Thank you. And to everyone on the phone, I appreciate you joining and listening in. We appreciate the interest of our investors and we hope that you sent our excitement about the progress of the company both in our core functional neurosurgery business, as well as our excitement about the new technologies that we've recently brought in to the company and provide us a great opportunity to expand the use of our MRI guidance platform into additional procedural areas. We had a great Q1 to kick off 2017 and we expect this momentum to continue. We've added two new exciting potential platforms and we are eager to jump into these programs. We are changing how neurosurgery is done, where it's done, and in some instances what can be done. And now we have the potential to change ICH treatment and pancreatic cancer surgery as well. We are confident of the benefits our technology brings to patient care and we are committed to bringing these benefits to more and more hospitals, surgeons, and patients and the marketplace is responding with growing interest and use of our products. Thank you again and we look forward to speaking more over the next several months. Bye-bye.

This concludes today's conference. Thank you for your participation. You may disconnect your lines at this time.