Good morning and welcome to the EDAP TMS Second Quarter 2016 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please also note today’s event is being recorded. I would now like to turn the conference over to Lee Roth from the Ruth Group. Please go ahead.

Thanks, Rocco. Once again good morning and thanks to everyone for joining us today. With me on the call from management are Philippe Chauveau, Chairman of the Board; Marc Oczachowski, Chief Executive Officer; and Francois Dietsch, Chief Financial Officer. Before we begin, I would like to remind everyone that management’s remarks today may contain forward-looking statements. These include statements regarding the company’s growth and expansion plans. Such statements are based on management’s current expectations and are subject to a number of uncertainties and risks that could cause our actual results to differ from those described in such forward-looking statements. Factors that may cause such a difference include, but are not limited to those described in the company’s filings with the U.S. Securities and Exchange Commission. With that, it’s my pleasure to turn the call over to EDAP’s Chairman of the Board, Mr. Philippe Chauveau. Philippe?

Thank you, Lee. Good morning and welcome to EDAP’s second quarter 2016 conference call. This morning I have four opening comments to share with you. The first, for EDAP, the second quarter 2016 was a significantly good quarter. In fact, it was the strongest second quarter in the company’s history. Second, EDAP continues to deliver high overall revenue growth. Third, EDAP’s HIFU growth was spectacular along with strong margins. And finally, EDAP’s cash position is solid and well managed. I would like now to hand over to Marc.

Thanks, Philippe and good morning, everyone and thank you for joining us on our second quarter 2016 conference call. I am very happy to share with you today our results for the first half of 2016 as well as our strategy and focus for the coming quarters. It’s been 8 months since we received the U.S. FDA clearance for Ablatherm Robotic HIFU. As you all know, securing terms for Ablatherm was an extremely lengthy process, but one that we were fully committed to. I am pleased to say that this commitment has been rewarded as adoption and demand have been both steady and strong since our U.S. launch at the end of last year. Thus far, we have placed system with leading urology centers such as University of South California, the University of Miami and Houston Methodist hospitals and have partnered with top mobilizers and service providers, including HealthTronics, HIFU USA, American HIFU and HIFU solution. As a result of the success of these efforts, HIFU revenues were up by 69.1% as compared to the first six months of 2015 with treatment-driven revenues up by 39.4% as compared to last year. Considering the second quarter only, our HIFU business achieved a 45.9% increase in revenue as compared to the second quarter of 2015. The strong growth was driven by the sale of three Ablatherm systems and one Focal One device, which translated to a 56% increase in sales of equipment compared with Q2 of last year. In addition, treatment-driven revenues, which include consumable sales and relate the total number of treatments using devices in the field, were up by 41.3% year-over-year. The consistent strong growth we have achieved in treatment-driven revenues provides clear evidence of the increasing adoption of our technology worldwide and increasing acceptance of HIFU as a valuable…

Thank you, Marc and good morning everyone. I will now take a few minutes to review our financial results for the three months period ending June 30, 2016. Total revenue for the second quarter of 2016 was €8.2 million or $9.2 million compared to €7.8 million or $8.7 million for the second quarter of 2015, which represents 4.6% increase and the highest second quarter revenue in EDAP’s history. Total revenue for the HIFU division was €3.4 million or $3.8 million compared to €2.3 million or $2.6 million for the second quarter of 2015. As Marc explained this 45.9% increase is based on the growth of both sales of equipment and treatment driven revenues. Total revenue for the lithotripsy division was €4.8 million or $5.4 million for the second quarter of 2016 compared to €5.5 million or $6.1 million during the year ago period. For our Q2 2016 the company recorded sales of 6 lithotripsy machines which compares to a total of 11 devices during the second quarter of 2015. Gross profit for the second quarter of 2016 was €3.5 million or $3.9 million compared €3.3 million or $3.7 million for the year ago period. Gross profit margin and net sales remained stable at 42.3% in the second quarter of 2015 compared to 42.5% in the year ago period. Operating expenses were €3.8 million or $4.2 million for the second quarter of 2016 compared to €3.5 million or $3.9 million for the same period in 2015. This increase reflected the sales and marketing efforts on expanding our HIFU business in the U.S. Operating loss for the second quarter of 2016 was €0.3 million or $0.4 million compared with an operating loss in the second quarter of 2015 of €0.2 million or $0.2 million. Net income for Q2 2016 was €2.5 million…

Thank you. [Operator Instructions] Today’s first question comes from RK Ramakanth of H.C. Wainwright. Please go ahead.

Good morning and congratulations on great run in the last 8 months.

Good morning, RK. Thanks.

And just trying to look back a little bit and in the last 8 months since approval of our Ablatherm in the U.S. and marketing the product. What do you say about what you and the sales force have learned regarding the business cycle and how your current understanding of what sort of penetration you can achieve within the U.S. market when you are comparing these parameters against what you have been doing in Europe and rest of the world?

Well, what we have learned is, I mean, first of all, we have got very – people that were very prepared and very motivated about it, jumped on it very quick. And then with time, the other not early adopters or the majority are now jumping into it and that’s how we are seeing a significant increase in our pipeline of projects today and we are working on the very high number of leads and projects for HIFU in the U.S. But what we have learned is that the sales cycle, I mean, remains the same and when big institutions in the majority of the cases, they want to purchase an equipment to get serviced on the technology, it always take some time to go through the administration and budget processing as well as validation and authorization. So, even if technology is new and people have the strong appetite for it, I mean, there is some time and that’s nearly to go around all the processes and we know that those processes and administrative steps are always long and they are taking time. So, again, we have learned that it is that the sales cycle is about the same as it used to be or it is in other countries for big institutions and articles. But we also learned that the interest is continuing to grow and we have got more and more urologists or hospitals or institutions willing to get into the HIFU program.

Fantastic. And then regarding the 6 Ablatherms and the 2 Focal One machines that you have sold in the current year, in the last 6 months, could you please tell us how many of them are direct sales and how many were leases?

No, these are there itself.

All of them?

Yes.

Okay. And then you are also talking about beefing up some of the sales force folks, so where do you stand currently in terms of the number of sales people that you have and what do you think it takes in terms of time for these new folks to understand the technology and to be able to talk about it and also become revenue producing?

Okay. So, as I said earlier in the call, I mean, I won’t disclose too much numbers about that, but what I can tell you is that during Q2 we expanded our sales force, a number of direct sales people in the U.S. and in some of the regions of the world as well, but mainly in the U.S. We have also expanded our marketing team in the U.S. and we are trying to get on board people that are coming from the urology field, people that have been involved in selling devices to the urology community and that are very well established into the network of again urology. So, they are very quickly able to understand the product, because they come from the community and also they have already a network of customers and users in their past experiences that are extremely useful to again increase our pipeline of projects. So, we are usually – again, we have expanded our sales force and marketing force in the U.S. in the last quarter. And we have done that by people that were already very well experienced and established in the urology community.

Okay. And then last question from me say when Focal One gets approved, say in 6 or 10 months from now in the United States, what’s the management strategy for marketing and assuring that there are enough resources placed behind the commercialization of both the products?

Well, I think again that’s what both when I said. I mean, the company is well funded and well prepared for the launch of Focal One in case it would be approved in the U.S. in the next month or so.

Thank you.

You are welcome, RK.

And our next question today comes from Mike Van Horst, a Private Investor. Please go ahead.

Good morning, everybody or good evening out there. Thanks for taking my call. My question is with the success that you are having right now with HIFU and hopefully the approval of Focal One coming, what generally is the timeframe usually on FDA today?

Well, there is no – I mean, again there is the clock rule. So, it’s again like a football game. I mean, football game is four quarters, 15 minutes, it could last 3 hours. So, we are in the same case even though our given guidance is that they can on that respect, but again, I mean, the cables will stop the clock anytime it’s needed or anytime a question is given. So, again, it’s very difficult. That’s a question for the FDA not for me. Even though we are doing everything we can to provide information and to be quick in our answers to the FDA to make the time as short as possible.

Okay. Another thing is I have been looking at the institutional holders and things like that it would be nice to have more than just Wainwright as an analyst following this company with the success that things are happening? And as far as insider transactions, nothing shows up for the last 6 months, I was thinking it maybe be nice to see some buys coming from some of you guys and showing that there is a lot of belief in this company?

Okay, we got it.

That’s really I have.

It is taken.

[Operator Instructions] Our next question comes from Stanley Mason, a Private Investor. Please go ahead.

Good morning, Marc. Congratulations on the results for the last quarter.

Good morning, Stan. Thanks.

I have a question and follow-up on the Focal One, have there been numerous questions that have been coming back to you that you have had to respond to?

Well, again we are interactively working with the FDA and so it’s kind of questions that we have got and….

Okay. And as far as reimbursement, I believe Germany and France currently reimbursed for HIFU, is that correct or have there been others ahead of now?

It’s correct you believe reimbursing it since a few years. And there are some – also some partial or private or type of private reimbursement in countries like Switzerland and Netherlands as well. So, a lot of European countries now are covering the treatment.

Okay. And it would be nice and I don’t know whether maybe this is information you don’t want to share, but to know how many – I know revenue was up based on procedures by I think you said 41%, but it would be nice to know how many procedures were done in France and Germany or totally how many procedures in the last quarter were done using the Ablatherm or Focal One throughout the world? Is the 41% indicative of – is that in direct proportion to the number of procedures that are being performed?

Yes, it’s pretty much indicated even though sometimes we sell some blocks of consumables that are not immediately used, but basically, it’s a pretty good indicator.

Okay. And in the U.S., we get once in a while like the Ford in Cleveland, the Ford Hospital in Cleveland and the physician who helped design the DaVinci, has he just done one procedure, is he planning on doing more procedures there?

Yes. Absolutely, we have done the first session of treatment with him a few days ago and obviously he is planning to do some more.

That’s very good. Maybe DaVinci would seem like a partner or whatever for EDAP in the future, there was an article recently about the DaVinci and how it hasn’t really been updated at all because there was no competition in robotic surgery, I don’t know whether you are aware of that and I don’t remember who put out that disclosure, but there has been very little change in the original DaVinci and there is no need to change it because they fear that – they say that there is no competition out there, whereas the Focal One may be some competitions with DaVinci and it was also reported I think on DaVinci that following surgery on the prostate that the results were not that much better than doing the prostatectomy and however, the recovery time was much rigor, less blood loss and other things in that same report, so I am hoping that with him doing using the Ablatherm and hopefully the Focal One in the future that we will produce quite a bit of competition for DaVinci and are we – the Focal One is approved in Canada, is that correct?

Yes.

And how many machines they have up here?

We have one Focal One so far in Montreal in Jewish Hospital.

Okay, alright. Okay. I guess that is the end of my questions. I hope you continue to show the improvement you have shown in the past and look forward to speaking to you again in another quarter.

Thank you very much Stan. And just to get back on your question or comments on the robotic surgeon using Ablatherm HIFU, I mean we see that more and more as again we also see the number of surgery decreasing for prostate cancer I mean those urologists and those robotic surgeons are in need of a non-invasive ablative technology to do what’s the new trend in creating prostate or in managing prostate cancer which is a partial treatment or focal treatment and that’s where I mean those highly skilled robotic surgeons are now turning to HIFU, because HIFU can given them what they need and what they have to have in the practice to complement and not too much to compete the robotic – the DaVinci robotic practice, but to complement it and to be able to continue increasing and giving the right answer to the right patient.

And thank you, sir. This concludes of question-and-answer session. I would like to turn the conference back over to management for any final remarks.

There being no more questions, let me close this call. Thank you everyone for participating on today’s conference call. Thank you and goodbye.

And thank you, sir. This does conclude today’s conference. We thank you all for attending today’s presentation. You may now disconnect your lines and have a wonderful day.