Good day, ladies and gentlemen, and welcome to the Sunshine Heart First Quarter 2016 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 be given at that time. [Operator Instructions] As a reminder, today’s conference call is being recorded. Before we get started, I would like to remark briefly about forward-looking statements. Except for historical information mentioned during the conference call, statements made by the management of Sunshine Heart are forward-looking statements that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties that are based on management’s beliefs, assumptions, expectations and information currently available to management. Those risks include, but are not limited to risks associated with the possibility that the Company’s clinical studies do not meet their enrollment goals, meet their endpoints or otherwise fail that regulatory authorities do not accept the Company’s application or approve the marketing of the C-Pulse System, the possibility that the Company may be unable to raise the funds necessary for the development and commercialization of its products that the Company may not be able to commercialize its products successfully in the EU and the other risk factors described under the caption Risk Factors and elsewhere in the Company’s filings with the Securities and Exchange Commission. By providing this information, the Company undertakes no obligation to update or revise any projections and forward-looking statements, whether as a result of new information, new developments or otherwise. You should review the cautionary statements and discussion of risk factors included in the Company’s press release issued today, the Company’s latest 10-K, subsequent reports as well as other filings with the Securities and Exchange Commission under the titles Risk Factors and Cautionary Statements related to forward-looking statements. For additional discussion of risk factors that could cause actual results to differ materially from management’s current expectations and those discussions regarding risk factors as well as the discussion of forward-looking statements in such sections are incorporated by reference in this call and are readily available on the Company’s website at www.sunshineheart.com. During this call, management will also discuss non-GAAP financial measures as defined by SEC Regulation and G. Reconciliations of these non-GAAP financial measures to the comparable GAAP financial measures are included in the Company’s earnings press release and supplemental information. In addition, a replay of the call is provided through a link on the Investor Relations section of the Company’s website. With that said, I would now like to turn the call over to John Erb, Sunshine Heart’s Chief Executive Officer and Chairman of the Board.

Thank you, Operator. Good morning and welcome to Sunshine Heart’s First Quarter 2016 Conference Call. With me today is Claudia Drayton, Sunshine Heart’s Chief Financial Officer. Following our prepared remarks, we’ll be happy to answer your questions. Having just completed my first 60 days as a CEO, I’d like to begin by stating that I continue to be excited and optimistic about the significant opportunities ahead of us here at Sunshine Heart. It has only been two months since our fourth quarter call in March, and I’m pleased with the progress that Company is making on the key clinical and financial objectives, as I laid out for you during our March call. You will also recall that back in March, we acknowledged that the Company’s previous clinical strategy was not working and that it was not the right strategy to get us where we wanted to be. Accordingly, we made the prudent decision to take a step back on the clinical trial front in order for us to take two steps forward with a more effective clinical and product strategy. I committed to working diligently with our team and our clinical investigators to lock down the specifics on a revised clinical and product strategy. At that time, we also told you our initial thoughts involved pursuit of the dual path clinical strategy which included a near-term acute clinical study focused on gathering more clinical data while at the same time developing a longer term path to a fully implantable product. Today’s call is first real chance we’ve had to provide you an update, and I’m pleased to say that we are making real progress on both of these fronts. First, our pursuit of a short term path is based on leveraging some very key learnings so far. We believe that…

Thanks John. Good morning everyone. Turning to the P&L, we did not record any revenue during the first quarter of 2016 as the patients that were implanted prior to the announcement that we had seized enrollment in the COUNTER-HF study were not eligible for reimbursement. Operating expenses in the first quarter of 2016 totaled $4.6 million compared to $7.1 million in the first quarter of 2015, a decrease of about 35%. Operating expenses for this quarter reflects lower spending, resulting from the announcement in Q1 that we were no longer enrolling patients in the COUNTER in OPTIONS-HF studies from the consolidation and stream lining of activities in all areas of the Company in an effort to increase efficiencies and reduce our cash burn and from reduced tax compensation expense. Net loss from operations for the period was $4.8 million compared to a loss of $7.1 million for the first quarter of 2015. As of January 1st, we began to repay principal amounts on our debt outstanding with Silicon Valley Bank, as the interest only period ended at the end of 2015. At the end of the first quarter, we had $16.5 million in cash and cash equivalents and $7.1 million in short and long-term borrowings. For the remainder of 2016, we do not expect to generate revenue. However, we also expect our operating expenses to meaningfully decline for the full year, reflecting the steps that we’ve taken to reduce our cash burn going forward and the impact of the revised clinical strategy that John discussed earlier. In terms of modeling 2016, Q2, Q3 and Q4 should reflect a lower cash burn than in Q1 as the severance payments that we paid out are behind us. We continue to evaluate our financing options and are carefully analyzing our capital needs based on our revised clinical strategy. And as John discussed, we intend to raise capital in 2016. I’ll now turn the call back over to John.

Thank you, Claudia. Before opening the phone line up for questions, let me reiterate that I am excited and optimistic about the future. We know we have a lot to do but I believe we are moving in the right direction. The entire management team is rising to the challenges in front of us and focused on delivering results. I know that we remain a show me story, we will continue to endeavor to be as transparent as possible about our progress in giving you the milestones that you can use to track our progress over the coming quarters, which I believe will build our creditability over time. Operator, we are ready for questions.

Thank you. [Operator Instruction] Our first question comes from the line of Neil Chatterji from Cowen and Company. Your line is open. Please go ahead.

So just, if you can maybe just kind of walk us through what steps remain between now and submission of the short-term study protocol? And then, are there any hurdles you anticipate with that submission and then if approved with kicking off the enrollment potentially here in early ‘17?

We are even as of yesterday working with our investigators and our two clinical advisors around the design of that trial. We feel pretty confident that we will be in a position to submit the trial, as we said before, the end of Q3. We have also had preliminary conversations with the FDA regarding the availability of the expedited access pathway. And they told us that this would qualify. We still have to go through the submission process to get the ELP [ph] but they basically are pretty supportive of both counterpulsation, C-Pulse and the need here in heart failure.

And then, just in terms of the implantable system, any progress there in terms of minimizing the size?

Well I think the first step for us is to feel confident about this neuromodulation effect that we are seeing. Because of the benefit from the neuromodulation, we can downsize the counterpulsation. So, first step is proved that that is as beneficial as we believe, and then second step translates that into a reduced size with the fully implantable. So, we see at this point it being a combination between the hemodynamic benefit of counterpulsation along with the neuromodulatory effect.

Thank you. Our next question is from Jan Wald from Benchmark Company. Your line is open. Please go ahead.

I guess on the full implantable device, going -- maybe going into a little bit deeper, John, the neuromodulation component, I don’t quite understand how that can reduce the size. I also I guess wonder what it does to the complexity of the program and the clinical and regulatory pathway?

Well, let’s see how I can do here to describe this. With our current device, the CP-1, what did Jim Georgakopoulos has identified is that the actual action of the pump or the balloon on the ascending order is actually causing a distension of the baroreceptors at the aortic arch, which is near where the carotid arteries pick up and the carotid nerve takes off. So, today each time the balloon expands, it actually triggers that neurohormonal change or that neurohormonal messaging to the brain. And there’s benefit there, and we’ve kind you shown that in a very acute study with the patient down in Texas where we saw the nerve traffic with the pump on and the nerve traffic change with the pump off. So, we see that correlation. If there’s a benefit of neuromodulations going on, then maybe the balloon doesn’t need to be as large to still provide the hemodynamic benefit. If the balloon doesn’t need to be as large, then the reservoir doesn’t need to be as large, then the pump doesn’t need to be as large, then the energy required to drive the pump can be less. So, it’s really first assessing the combination of those two benefits to the patient and then deciding how much we can downsize the balloon, the pump and the rest of it. Does that make sense?

Just in terms of -- is this a complexity to the regulatory pathway in a sense of what you have to do to prove it?

Sure. It’s too early for us to really say that. I think, again, first step is for us to assess the value that neuromodulation is performing, then develop the device and then go to the FDA. I don’t think it’s going to be hugely different because the pump, the pump action and all of that is not going to be any different than the CP-2 device that we’ve been working on and had regulatory input on. And the fact that there is other activity in the marketplace around neuromodulation, it’s not a new science really, it’s just identifying what we’re doing and how the combination to help a patient. So, again, I can’t be specific because I don’t know yet, but it’s certainly too well known therapies that we’ll be applying.

I guess just one more question in terms of the shorter duration device, it seems to me I guess that the FDA; in some sense it’s got to be a much -- it could be a much shorter clinical trial, I know it, probably is going to require the five years as the old trial did. But, are you looking at a three-year follow-up or one-year follow-up? How should we try to quantify when this device could be approved by the FDA, or is it still too early to tell?

I would say, it’s too early to tell. Until we really get the protocol defined ourselves, it’s tough to project too far on in the future. What’s exciting about this to me is that we’re not sitting here in Eden Prairie, Minnesota trying to bring up a solution to a product that we have. We have the clinicians, physicians contacting us and saying that I need this product; I can use it this way; I have a patient right now that this could be a great bridge to transplant device. So, there’s a lot of opportunity here that we’re assessing and finalizing, again being driven by physicians, not our R&D group.

And I guess maybe just one follow-up, I apologize, but it seems like the FDA is somewhat in favor of this kind of thing. What’s the wide space that this is filling that isn’t out there yet?

Well, there is -- Class III patients, they’re primarily either diabetics, [ph] drugs, maybe CRT; there’s a large patient population that CRT isn’t effective. So, just looking at Class III alone, the 1.5 million patients in the U.S. alone, it’s a big space that all of these patients eventually, I actually should be careful not say all but most of these patients progress to Class IV, they don’t -- there’s no cure, so there’s a big opportunity for us and a big underserved clinical market opportunity. Did that answer your question, Jan?

I guess I was trying to -- I guess the VAD is trying to come up to Class III indication as well. So, what the FDA is looking at is this shorter duration, is that what appeals to them or is it just that you do have this opportunity for the whole Class III? I guess I was confused, the other guys don’t.

I think it’s a combination of the shorter duration and the fact that the C-Pulse is much safer than a VAD. It’s outside the bloodstream. You don’t destroy part of the aorta to implant it, as you do a VAD. I mean we have a long list of comparisons to what we are doing; what C-Pulse therapy offers versus a VAD. And I think it’s the less riskier product that the FDA is most interested in.

Thank you. At this time, I am showing no further questions. I would like to turn the call back to Mr. John Erb for any closing remarks.

Very good. Well, thanks again for your interest in Sunshine Heart. We will continue to work hard and we will keep you posted on our progress, and wish you all very good day.

Ladies and gentlemen, thank you for participating on today’s conference. This concludes today’s program. You may now disconnect. Everyone have a great day.