Good day, ladies and gentlemen and welcome to the Sunshine Heart First Quarter 2017 Earnings Conference Call. 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 risk associated with the possibility that the company maybe unable to raise the funds necessary for the development and commercialization of its products that the company may not be able to commercialize its product successfully, that the company may not be able to successfully integrate acquired businesses that the company may not realize anticipated synergies and benefits from acquired businesses 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 or 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 its other filings with the Securities and Exchange Commission under the titles Risk Factors or 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 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. 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. We are very excited about our revitalized and growing Aquadex business. We are increasing the number of hospitals using the Aquadex FlexFlow system. Revenues are growing double-digits with 21% revenue growth in Q1 2017 over Q4 2016. There is increased use of Aquadex in hospital observation units and outpatient clinics. We have successfully completed our financing to fund operations through Q1 of 2018 and we have received NASDAQ compliance to termination last week. Let me remind you that the Aquadex FlexFlow system consists of three primary components the console pump, which has a $28,500 list price, a one-time use disposable blood circuit with a list price of $900 and a small dual-lumen peripheral catheter that simultaneously withdraws blood and returns filtered blood to the patient’s arm. Aquadex is a unique proprietary product that is used for the temporary ultrafiltration treatment of patients with fluid overload. Ultrafiltration is a process that removes water and salt from a patient in a manner similar to how the kidneys function. Fluid overload is a condition that is prevalent in heart failure patients, which could lead to de-compensation, resulting in lengthy and costly hospitalizations. There are over 1 million patients hospitalized per year in the U.S. for acute heart failure and approximately 90% of these patients present with symptoms of fluid overload. Aquadex has been showing randomized controlled clinical trials to remove more fluid than diuretics and to reduce both the length of stay in hospitals and repeat hospitalizations. Sunshine Heart acquired the Aquadex business from Baxter International approximately 9 months ago, although there is a large install base of Aquadex consoles with over 500 consoles owned by over 300 U.S. hospitals. At the time of the acquisition, there were only about 55 hospitals that were providing the therapy to their patients.…

Thanks John, good morning everyone. Turning to the P&L revenue from our newly acquired Aquadex business was $901,000 for the quarter, a sequential growth of 21% over the fourth quarter of 2016. The growth was driven mainly from a 23.5% sequential growth in the sale of circuit sets which make up 85% to 90% of our sales on any given period. Also, during the period our tech services revenue grew sequentially by about 71% as more and more customers send us their consoles for recalibration services. Our cost of sales reflects a priceless state for inventory on their manufacturing and services agreement we signed Baxter at the time of acquisition. Under this pricing structure, we expect our standard margins to be around 60% or a bit higher. Included in cost of sales are also startup manufacturing costs related to our planned manufacturing transition from Baxter. In terms of other operating expenses for the first quarter a total of $2.7 million, a decrease of about $1.9 million from the same period last year, the decrease in expenditures reflects lower clinical spending resulting from the announcement in the first quarter of 2016 that we were no longer enrolling patients in our C-Pulse related clinical studies from the consolidation and streamlining of activities in all areas of the company and from reduced stock compensation expense. In terms of non-operating expenses, they reflect an unrealized gain of approximately $1.4 million related to the change in fair value of the warrants that were issued in connection with our July and November equity raises. Those warrants were classified as liability on our balance sheet as of December 31, 2016 and required fair market valuation on each of reporting period, mostly included in our non-operating expense is a charge to earnings for $67,000 related to the incremental…

Thank you, Claudia. Before opening the phone line for questions, let me reiterate that I continued to be very optimistic about our future. We know we have a lot of work ahead of us, but I believe we are headed in the right strategic direction. The entire management team is rising to the challenges and we are focused on delivering results. We will continue to provide you with milestones to track our progress over the coming quarters. Operator, are there any questions?

[Operator Instructions] Our first question is from the line of Jeffery Cohen of Ladenburg Thalmann. Your line is open.

Hi John and Claudia. Thanks for taking my questions.

Good morning Jeff.

So could you talk about some of your selling channels specific over the next 1 year or 2 years and in particular outside U.S., what’s current revenue outside the U.S. and what you planned for OUS as far as your short-term and near-term revenue drivers?

Sure. First to address the challenges we have in front of us in the U.S. There is tremendous amount of opportunity just bringing back online the over 300 hospitals that have already committed to the therapy. We had a relatively small sales force at this time with eight reps now. We plan to increase that to 12 reps here in the next couple of months and really with bringing Jim Breidenstein on-board as our Chief Commercial Officer really putting that strategy together to accelerate the utilization within those hospitals and the penetration into additional areas in the hospital. So it’s – we are in a good position that we are not out hold calling trying to open new accounts. We have a wealth of accounts in front of us that we believe we just need to get back in and support these folks. On the OUS side today our revenue was very small. We have a couple of accounts in the UK and an account in Germany that are utilizing. But basically for the last 2.5 years Baxter abundant that business totally and they have not been supported. We will look back to grow the OUS market in the second half of this year. I was at the European Society of Cardiologists Meeting in Paris a week ago. And I was very surprised and pleased to hear the number of presentations that were made around ultrafiltration and the value of ultrafiltration. And it made it clear to me that we should probably step our strategy – step-up our strategy to get into the o-U.S. markets. I think it’s just going to be a matter of having the resources to do that and having the bandwidth, but they will be important step for us.

Okay, got it. And Claudia or John, how should we think about OpEx for 2017, do you expect it to be fairly in level with Q1 levels coming in at around $11,000 annual basis or will that be increasing from Q1 number?

We expect some modest increase as we continue to ramp up our distribution channel. We want to invest in the sales force and getting our presence out there, but nothing dramatic or out of line.

Okay, got it. And lastly John, could you talk about some of the clinical work that you are involved with thus far as far as some studies and trials for this year that are planned?

Sure. First of all, there is a fair amount of activity going on that is hospital and physician initiated trials and we are supporting those trials as we can. But it’s really been part of the revitalization of this that these physicians and hospitals we have will recognize that now there is a company that will support them with the training and service requirements for them to do these smaller trials and they have been very active. So, that’s again a real opportunity for us and a real indication to us as the value of ultrafiltration to these hospitals and physicians. Once they know they have somebody that’s going to support them in the field to bring them to success. We actually have budgeted in the second half of this year to initiative an outpatient registry. We right now are in discussions with our reimbursement consultants to determine to what extent that registry needs to be or should it be a small clinical trial. I think we are tending towards it being a registry, but again, the details of that will come out in the third quarter as we finalize plans to initiate that. And then I might add just that, that is really focused on outpatient. We think our biggest opportunity right now is to get that outpatient reimbursement and that’s primarily being driven by hospitals and hospital systems: number one, wanting to avoid these heart failure patient admissions if possible and number two, to make sure that they manage the length of stay under the DRG within the hospital, but have the outpatient or observation unit available to them to treat these patients to avoid the readmission.

Perfect. Thanks for taking the questions.

You are very welcome.

Thank you. And I am not showing any further questions. I would like to turn the call back over to Mr. John Erb for any further remarks.

Very good. Thank you. If there are no questions, I want to thank you all for joining our first quarter conference call and wish you all a very good day. Thank you.

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