Good afternoon, everyone, and welcome to the First Quarter 2018 Financial Results Conference Call for American Shared Hospital Services. [Operator Instructions] I would now like to turn the call over to Dr. Ernest Bates, Chairman and Chief Executive Officer; Craig Tagawa, Chief Operating and Financial Officer; and Alexis Wallace, Controller of American Shared Hospital Services. Mr. Tagawa, you may begin.

Thank you, Hilda, and thank you all for joining us for AMS' First Quarter 2018 Financial Results Conference Call and Webcast. Please note that various remarks that we may make on this conference call about future expectations, plans and prospects for the company constitute forward-looking statements for the purposes of safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may vary materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the company's filings with the Securities and Exchange Commission, including the company's annual report on Form 10-K for the year ended December 31, 2017, and the definitive proxy statement for the Annual Meeting of Shareholders to be held on June 14, 2018. The company assumes no obligation to update the information contained in this conference call. 2018 is off to a strong start. We believe the 8% increase in revenue and 33.1% increase in net income for the first quarter we reported this morning provide a solid foundation for the year. First quarter treatment volume at our proton therapy center at Orlando Health UF Health Cancer Center was down by 2 fractions to 1,218 from 1,220 for last year's first quarter. However, the increase in Medicare reimbursement we discussed last quarter resulted in an increase in the average proton reimbursement rate compared to the company's historical average, which, in turn, drove the increase in revenue. We remain optimistic that the pace of proton treatment volume in Orlando will increase in 2018. And with a steady flow of research studies demonstrated a clinical benefit of this advanced therapeutic technology, we believe that proton therapy represents a significant long-term growth opportunity where AMS is uniquely positioned to benefit. The increase in Medicare reimbursement contributed to higher first quarter revenue in our Gamma Knife business as well. Volumes at our new sites in Lima, Peru and Lincoln, Nebraska continue to ramp up and expect these sites to be accretive in 2018. We lost one of our Gamma Knife units due to the expiration of its contract term earlier this month. On the other hand, we recently announced a new contract to supply Gamma Knife Perfexion system to Methodist Hospitals–Southlake Campus in Merrillville, Indiana. This new Gamma Knife system is expected to begin treating patients late this year. As always, we are pleased that AMS' risk sharing arrangements will make the Gamma Knife Perfexion system available to even more brain tumor, trigeminal neuralgia and vascular malformation patients. Now I will turn the call over to Alexis Wallace to go over the financial results in detail. Alexis?

Thank you, Craig. For the 3 months ended March 31, 2018, rental income for medical services increased 8% to $5,305,000 compared to rental income for medical services of $4,914,000 for the first quarter of 2017. Net income attributable to the company for the first quarter of 2018 increased 33.1% to $390,000 or $0.07 per basic and diluted share compared to net income attributable to the company for the first quarter of 2017 of $293,000 or $0.05 per basic and diluted share. First quarter revenue for the company's proton therapy system in Orlando increased 5.5% to $1,218,000 compared to revenue of $1,155,000 for the first quarter of 2017. Revenue for the company's Gamma Knife operations increased 1.9% to $3,688,000 for the first quarter of 2018 compared to $3,619,000 for the first quarter of 2017. As we previously announced, AMS lost one of its Gamma Knife units due to the expiration of its contract term at the end of April 2017 and a second unit in August 2017. The decrease in revenue from these 2 sites was partially offset by revenues from 2 new sites in Lima, Peru and Lincoln, Nebraska that began operations in the third quarter of 2017. Excluding the 2 sites whose contracts expired in 2017 and the company's two new sites, Gamma Knife revenue for the first quarter of 2018 was consistent with the first quarter of 2017. Rental income from medical services gross margin for the first quarter of 2018 decreased to $2,206,000 or 41.6% of revenue compared to rental income from medical services gross margin of $2,346,000 or 47.7% of revenue for the first quarter of 2017. This reflected an increase in cost of revenue primarily attributable to the initiation of maintenance and service costs for the company's proton system in Orlando. Non-GAAP pretax income, net of income attributable to noncontrolling interest, increased 6.1% to $540,000 compared to non-GAAP pretax income, net of income attributable to the noncontrolling interest, of $509,000 for the first quarter of 2017. Please refer to the financial statements included with this press release for a reconciliation of GAAP to non-GAAP financial measures. Adjusted EBITDA, a non-GAAP financial measure, was $2,677,000 for the first quarter of 2018 compared to $2,616,000 for the first quarter of 2017. At March 31, 2018, cash and cash equivalents was $2,751,000 compared to $2,152,000 at December 31, 2017. Shareholders' equity at March 31, 2018, was $30,590,000 or $5.36 per outstanding share. This compares to shareholders' equity at December 31, 2017, at $29,885,000 or $5.23 per outstanding share. Craig?

Thank you, Alexis. Hilda, we are ready for the first question.

[Operator Instructions] We have a question from [Robert Bakkie], who's a private investor.

I'm so glad that you're getting better. The patient's getting better and that's fine with me. I have a question about MEVION. Is MEVION important to us? Do they give us business? Or do we give them business? What is our relationship with them? It's the only question I have right now.

The relationship that we have with MEVION is nonexclusive. We believe in the product. And I think they recently announced and their product mix. But we really rely on the clinicians to tell us what their choice of equipment would be.

Is your backlog picking up for this year?

I think what we're doing is we're concentrating on we have several that are further along that we're concentrating on to try and bring those to fruition. But we – I see that the market, in terms of protons, seems to be growing. Hospitals are definitely more interested or more serious about protons now than they have been in the past. I think the Orlando system is clearly – some of the other single room systems have clearly shown that the single room proton therapy systems can be very profitable. They just have to be run properly. So I think people are seeing that now.

Yes. We just received a report from MEVION demonstrating that all of their single room units are doing economically well. They're profitable.

That's great news. You just have to help to get more business in, right? You're working hard at it. You have a lot of contacts for a new – 1 room.

As we've said in the past, we're negotiating with at least 10 hospitals to place single room units in their facilities.

The next question comes from Anthony Marchese from – who's a private investor.

Two questions. One relates to – they're both related to each other. First, you, in your prepared remarks or in your written remarks, say you're seeing a resurgence and entrance to the Gamma Knife. So could you just maybe clarify what that means? You say you anticipate additional new sites. A, clarify that. And the second, relative to the proton beam therapy, you've mentioned repeatedly in the past that you're negotiating. What are the constraints? Is it capital? Is it the hospital? In other words, for argument's sake, all 10 hospitals wanted to go forward or one of them wanted to go forward. Do you have the capital on your end to do what they need?

Well, let me answer the first question regarding our statement with the Gamma Knife. We are seeing a resurgence in radiosurgery in general, mainly because radiosurgery treats multiple metastatic tumors very well. Clearly, clinical papers have demonstrated that radiosurgery is much better than whole brain radiation therapy in terms of long-term prognosis for patients, for many of the patients. And the Gamma Knife happens to do multiple metastatic tumors very well and very quickly, and it's a proven technology. What we're trying to look at is how do we push this technology further out into the more suburban areas and less urban areas. And I think our 2 contracts that we've done in – recently in Merrillville, Indiana and in Lincoln, Nebraska shows that you can put this high technology in maybe some smaller populated areas. So I think we see a growth in there. And I think we're also seeing a demand in Latin America for – as we mentioned, for our type of financing. In terms of the – what are the constraints of placing protons, I think our model requires the hospital to put in significant funds into this by building the facility. We obviously have to get the equipment. We have been successful in getting the equipment financed with – due to our due diligence and coming up with very good partners. We don't think that will change, but it is a long process, unfortunately, because the dollar amounts are still very significant. Dr. Bates?

We do have a new relationship with the company in Chicago that will do the financing for the hospital if they're investment-grade.

Okay. And are the hospitals that you're negotiating with investment-grade for the most part?

Yes, they are.

Okay. So it seems as though – I've realized it takes a long time, but it seems as though, I think, in the past, you felt that the biggest part of the financing is the hospital. It seems like at least you'll potentially have a partner that solves that problem. Would that be a fair statement?

For the hospital, certainly. And we're certainly looking at better ways to get equipment financed, and that's looking stronger, looking – I think we've discussed this with you before a medical equipment trust. That is looking more promising.

The next question comes from Tony Polak from Aegis Capital.

Could you give us an idea on the proton beam in Orlando, what – how many patients per day they are doing if you're allowed to say that? And what is capacity there?

It fluctuates like – and I think what I can tell you is they've – obviously, as we mentioned last quarter, they did about 1,218 fractions. And it's very – they've gone from – usually, they're – lately, they've been hovering anywhere from 20 to 30 patients. And – patients, obviously, they fall off after the treatments are done, and there might be a gap in between when they put new patients on. I would say that for a facility like Orlando, that there's more complex cases. And because they – and they do more pediatric patients because they have a large pediatric hospital. It's probably in the – mid-35 range is the most that they would do would be my guess. But again, it depends on the patient mix as to how many patients you're going to put on.

Right. And what – is there another hospital near you, near Orlando that has a MEVION or a similar proton beam therapy? Or what is the furthest one away?

The closest one – there are 2 systems in Jacksonville, which would probably be the closest, and there will be one in Miami, a system. But those would be the closest proton centers to us currently.

The Ackerman Center in Florida has achieved over 50 patients a day in a single MEVION treatment room.

The next question comes from Mr. Lenny Dunn from Mutual Trust Co. of America.

It's a pleasure to read a positive earnings statement like this one. And I assume that if things don't improve with the proton end, we could still be looking at decent earnings. And clearly, we need to improve on the proton end. And it just seems to me an interminably long time to get these things signed. But are we close to getting 1 or 2 of them done, so that maybe by the next quarter's conference call, we can discuss that we have some signings?

Well, I think we're close to getting an agreement signed with the facility in San Francisco. I think we'll get that signed by the end of the year. Our construction will probably take another 18 months. But I'm encouraged that will happen, and this will probably the first unit in San Francisco.

Of course. Obviously, that would be – probably get more used than the one in Florida because of location. But I understand that it takes time to get the building built, get the approvals done. But I would like to at least see the signings because, then, our future is just clear. So that – my question was more about getting the signings than the length of time from the signing to the actual getting the patients treated. Because that we're more than aware of from my experience with Orlando, it takes time. But do you think that we could get 2 of them done or just [build] the one in San Francisco?

Well, we're hopeful that the Orlando facility will be signing up for its second room in the foreseeable future. And by that, I mean, within – hopefully within the next 12 months. Because they're very busy now. They're doing well. Highly profitable.

Yes. But that example, it would seem, would give the impetus to other hospitals that are around the edge to get going because you can show them in a concrete – this is just a plan. This works and this is why it works and how it works. Okay. And again, the Gamma Knife business is certainly not a bad business, and I'm glad to see another signing. Do you think we'll get another 1 or 2 of those signed up this year?

Yes, we do hope to put on at least 1 more – or at least sign up at least 1 more by the end of the year.

Okay. Now this story...

And we think there are opportunities in South America, Lenny, for Gamma Knives. There seems to be a lot of interest in Gamma Knives in South America.

Yes. Of course, it varies. Some of the countries are not great places to have operations in. But, yes, I'm sure you're aware of which ones are the safe ones to be in.

We're aware of that.

Yes. The other thing is that you – now you have a viable story that you can tell, we're making money, we have expectation of large growth and we're selling for still less than half of book value with the current price because the book value keeps going up. We need to show this to more people. So we're not the tree that falls in the forest and no one hears. Is there a possibility of doing a little bit of a road show in the near future so that we – more people can be aware of this?

I think we can go out there and tell people now that we truly are a growth company, and we're prepared to do that. We're going to be doing more road shows starting this summer.

Okay. Good. Because I think that's what needs to be done, to wake up the share price, because there's no way we should be signing for less than book value. Okay. Well, those are my questions. And again, congratulations on a good, strong quarter.

Mr. Tagawa, there are no further questions. Would you like to make your closing remarks?

I just like to thank everyone for joining us this afternoon. And we look forward to speaking with all of you on our second quarter conference call later this summer.

Thank you. This call will be available on the general replay immediately following today's conference. To access the system, dial 888 843-7419 and enter the passcode 46931110, followed by the pound sign to access the replay. The webcast of this call will be available at www.ashs.com and www.streetevents.com. This concludes today's teleconference. Thank you for participating. You may now disconnect.