Good day and welcome to the EDAP TMS Fourth Quarter 2014 Earnings Conference Call and Webcast. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Lee Roth of The Ruth Group. Please go ahead.

Thanks Kate and good day, everyone. Joining us today from management are Philippe Chauveau, Chairman of the Board; Marc Oczachowski, Chief Executive Officer; and Eric Soyer, 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 risks and uncertainties that could cause actual results to differ from those described in these forward-looking statements. Factors that may cause such difference include, but are not limited to those described in the company's periodic filings with the U.S. Securities and Exchange Commission. With that, it's my pleasure to turn the call over to Mr. Philippe Chauveau. Philippe?

Good morning and welcome to EDAP's 2014 Q4 and full year conference call. I have three brief opening remarks to share with you. First in 2014 EDAP significantly increased its HIFU revenue performance. Second, in 2014 EDAP continued its sound cash management. And third, in 2014 EDAP had further close discussions with the FDA. Overall 2014 continues to show significant progress for EDAP. Now, I’ll turn over the call to Marc. Marc?

Good morning, everyone and thank you for joining us on our fourth quarter and full year 2014 investor conference call. I’d first like to provide you with some details on the recent developments in our FDA clearance process for other than HIFU. I believe it is important to understand exactly what has developed since our last call and where we are heading. We met with individuals at the FDA, who are in charge of reviewing our file at the FDA campus near Washington D.C. on February 3. This was an official closed door meeting called a pre-submission meeting with the goal of discussing in details of our plan to submit a PMA amendment containing additional clinical data supporting the treatment of intermediate risk prostate cancer as opposed to the original application, which was limited to low-risk prostate cancer. If you remember we met with FDA in September of last year to discuss these pathway and we're in agreement with the concept of an amendment to our filing to include intermediate risk subjects. This sentiment was echoed in the non-approvable letter, which included some guidance on what the FDA would like to see in such an amendment. This meeting on February 3 started with the discussion on the general approval process for any latest prostate cancer therapy. FDA informed us is they believe is would be highly unlikely for prospective, let alone the prospective trial to yield a positive clearance this season to follow our intermediate risk in the current era of active surveillance acceptance. The reality is that no studies in the world have conclusively shown statistically significant benefit or any established or novel treatment of our surveillance follow intermediate or even high risk, localized prostate cancer. Both EDAP and the FDA has been struggling with the issue of prostate…

Thank you, Marc and good morning, everyone. Thanks again for joining us today. I will now take a few minutes to review our financial results for the three and 12 months periods ended December 31, 2014. Total revenue for the fourth quarter 2014 was EUR6.5 million, $8 million; compared to EUR8.1, million $11 million for the fourth quarter 2013. Total revenue for the HIFU division was EUR1 million, $1.3 million for the fourth quarter 2014 compared to EUR1.5 million, $2.1 million for the same period last year. Total revenue for the lithotripsy division was EUR5.5 million $6.7 million for the fourth quarter 2014 compared to EUR6.6 million or $8.9 million in the year ago period. During the fourth quarter 2014, the company recorded sales of 14 lithotripsy machines, including 12 Sonolith i-move devices, and two Sonolith i-sys devices. This compares to 18 devices sold in fourth quarter last year. Gross profit for the fourth quarter 2014 was EUR2.4 million or $3 million compared to EUR3.3 million or $4.4 million for the year ago period. Gross profit margin on net sales was 37.3% in the fourth quarter 2014 compared to 40.1% in the year ago period. Operating expenses were EUR3.5 million, $4.3 million for the fourth quarter 2014 compared to EUR3 million, $4.1 million for the same period last year. Operating loss for the fourth quarter was EUR1 million or $1.3 for the fourth quarter 2014 compared to an operating profit of EUR226,000, $309,000 in the fourth quarter of 2013. Net loss for the fourth quarter 2014 was EUR2.6 million, $3.3 million or EUR0.11 per diluted share as compared to a net loss in the fourth quarter of 2013 of EUR570,000, or $778,000 or EUR0.03 per diluted share. Net loss in the fourth quarter 2014 included non-cash interest expense of EUR1.2…

We will now begin the question-and-answer session. [Operator Instructions] The first question comes from RK Ramakanth from H C Wainwright. Please go ahead.

Good morning, Marc. Good morning, Eric.

Yes, good morning RK.

Hope you guys are doing good. I’ve few quick questions, I know on the 510(k) De Novo application you have limited information at this point to tell us, but what I’m trying to understand is, is there some new data that you need to provide or you’ll have all the data, which is just putting together of the application. And the second question within that is for the PMA, you had one of those interim looks by the FDA, the 100-day event or something like that. So do you have something like that in the 510(k) application as well?

No, to answer the first question on new data, we don’t need to at this point to start a new clinical study filed to provide new data. We can use what we’ve got in the ID and as well as what we’ve got in year out to provide clinical data supporting the De Novo petition. And then for the second process on the De Novo is different from the process on the PMA. So we -- as far as we know, we won’t have a 100-day kind of meeting or things like that. It’s a little bit different. It’s all expanding the FDA website.

Okay. Very good. And then congratulations on getting the HIFU device into the Canadian market. I’m sure you're very excited about that, but could you kindly help us understand, how big the Canadian market is, so that we have a feel for the market potential there for Ablatherm or Focal One?

Well the market has two different sizes. Today it's extremely big because it's on top of the United States where the technology is not approved. So it’s an easy way for American patients to go and get and receive HIFU treatment. Then once its approved in the U.S., the Canadian market will be of its size. And again there are a lot institutions there that would be able to use such a technology and it’s the Canadian markets. And again strategically that is important today is that it’s on top of the United States geographically and it has the technology available on both the Ablatherm and the Focal One.

Okay. And then regarding HIFU for liver cancer, it’s a nice extension, but is this the first time that EDAP is looking into liver cancer? I thought at some point, you had done some work in liver cancer and where does that work stand?

That’s still the same research project. It's just that you have different phases and now we are moving into new and more advanced phases of the clinical trial and development of that application.

Okay and the last pieces on Quanta. So, how will this impact your topline and what sort of financial obligations do you have for Quanta and when would we actually see some revenues come in from this relationship?

We just signed the OEM contract with Quanta and I won’t disclose details of that confidential agreement between our two companies but basically again the idea there is to create more synergy and more dynamism in our ESWL range of lithotripters to bring a ureteroscopy solution so that we can really cover everything and every need in the treatment of stone disease. And as far the question is on when can we start generating sales, that we did a prelaunch of that laser and our complete range of stone solutions at the EAU in Madrid and the official commercialization launch will be at AUA in mid-May. So we might be able to start generating revenues in Q2 of this year or in Q3 sorry, after June.

Okay. Thank you very much, Marc.

You’re welcome, RK.

[Operator Instructions] The next question comes from Jonathan Schwartz of Low Tide Partners. Please go ahead.

Good morning, Marc, good morning, Eric and congratulations on all the sales of focal devices.

Good morning.

Good morning Jonathan.

I have a couple of questions, am I correct that the per treatment payment for Focal devices is in the EUR700 to EUR800 range per treatment?

Well that’s -- I don't get your question because that's not the case and these -- the price of the focal pack, which is disposable for each treatment, yes is around EUR800 to EUR900.

That’s what I meant. In other words each time obviously this is for hospitals or clinics that own the focal device, but each time there is a treatment, the revenues to EDAP somewhere in the EUR700 to EUR800, right?

You’re right. That’s the disposable cost.

Yes I wanted to see if there was any way to get some idea about the number of cases from which these hospitals that have acquired focal devices can choose to use Focal treatment as opposed to either some other treatment or watchful waiting? Would you have any idea of the range of numbers of treatments, obviously they’re different at all the hospitals but they are large hospitals and there is a large clinic. Is the range a couple of 100 cases per year or is it more like a 1,000 or 2,000 cases per year? Do you have a sense of that at each of these institutions?

Yes well as you said, we have different types of hospitals from private to public hospitals using Focal One in Europe now and it varies a lot from one to the other. But as a reminder global -- biggest hospitals in Europe or in the U.S. won’t do thousands of treatment per year in total for prostate cancer. It's more about hundreds and again, it really varies as well from one center to the other on the percentage of focal treatment that they would do.

Right. Right.

It's difficult to say.

Anyway, order of magnitude is thousands, is that correct basically with these large hospitals?

No. No I don’t know. In Europe, you might have maybe one hospital or two hospitals that would do more than 1,000 cases a year including all technologies.

I see, okay.

For example, the Institut Mutualiste in France we see which is ranked number one public hospital treating prostate cancer they are I think performing about 500 to 550 cases altogether per year.

All right, that gives me a sense. The second question is about the website, I wonder if you would consider something for the website. As you know the joint venture between Elbit Systems and GE, the company called InSightec, which maybe the most comparable company to EDAP in the HIFU space is valued in their private offerings at about $200 million knows their offerings were sophisticated, private firms are investing. I wonder if you would consider putting a presentation on our website, which includes a comparison of EDAP and InSightec which could show for example the number of patients treated, the number of years the treatments have been ongoing, the number of peer reviewed articles. I’m sure that [Glenn Dean] [ph] and Lee could come up with things like that and others to compare the two. I thought it might be interesting information for EDAP shareholders most of whom may not be aware of InSightec and may not be aware of the comparison, I think the comparison is relevant because InSightec is valued in the space and is valued by sophisticated people like GE which is a partner. Would that be something that you might consider?

We take note of your comments.

Okay.

The thing is that InSightec is more of a HIFU company today for the treatment of uterine fibroids. So, it’s not really comparable to what we do on prostate cancer, but again we take note of that.

Thanks Marc, and then one more question. Is it correct to assume that the cost of FDA follow-up in 2015 will be similar to the cost of FDA follow-up -- FDA work in 2014?

We'll see again. We easily don’t give forward-looking statement Jonathan as you know.

I see okay. Well let me put it another way, are the functions that need to be performed very similar in both years?

Well I would say no, because last year was a full year focused on PMA with a preparation of a panel that is a huge work and extremely expensive and today we're again and in this year we’re going to run in parallel two processes, one is the De Novo Petition, the other one is the amendment on the PMA. So it's going to be up -- in the operations and the work to do is going to be slightly different than in the cost. Again we continue managing costs and [consorting] them as much as we can.

Right I understand, but it sounds as if there’s somewhat less of the extensive work to do in 2015 anyway. Thank you. Thanks Marc.

Thanks Jonathan.

There are no more questions at this time. This concludes the question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

This is Philippe Chauveau. There being no further questions, I will now close this conference call. Thank you so much for joining us. Talk to you next time.