Greetings and welcome to the EDAP TMS First Quarter 2017 Results Conference Call. [Operator Instructions]. As a reminder, this conference is being recorded. I would now like to turn the conference over to Jacob Goldberger with C. G. Capital. Please go ahead.

Good morning and thank you for joining us for the EDAP TMS first quarter 2017 earnings conference call. On today’s call, we will hear from 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 which 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 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 Securities and Exchange Commission. I would now like to turn the call over to EDAP’s Chairman, Mr. Philippe Chauveau.

Thank you, and once again thank you all for joining us today. The year 2017 will prove to be an important year for EDAP with multiple pending milestones including one a conclusion to the FDA review of Focal One, second, the CMS review of our C-Code submission and thirdly the expansion of our product offering with [indiscernible] infusion. During this first quarter we continued to enlarge our U.S. based education program. This is part of our increased investment strategy alongside our expanded HIFU offerings. I'm delighted with the effort of our team and I'm thankful for the opportunity to offer our revolutionary prostate cancer treatment method to so many men internationally. Now I would like to hand over to Marc Oczachowski, our CEO.

Thank you, Phillip and welcome everyone to our Q1 earnings call .As you saw in our press release yesterday first quarter of 2017 revenue was €8.7 million equivalent to our highest revenue first quarter on record from last year, in a few words the highlight of our first quarter are, global UDS Lithotripsy revenue increased 16.5% compared to the same period of 2016 largely driven by the growth of our distribution business. Global revenue driven from our HIFU equipments increased more than 16.5% compared to the first quarter of 2016 showing continued traction and adoption of our HIFU technology globally. We expect continued growth in this segment driven by our persistent physician education efforts and marketing initiatives. These HIFU treatment driven revenues represent the most direct measure of user demand for our HIFU technology. We successfully added more than 50 new urologist to our U.S. HIFU training program during the quarter a testament to the continued shift in industry understanding of the ability of EDAPs HIFU devices to positively impact patient quality of life. In Q1 of this year we observed a shortfall in our HIFU division revenue that is mainly due to the slower sales of other term devices in the U.S. market. As I discussed on our fourth quarter in April a number of our U.S. prospects and leads have delayed a final purchase steps decisions waiting to have more visibility about both the Focal One clearance by FDA and the outcome of our CMS submission for C-Code to cover reimbursement of HIFU treatment in the U.S. Two projects that I will provide more information about on this call. As announced in our recent press release EDAP participated actively to the American Urological Association Annual Meeting in Boston last weekend. This conference showed by multiple ways the great…

Thank you, Marc and good morning everyone. I will take a few minutes to review our financial results for the three months period ended on March 31, 2017. Total revenue for the first quarter 2017 was €8.7 million or $9.3 million and compared to €8.7 million or €9.6 million during the first quarter of 2016 which remains highest first quarter in EDAPs history. Deferred revenue in the HIFU business for Q1, 2017 was €2.3 million or $2.5 million compared to €3.3 million or $3.6 million for Q1, 2016. The decrease was primarily due to the slowdown of U.S. HIFU devices. As Marc mentioned earlier a number of U.S. customer has delayed the operating of this event pending at the clearance of Focal One. During Q1 2017 we sold one Focal One compared to one Focal One and three Ablatherm in Q1 2016. Nevertheless HIFU treatment driven revenue continued to grow as we recorded a 16.5% increase in Q1, 2017. For the first quarter of 2017 total revenue for the UDS division was $6.4 million or $6.8 million compared to €5.5 million or $6 million during the year ago period, a 16.5% increase. This growth is mainly driven by our distribution business. During the first quarter of 2017 we sold eight lithotripsy devices including four [indiscernible] devices compared to 10 lithotripsy equipments in Q1 2016 including one [indiscernible]. Gross profit for the first quarter of 2017 was €3.6 million or $3.8 million compared to €4.3 million or $4.7 million for the year ago period. Gross profit margin and net sales contracted from 49.2% in the first quarter of 2016 to 41.1% in Q1 2017. Primarily due to an favourable mix of the sale between our HIFU and UDS segments. Operating expenses were €4 million or $4.3 million for the first quarter of 2017 compared to €3.6 million or $3.9 million for the same period in 2016. This increase reflected several marketing efforts as [indiscernible] expanding our HIFU business. As a result operating loss for the first quarter of 2017 was €0.4 million or $0.4 million compared to an operating profit of €0.7 million or $0.8 million in the first quarter of 2016. Net income for the first quarter of 2017 was €1.7 million or $1.8 million by income of $0.06 of share per diluted share as compared to a net income of €1.4 million or $1.5 million, an income of $0.05 a share per diluted share from the year ago period. Net income in the first quarter of 2017 included non-cash interest income of €2 million or $2.1 million to adjust accounting fair value of the outstanding warrants. As of the 31st of March, 2017 the Company had a strong cash position of €20.3 million or $21.7 million I would like to now the turn back over to Marc.

Thanks, Francois. We accomplished quite a bit during the first quarter equalling a produce Q1 global revenue record. We continued the growth momentum on the HIFU activities and treatments. We brought our UDS Lithotripsy division back to growth and more importantly we achieved great milestones in the development and execution of our strategy and market penetration in the U.S. with HIFU. EDAP has allowed on the reason in 2017 we continue to drive U.S. penetrations through a physician education efforts and are laying the foundation for a strong profitable U.S. segment. We look forward to receiving favourable feedback on our C-Code this year in June which would help us bring or innovate HIFU treatments to the many patients whose quality of life could be vastly maintained. We are grateful for your support and for the opportunity to positively impact the lives of so many prostate cancer patients. Thank you for joining us today. I would like to begin our question and answer session. Operator?

[Operator Instructions]. Our first question is from the line of Swayampakula Ramakanth with H.C. Wainwright. Please proceed with your question.

To start off on the Lithotripsy revenues surge. It looks like you're moving in a real good trajectory, and if I look past the three quarters saying from third quarter '16 to now it's been a nice clip, 5.4, 6.1, 6.3. So what is the magic there? What's really working for you and how sustainable is that kind of growth we have been seen in the last three quarters?

I think this is again all about the quality of our product and the fact that they are bringing innovation in that specific market and also all the marketing initiatives and expansion efforts to again cover as much territory as we can so that’s sustainable in the sense that we're really operating globally on that division and again we're trying to keep our product innovative and up-to-date.

On the HIFU business, yes you explained what's going on, we understand how the end users are trying to figure out regarding Focal One and the C-Code. So now you're adding another piece to the mix by trying to bring in fusion which is for the business but on the sales side but what are your sales folks hearing anecdotally between trying to figure out whether the end user needs to wait for C-Code more importantly or Focal One or now that if you start talking about fusion how do you think this dynamic is going to change for the sales guy who is visiting with the end user?

Well I think the main point and the first feedback we currently are getting is definitely on reimbursement. I mean that’s definitely a game changer as you know once there is a code, once there is a coverage whatever the level of the coverage is that will help more patients to access technology and that will really change, it's not easy for a patient on a profit basis [ph] to access the technology. So definitely the market will open and the potential of equipment will significantly increase with the C-Code so that’s I would say the main feedback and again that's also what created a very high level of excitement and enthusiasm and we could see that and we could feel it at the AUA as we're getting very close to an answer and a decision from CMS on that which again should happen within the next two or three weeks for an implementation on July 1st. So that is really something that that is expected and that's really something that will change again the dynamics and we are definitely pushing it forward. Now to speak about the range of devices, Fusion as I said before becomes really something that’s more and more used to again increase and improve the way of diagnosing prostate cancer therefore it was important for us to add that key feature on the entire product range. So that's what we did in putting it as an upgrade on the Ablatherm so that’s both Ablatherm and Focal One could get the fusion capability which again give us also very interesting range of product positioning to answer different needs, to match different type of budget and therefore again to increase and improve the access to the technology to a majority of the urologists.

Regarding this application to the CMS to get your C-Cord how straightforward is this application? Does I guess if filed by early March then the first chance that you can hear from them is July 1st, according to the regulations but does that mean -- it is as simple as that just that you need to get the application in and it is done or there is a back and forth between you and the CMS and if it's not July 1st, when is the next chance, how does this thing work?

These are -- they are cycle of three months, basically when you submit your application of first of March then you get -- the cycle is over on the first of June that's why we should hear somewhere in June about the answer of that cycle and then implementation and education again is one month after which is July. So basically depending on what we hear from CMS in June we may need to add some back and forth but at least we will have decision from CMS on the coding itself and then the value of the code. So it's very quick, now it took us a little time to create the share we had several meetings with CMS you know to kind pre-submit our data and check with CMS and Medicare if what we had would be according to what they expect you know, so it requires work to prepare the share, but once the share is prepared first of all CMS is aware about it because again we have got meetings with them prior to submitting and second it is very quick cycle of answers and management of those files which is three months.

Okay. And so if it is now July 1st, and it is just another back and forth so again you've a three months cycle and then it should be sometime by the end of September is that how it works basically?

Yes and no. The thing is that we'll get an answer in June so we'll have something in July. Now if we if we want to change some few things let's say value of the code or whatever then we may have discussions but we'll have something immediately.

Okay. And then once you get a C-Code is this for the procedure independent of what mentioned is used whether its Ablatherm or Focal One or do you need to keep making amendments to that document but once you're given a C-Code you're given a C-Code as long as it is a HIFU based system.

Yes that’s what it is, it's not machine dependent it's on the technology so its HIFU for prostate ablation or prostate cancer, so its independent of the machine and actually we are working on that specific file with our competitor as a partner because I mean we both would benefit from that -- so and we want add more strength as well.

And then last question from me, so if I am the end user and if I want to understand how this thing works in terms of costs for these machines. How much of a differential is there between Ablatherm and Focal One and Fusion that if I'm the end user I need to figure out whether I should worry more about the cost or the advantage or which becomes more important as an end user between the cost of these machines as well as advantages of using the three different machines. I'm just trying to figure out you know whether you're going to get a push back next -- oh okay now we have the C-Cord why don’t we wait for the fusion to come around so that's -- will people get into that dilemma or that's not really the case.

No that's not really the case and again the two machine we position differently on the market and that’s a different type of mix there are some technological differences that we got disclosed on the public call and they are also some financing differences between the two offers between Ablatherm and Focal One. Now as far as fusion is concerned we had as I said few times on the calls we have designed different types of offers that would allow people to buy machine now and get the upgrade included in the contract for when the fusion gets cleared by the FDA. So there is no issue on that aspect actually people can get started with the Ablatherm now and get upgraded when other Ablatherm Fusion is cleared which again should be not too complicated nor too long.

[Operator Instructions]. Thank you. At this time I will turn the floor back to management for closing remarks.

Well again thank you very much for joining us today. And we will be very delighted in keeping you updated of the next development and achievement that again we should hear very soon from CMS and other FDA projects. Thanks a lot and talk to you again soon.

Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.