Good afternoon, ladies and gentlemen. Welcome to Cytori Therapeutics Fourth Quarter and 2015 Earnings Results Call. At this time, all participants have been placed in a listen-only mode and the floor will be open for your questions following the presentation. [Operator Instructions] Before we begin, we want to advise you that over the course of the call and the question-and-answer session, forward-looking statements will be made regarding events, trends, business prospects and financial performance, which may affect Cytori's future operating results and financial position. All such statements are subject to risks and uncertainties, including the risks and uncertainties described under the Risk Factors section included in Cytori's annual reports on Form 10-K and quarterly reports on Form 10-Q filed with the Securities and Exchange Commission from time to time. Cytori advises you to review these risk factors in considering such statements. Cytori assumes no responsibility to update or revise any forward-looking statements to reflect events, trends or circumstances after the date they are made. It is now my pleasure to turn the floor over to Dr. Marc Hedrick, Cytori's President and Chief Executive Officer. Sir, you may begin.

Thank you, Kris, and good afternoon, everyone. Welcome to our fourth quarter 2015 earnings call. As Kristen said, my name is Marc Hedrick. I am the President and CEO of Cytori. And joining me on our call today is our Chief Financial Officer, Tiago Girão; our Chief Medical Officer, Dr. Steven Kesten and joining us from Japan is our Global General Manager of Cell Therapy, John Harris. We have recently issued our Q4 earnings release and proxy which should be posted on our website and a copy of this transcript will be available there soon as well. So here's the agenda for today's call. I want to start off with a brief update on our clinical programs, then turn it over to Tiago who will update you on the financials and then I am going to ask John Harris to provide us with a more full update on our progress in Europe and our Managed Access program in Japan. And then I am going to drill in on some of our plans for 2016 including the clinical, commercial and operating fronts and this will include more about how we intend to get the company on an optimal financial footing, a path to breakeven and on a real growth trajectory. After that we will discuss forthcoming milestones and then Q&A. So, as I begin, I’d like to just touch on 2015. 2015 was a very productive year for this company all across the board. On the clinical side we have multiple late-stage trials in enrolling. Operationally we hit or exceeded just about every external and internal measure we’ve set. Financially it’s the same story. The capital deployment in my view and our utilization of capital was targeted and effective and we established internal policies and procedures that should continue to drive…

Thanks Tiago and good afternoon everybody. Previously, Marc had provided some background into our initiatives to provide hand scleroderma patients with access to ECCS-50 in EMEA beginning in 2016 via Managed Access Program or MAP. Cytori’s MAP partner in Europe is Idis and is in the process of setting up the required program documentation, product supply chain, packaging, labeling and conducting a country by country regulatory assessment with the competent authorities in each of those areas to ensure compliance and prioritize our targets list. We are effectively acting as a commercial licensing. Cytori is performing an independent pricing strategy assessment for ECCS-50 in EMEA that will also support the MAP program and downstream commercialization which is critical to get that right today. We have included in our 2016 guidance, a conservative utilization scenario specifically regarding adoption and pricing. However, based on Idis’ typical operating experience and some positive patient and physician interest and feedback about the MAP, we see potential scenarios of upside utilization in 2016 to 2018 horizon that may be achievable. In the coming months, Cytori plans to exhibit and answer questions about the MAP at the Rheumatology 2016 Conference in Glasgow and The Annual European Congress in Rheumatology in London. Now let me turn a little bit to Japan here. I've been with the Company since October of last year and here are some of my insights in joining Cytori. I joined Cytori directly from Becton Dickinson and that in that role as I was intimately familiar with the market dynamics in Japan regarding cell therapy and regenerative medicine. My decision to join Cytori team was driven based on my view of the opportunity for both Cytori technology and the opportunity for Japan generally. First let us focus and strategy in Japan. One, it’s to maximize the…

Thank you John, I appreciate those remarks and thanks for joining us this afternoon. So to summon up then, in terms of our 2016 financial plan here is what we see. A continued emphasis on burn reduction in 2016 and despite the substantial efforts our team has made since I took over as CEO, which includes reducing the headcount by about 40% and reducing the operating cash burn by nearly 40%. The ongoing - the future gain will not come as easily as they did over the last couple of years. As next we focus on further cost containment activities and some other initiatives that we think are going to drive operating efficiencies. Things like structural reductions such as overhead reduction and ongoing initiative to lower our current products cost of goods and increase the margins related to sales of those products and continued pressure on discretionary expenses. We also see revenue opportunity as John mentioned. First of all, revenue growth in Japan and that’s primarily due to clarity that we see on the regenerative medicine law front as well as implementation of some new strategies that John mentioned that we think have legs. The second thing is an important new source of revenue, the Managed Access Program which provides us immediate on ramp and to a sizeable market in scleroderma that we think is going to materialize this year and then grow until we get the full approval in the US which is where growth should really - we’ve transitioned upward. And then finally, we are anticipating continued government contract revenue and related offsets. Now as Tiago aforementioned we can forecast a further reduction in burn in 2016, however most planned expense reductions will largely be implemented in the 2016 timeframe and therefore we see continued burn reductions in…

[Operator Instructions] Our first question comes from the line of Jason Kolbert with Maxim.

Hi, Marc. Hi, guys, Tiago. It’s Jason McCarthy for Jason Kolbert. Marc, can you describe for us the scleroderma market in Japan where - I know you have units being placed in Japan for stress urinary incontinence and I was wondering what the feedback has been from KOLs and physicians there about adoption for an indication like scleroderma. And just a follow up to that, it was mentioned that you’re thinking about going into China and Southeast Asia, what’s the scleroderma opportunity is in those markets as well?

Hey, Jason. Thanks for the question. It’s a good one and it’s one that’s pretty central to our planning right now. So in terms of scleroderma in Japan, the number is around somewhere between 5,000 and 15,000 cases in terms of prevalence. We are in active discussions with the key KOLs in that market and there is a relatively small number of centers that are centers of excellence for scleroderma, sort of mirrors what we are seeing in the US. And that’s great thing about this opportunity just from a - for company like ours to be able to address the key treatment centers are going to a small number of centers. It looks like in Japan, it’s between five, maybe up to 10 centers and you could pretty much capture the entire market there. So I think there is a market opportunity that’s there that’s consistent with what we see in Europe and the US. There is a similar sort of well-off strategy that one could envision in terms of heading the centers of excellence. And then finally on the regulatory and business model side, although in the past we have been focused on selling devices and consumables, the new Regenerative Medicine Law and potentially orphan designation, it looks like that could really come into play and help speed our ability to enter that indication there and begin to treat patients. In terms of China and Southeast Asia, right now we are - the rights to China with our partner Lorem Vascular, as Tiago said, we are negotiating with them to amend their contract. I think until we get that contract we negotiated, it will be tough to make much progress there, but if you add the territories encompassed by the current loan agreement and there is opportunity on the scleroderma side, but we will have to work through those on an individual basis country by country.

Right. And if you have the SCLERADEC-II study that’s ongoing now, the pivotal study, in Japan - sometimes in Japan, they really want the study or a study to be conducted in Japanese patients there. Do you have plans to move into Japan to do a clinical study, so you can have adoption for scleroderma, or would you expand one of the ongoing studies in the US over to Japan just to include maybe one center, so you can get some traction with Japanese regulators for scleroderma?

Yes, we are crafting out that strategy right now. Our plan right now is to leverage published data from Europe, take that to Japan and then do a Japan-specific study. There is really no advantage time wise or other wise to look down a broader study in our view. It should be - it’s considered a niche orphan indication in Japan and we think based on discussion so far with PNDA, similar to discussions in Europe and so forth, given the indication like that, we wouldn’t need a very big trial, and going and doing a direct Japan trial would be a way to go.

Okay, great. Thanks Marc.

Thanks. Appreciate the question.

Our next question comes from Brian Matthews with Payden & Rygel.

Thank you. Hi, guys. Really good call. Very encouraging. So I have two comments and financing question. So regarding the reverse split or your Plan B, as you call it, it’s obviously not something as I would call as rational, but it is the right thing to be prepared to do. I think that’s a no-brainer. And if you need to do it, I think giving the Board some flexibility on the split ratio is exactly the right thing to do. Regarding operational performance, really impressed with the improvement, keep it up. So my question is about financing needs. Have you considered a rights offering? I mean, if your capital needs are limited, what it now seems to be and you’re getting real close to put the ball in the end zone, why would you let existing shareholders participate at these levels as opposed to doing anything else for capital? Thanks. I will get back in queue now, and again nice job guys.

Hi, Brian. I appreciate the comments and the question. Is the rights offering a possibility? The answer to that question directly, it is a possibility. It’s one of the portfolio of things we’ve looked out over the last year or two as an opportunity. We have had some interest consumer that you have articulated. There are some good things and bad things about it. The good things are that it’s non-dilutive to participants, it’s basically the most democratic way of doing an offering. Of course, we just - we spent so much work cleaning up our capital structure at the end of the year, it is one thing that maintains that clean capital structure and then allows existing shareholders to benefit from where we are today. So I guess I would agree that maybe a company like ours where I think we have an increasingly defined gap between where we are today and getting to profitability as we execute on the strategy. It could be a good alternative for us. So no decisions. I think we will take a deeper look at that. I think we are open-minded, but I think right now, we are just going to focus on the execution, be the sales and maintain the cost controls.

Our next question comes from Steve Brozak with WBB.

Hi, good evening gents. I would like to go back to one of the items that you started to talk about, specifically the approach that you take, everyone has always really looked at Cytori on a device side, but in terms of what you’re looking at on sclero and everything else, you’re actually migrating to a therapeutic side. And can you talk about that specifically vis-à-vis how you would work that with Japan? And also specifically, because you are obviously interested in non-dilutive financing. If you were to partner with someone, in theory how does that lend itself well to bifurcating different indications with potentially different partners? And I have one follow-up after than please.

Hey, Steve, I appreciate the question. Obviously, you’re doing your homework, you know the company well, and it’s a great question. So let me start off by saying, you’re absolutely right. So I’d say over the last two years for a lot of reasons, and I am happy to discuss those in greater detail. We migrated the company away from more of a razor blade device oriented model to a more therapeutics oriented model. Some of the high level reasons are the regulators are pushing us in that direction. We don’t fit nicely into the device pattern because you look at the FDA, they regulate the cell therapy and the device under the PMA umbrella, but they largely get the device in the safety and the operations. What they really care about is the safety and efficacy of the cell therapy. You see that in Europe, we have an orphan drug designation in Europe and then now as we really kind of begin to dog-ear the pages on the new regenerative medicine law, it's pretty clear that we have an opportunity there on the regenerative products side, which is really geared more towards cell therapeutics, not devices. So the global regulatory wins are growing in that direction. As you look at some of the indications that we've developed over the last couple of years, scleroderma for example, they limb themselves nicely to that model. In other words, you can have a small number of centers that can create, manufacture cell therapies at the bed side or nearby the bed side. And then also I think it helps us on the pricing side and I think there is a cash A and a benefit that comes with a highly differentiated cell base therapy. We can - our model really lends itself nicely to that on an autologous basis, and so, we're really moving aggressively into that space and you mentioned Japan, absolutely, it's because we increasingly talk to PMA and John gets closer and closer to them, as they understand kind of the, where our technology fits in the picture, we see that that approach is the proper approach and the most rapid approach to really get to the significant market opportunities in Japan. And I think you had a follow-up right, Steve?

Yeah. I do. Okay. So you're going out there and in terms of potential partnering, the potential partners that you would be interested in working with are probably the people that are familiar with the indications you are looking at. What kind of therapies or - even if they’re palliative therapies, what are they looking at and what kind of compensation, what kind of rates are they getting for that and how would you go out there and very, very briefly explain the value proposition obviously or what you’re offering and why they would be interested in terms of partnering with you and I'll hop back in the queue? Thank you.

Okay. So little bit related question, what are they seeing us, I think on the big pharma side, Astellas, as a shareholder, we talk to increasing amount of big and medium-size pharma about the technology. I think what you are seeing from them is they’re looking for highly differentiated new technology platforms and opportunities, and I think we very much fit into that. I think those types of companies with the profile I just mentioned like this more therapeutic drug oriented approach there, is someone’s - when comfortableness with the device space approach. In our partnering discussions, we've got a standard approach to how Cytori handles the device related component and the pharmaceutical partner would handle the typical things like sales and marketing, reimbursement, KLL management, and so forth. So I think we've got a really nice approach on the partnering side. I think there are three things that emphasize I terms of this partnering discussion, uniqueness of our technology, market size and stage of development. And I think with scleroderma, we got all three and then in our partnering discussions with Japan, I think we also have all three. So I think we've got a lot to add to the discussion, and I think our ongoing growing discussions with partners has really allowed us to sort of refine that message and better adapt our partnering approach to those types of companies.

Great. Obviously looking forward to the progress that you make and obviously the next call should give us a whole lot more. Thank you.

[Operator Instructions] Our next question comes from Ed Woo with Ascendiant Capital.

Yeah. Thanks for taking my question. A quick housekeeping question, what's the share count we should be using going forward? Tiago Girão: Hey, this is Tiago here. We have right now about 195 million shares outstanding. That is not fully diluted, that's the number of shares that we have outstanding as of the end of the year and those I believe were disclosed in the press release that we just issued. The other thing that is important for you to know is that the fully diluted share account is about close to 207 million shares and that was a decrease from the last call we had and the last 10-Q we had as a result of the restructuring of the warrants that we did at the end of December. These - they gap between the fully diluted today and the outstanding that we have is primarily related to plain-vanilla once, 3.5 million that we have as well as some options in RSA that were outstanding at the end of the year. So I think we’re are good from that front, but if you have any follow-up, I'm happy to take it.

Great. And then you guys mentioned earlier about guiding conservatively for your MAP program in Europe and what are some of the big challenges to probably to reach the potential upside and what are the market opportunities you think you guys can get?

Okay. It’s Marc. On the MAP program, I think, at the caveat, everything we say about that because we are just getting it up and running right now and so our operating experience on that particular thing is limited, however, to make that determination about what we can forecast for 2016 and then some of our projections going forward, we take in what we hear from Idis, our MAP partner who is the best in the world at these programs in Europe. We look at the feedback, we get reverse increase from patients and doctors, we keep the running tally of who is interested in the MAP program, we feed that to Idis. That gives us a sense of demand. And then, we talk to doctors and we know kind of what the challenges they're having in treating these patients, and how our technology potentially fills that gap. So what we know from Idis is that their party line is you can generally get an address about 10% of the addressable market in your compassionate use managed access program. So if it’s 100,000 patients, maybe 10,000 patients in scleroderma is a reasonable guess. Now, having said that, we think that's probably aggressive for our case, but it is a benchmark. Our growing list of potential patients and doctors is - pretty much grows on a daily and weekly basis. So we’re continuing to feed that over to them. On the kind of TE operational elements of that relationship, right now, we are at a phase where Idis, much like a licensee would put all the things in place to commercialize the technology. They are doing that right now. Also, as part of that, they are reaching out to every single component authority in Europe and figuring out what the key details are for this particular technology. They pretty much already know about it, but to get on record feedback from those competent authorities that would allow us to tweak our response, see what countries to emphasize which ones should be emphasized, that's all happening in the background and at the same time, we’re giving lists of patients and doctors to them and then they will take over that key marketing responsibilities from our side, we will be at all the key meetings, primarily in Europe, but around the world talking to doctors, talking about the technology and not only providing information related to the MAP program in Europe, but also planning for what we ultimately have planned in the US and in Japan.

[Operator Instructions] Our next question comes from David Musket with ProMed.

Thanks and appreciate all the details here. Now you have different perception of the way the street felt about your OA data than you did, and to the extent that that's one of your prime candidates for a non-dilutive partnering deal, do you have any sense as to when we might see a little bit more of the metrics from that trial that would help us get on the same page that you are?

Hi, Dave. Thanks for the question. Yes. So I think we'll be able to talk publicly about the trial after we've reviewed the 48-week data and just so to bring everyone up to speed, so in the ACT-OA trial, we've built in a 24 week pre-specified end point at that time and we looked at the data. These sorts of pre-specified end points are, it's not unusual to build those in, and but in particular cases, where the trial is heavily based on patient reported outcomes, it becomes critical to maintain the blind and integrity of that data, because the key investment after the trial is going to be 48 weeks, which is probably around the Q3 timeframe and we will see that data and make that public. So we've got to maintain the integrity of the data. Yeah. We could put all the data out there, we contemplated that and discussed that internally and just felt like that it was the best thing for the trial and ultimately for the company to maintain a limited blind, report the top level data, which frankly was - even though it was early, it was encouraging to us as to whether that’s a cell fact [ph] above and beyond what we saw in placebo. So just to summarize, yeah, it, looks like it's going to be, but as we look at the 48-week data, we will evaluate the data, reveal that publicly and then we will have our decisions ready about how to move forward with the Phase 3 or further development work.

Thank you. Do you expect that there will be any possibility of partnering that project before the 48 week data is available?

Well, hard to know. Here is my guess. A key benefit to us of having a 24-week data is that we can now have at least a limited un-blinded set to go, talk to partners which is exactly what we are doing. So the partners we have been talking to prior to that knew the basis of putting that trial and that data is being shared under CBA with those partners and we think we can use that to help prepare partners for discussion in the 48 week data. So I think it does accelerate it. However, I think in terms of how I would prioritize our partnering discussions, first and foremost is to identify European partner for scleroderma. We think that's where we have the greatest chance of getting a significant therapeutic partnership. Number two is Japan, given all the other things that are going on over there in our history there and the data, and so forth. And then I think probably third in that is OA, I think it's possible to have a partner go for that 48 week data is available, but I think that is probably less likely than not, I think the partner is likely to wait until the 48 week data.

That concludes today's Q&A session. I will now turn it back over to Dr. Hedrick for any closing remarks.

Well, thanks, everyone. It's been a long call. I appreciate the Q&A and appreciate your interest in Cytori. It's obvious to the management and to the board and hopefully we've done a good job in communicating to you that the company is very well positioned, better positioned than ever and I’m more confident than I've ever been that we are absolutely on the right track with the technology, with the team that we have in place, with a growing track record of execution and getting things done, and most importantly, we have the will and the resistance to get this awesome technology to market. So we thank you for your attention again and have a good evening. Thank you.

Thank you. This does conclude today's conference call. Please disconnect your lines at this time and have a wonderful day.