Good day and welcome to the Rockwell Medical Second Quarter 2017 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Paul Arndt with LifeSci Advisors. Please go ahead.

Thank you, Don, and good afternoon, everyone. Thank you for attending Rockwell Medical's second quarter financial results conference call. I'm Paul Arndt with LifeSci Advisors. On the call this afternoon are Rob Chioini, Founder, Chairman and CEO of the Company; and Tom Klema, Chief Financial Officer. Before we begin, I'd like to remind everyone that various remarks about future expectations, plans and prospects constitute forward-looking statements for the purposes of Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Rockwell cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated. Among the factors that could cause actual results to differ materially include risks and uncertainties related to Triferic, including the Company's ability to successfully commercialize Triferic, manufacturing capabilities and other risk factors identified from time-to-time in reports filed with the SEC. Any forward-looking statements made on this conference call speak only as of today's date, Wednesday, August 9, 2017, and the Company does not intend to update any of these forward-looking statements to reflect events or circumstances that occur after today's date. This conference call is being recorded for audio rebroadcast on Rockwell's website at www.rockwellmed.com. All participants on this call will be listen-only. The call will be followed by a brief question-and-answer session. I'd now like to hand the call over to Rob Chioini, Founder, Chairman and CEO of Rockwell Medical. Rob, please go ahead.

Thanks, Paul. Good afternoon. Thank you for joining us. On the call with me today will Tom Klema, our Vice President and Chief Financial Officer. We had a very busy quarter and have a number of important updates for you. We also want to be sure our shareholders have the information needed to better understand the strategy we are pursuing, which management firmly believes is the right strategy. First, let me just cover the highlights from the quarter's financial performance. Sales were $13.2 million compared to $13.4 million in Q2 2016. Gross profit was $1.5 million, unchanged. Net loss was $7.1 million or $0.14 per share compared to $5.4 million loss or $0.11 a share in Q2 2016. This increase in loss was the result of increased in non-recurring operating expenses which were primarily due to arbitration, litigation and Annual Meeting-related costs. Cash and investments were $43.2 million as of June 30, 2017. Although we burned cash during the quarter, we have adequate cash to execute our strategy. We anticipate that with positive developments for either Calcitriol or separate reimbursement for Triferic, our cash use will quickly be curtailed and we will be able to generate positive operating cash flow. Regarding Triferic, as most of you know, we are pursuing separate reimbursement for it. This is a strategy choice that we have very consciously made. The simple fact is that separate reimbursement will ensure that there will be broad adoption of Triferic by providers and doctors, and that all patients will have access to its clinical benefits. Triferic can improve patients' lives, and importantly, reduce overall health care costs by decreasing the complications associated with the severe anemia that patients suffer from. We are working hard to secure the proper reimbursement. I have made many trips to Washington, D.C., and…

Thank you, Rob, and good afternoon. I'll be covering the financial results for the second quarter and the first six months of 2017. We will also discuss our capital resources and liquidity. On our sales in the second quarter were $13.2 million, $200,000 or 1.6% last compared to the second quarter of last year. Our domestic concentrate business sales were $200,000 less due to lower sales volume. Our international sales were $100,000 higher in the second quarter of last year. Year-to-date for the first six months, our sales were $27.8 million, an increase of $800,000 or 2.8% over to first six months of last year. Our domestic business increased $800,000 over the first six months which was due mainly to onetime additional orders from Baxter. Our international sales were at the same level as the first half of 2016. Our gross profit in the second quarter was $1.5 million, unchanged from the second quarter of last year. Gross profit margins were 11.3% in the second quarter compared to 11.1% in the second quarter of 2016. Gross profit in the first six months of 2017 was $3.9 million, an increase of $700,000 or 21.1%. Gross profit margins were 13.9% compared to 11.8% in the first half of last year. The gross profit increase was partially due to higher sales of our concentrate products and partially due to lower cost as a result of the payment of $300,000 in value-add taxes paid in 2016 related to the licensing payments received following the execution of our license agreement with Wanbang Pharmaceutical. On SG&A. Our SG&A expense during the second quarter of 2017 was $6.5 million compared to $5 million in the second quarter of 2016. The $1.5 million expense increase was primarily due to the higher legal cost relating to outstanding litigation and…

Thank you. [Operator Instructions] And we will take our first question from Charles Haff with Craig-Hallum.

Hi guys. Thanks for taking my questions. Maybe we could start off with where you left off talking about working capital. So you had a $2.8 million outflow in Q1 and a $2.6 million outflow in 2Q from changes from working capital in assets and liabilities. Where do you think that may end up in the back half of this year?

Well, Charles, I think we will continue to invest in research and development. And so we're going to continue to expend probably about the same amount in the back half of the year as we did in the first half of the year in R&D. And on the inventories, I anticipate a modest build in inventories as we translate the API into finished product for Triferic. And with Calcitriol, we will be building some modest amount of inventory. So the cash burn in the second half of the year, I would expect to be substantially less than what it's been in the first half of the year.

Okay, and specifically on the changes in the assets and liabilities, do you expect those to be similar in the second half and where they were in the first half?

Yes, I think the inventories will not grow too much now. That was a big user of cash. And then some of the liabilities that we paid down in accrued liabilities and accounts payable, those should not repeat gain in the second half.

Okay. Okay, thank you. And then you talked about the arbitration with Baxter. Congratulations on getting that behind you. I was wondering, were there any Baxter nonrecurring payments in revenues this quarter? And if so, how much those were?

There were no unusual payments in the quarter. So I would expect the revenue to look very similar going forward.

Okay, thanks Tom. And then Rob, I had a question for you on the add-on reimbursement. I think you mentioned on the last call that you were working with CBO on trying to get a CBO score, Any new developments on that front in the last few months?

Yes, I mean I don't recall mentioning that, Charles. The most I can say is we've had some - like I mentioned some really good meetings with the right people. Those meetings are ongoing, that dialogue is ongoing. We've covered everything, really, from A to Z. And that's probably the most I can say about it right now.

Okay. And then I may have missed this in the past, but this is the first time that I've heard you talk about Triferic price, the way that you characterized it on your prepared remarks, in the low double-digit dollars per treatment. I'm just wondering how you kind of established pricing level if you can just kind of walk me through the steps in terms of the value and quantifying the value that it offers. And any idea what your cost of goods sold may be to produce Triferic to generate this type of revenue per treatment?

Yes, that's a great effort for the question, but I can't really - I'm not really in a position where I feel comfortable talking about how we got there or what the costs of goods are. But as we move forward, we can certainly give you some more clarity on that.

Okay. I think that does it for me. Thanks for taking my questions.

Thanks.

[Operator Instructions] It appears that that's all the time we have for - budgeted for today's call. So at this time, I'll turn the call back to Rob for any closing remarks.

Well, we appreciate your support and we look forward to giving you updates as we get them. Thanks.