Robert Gershon - Chief Executive Officer Jay Ewers - Interim Chief Financial Officer Jack McCarthy - Chief Commercialization Officer.

Charles Haff - Craig-Hallum Capital Group.

Good afternoon and welcome to the Bovie Medical Corporation Second Quarter 2015 Earnings Conference Call. All participants will be in listen-only mode. Hosting today’s call will be Robert Gershon, Chief Executive Officer of Bovie Medical Corporation. After today's presentation, there will be an opportunity to ask questions.

Please also note this event is being recorded. Before we begin, I would like to make the following Safe Harbor statement. Today's call will relate to Bovie's second quarter 2015 earnings results and will contain forward-looking statements regarding predictions about future events.

Forward-looking information is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected.

Although the company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved.

The company assumes no obligation to update or supplement any forward-looking statements, whether as a result of new information, future events or otherwise. With that, I would like to turn the call over to Mr. Robert Gershon. Please go ahead sir..

Thank you, [Denise] and good afternoon everyone. We appreciate your participation in today’s call to review our second quarter operating and financial results and discuss new development at Bovie Medical. With me today is our Interim CFO, Jay Ewers; and our Chief Commercial Officer, Jack McCarthy.

At the end of our prepared remarks all there of us will be available to answer question. This was a solid quarter for Bovie, in terms of overall performance.

Revenues increased by almost 5% year-on-year and showed strong sequential improvement over first quarter level thanks in part to the progressive pickup in OEM contract revenues that we had anticipated. J-Plasma sales were $170,000 for the second quarter significantly ahead of last year's level but below our expectation.

This was due to the increasingly long Hospital Value Analysis Committees or VAC approval process which now takes from 3 months to 9 months. And even after the product is approved the paperwork is such that the first purchase order can take another month or so to receive. This evolving and an elongated sales cycle is not unique to Bovie.

It is industry-wide and being experience by nearly all medical device companies regardless of size. Fortunately there are several key data points that confirm that this quarter's lower-than-expected sales with the consequence of the timing issue. First in the month of July J-Plasma shipment were $237,000 representing a very strong start to Q3.

In fact most of this revenue was derived from recurring orders as we have now reached the point of having daily J-Plasma sale. While we do not plan to make a practice of reporting month J-Plasma sales we consider this an important element in our discussion of Q2 results.

Second we received 42 scrub purchase orders or scrub PO's in the first six months of this year, compared to just six in all of last year, scrub PO's are payments for product used by surgeons while the product is still under back review and as such represents an early indication of future sales trend.

Third there were 76 surgeons using J-Plasma at the end of the second quarter, up from 41 at the end of the first quarter. In fact every surgeon that has entered our sales funnel has either turned into an active user or is still in the process of trialing. The fact that no surgeon to his trial the product has rejected adoption is unprecedented.

And fourth, in the second quarter we saw a 42% sequential increase in generators and use which speaks to the progressive adoption of our technology. Taking all of this together it’s clear that J-Plasma is gaining traction and we are very bullish about the growth prospects in the second half of this year.

There is a robust pipeline for the accelerated commercialization of J-Plasma that we are developing systematically to a broad range of initiatives.

For example at the end of the second quarter J-Plasma had been approved by 42 VACs and was under review by an additional 46 VACs bringing the total to 88 VACs that have approved the product or are in the process of approving it. It is noteworthy that our acceptance rate to date has been 98% with one VAC rejecting it but reconsidering it now.

So with nearly a perfect batting average our VAC acceptance rate remains very high. We are taking whatever steps we can to reduce the sales cycle including the July launch of a [VAC pack] sales tool that based on our experience organizes all the relevant materials VACs tend to need for approval in one easy-to-use format.

Also independent white papers help facilitate the VAC approval process.

The latest one was published last week on the economics of treating female chronic pelvic pain, which affect 15% to 20% of reproductive women and it concludes that "J-Plasma enables improved patient outcomes at a lower cost than other available devices" Additionally we are working towards selling deeper into existing accounts this is why we will now be reporting generators in use as a key metric that will eventually replace the number of ordering accounts.

Given the longer sales cycle we are directing our sales organization to focus on selling more products to existing accounts, while simultaneously bringing on new accounts. One generator tends to support up to two surgeons using J-Plasma on four cases a week. Thus as J-Plasma usage increases in a given account, so will the number of generator sale.

At the same time we are using better targeting methods to make sure we are allocating our resources to the top-tier surgeons and hospitals that are performing high volumes of relevant patient procedures.

Also we are branching out with respect to targeted markets as it is clear that J-Plasma is addressing in unmet need and is being recognized by top flight surgeon in a broad range of specialties for its precise dissection, coagulation and ablation capabilities.

Based on the tangible interest that J-Plasma has garnered with surgical opinion leaders we are expanding our target specialties over time to include cardiovascular, cardiothoracic and urology. To facilitate this rollout to new specialties we have established a medical advisory board which we expect will have 6 to 9 surgeon members.

The first member is Dr. Vipul Patel a world-renowned urologist and leader in robotic surgery who is the Medical Director of the Global Robotics Institute and the urologic oncology program for the Florida Hospital Cancer Institute. Dr.

Patel was quoted in today's earnings release on J-Plasma’s potential to be of tremendous benefit to patients undergoing surgery for prostate cancer as well as it being one of the most significant innovations in energy in more than a decade. We are honored to have Dr.

Patel on our Medical Advisory Board and we expect to have news on additional members in the coming weeks and months. And lastly we recently signed on two new Integrated Delivery Networks or IDNs as customers. With contracts in place at these hospital systems, we now have the ability to sell into their combined 21 member hospital.

Again the sales cycle can be long because each member hospital has a VAC process. But these networks provide us access to a broad base of potential surgeon users.

IDNs are important to our overall strategy and the fact that we have secured contracts with the first three targeted IDNs is another data point illustrating broad-based acceptance of this transformational technology. On a parallel track with the commercialization of J-Plasma or our efforts to build out the core business.

In today's earnings release, we mentioned two new products that launched in the second quarter and we expect to continue to expand our product portfolio both organically and through business development relationships with other manufacturers.

In fact, we have created a strong cadence of product launches that will occur throughout the balance of the year and beyond. We will continue to leverage the Bovie brand as it is well regarded and well-recognized giving us the ability to enter adjacent market and expand internationally.

Finally, our OEM contract work continues its progressive growth and is expected to show positive year-on-year sales comparison in the second half of this year. This is another lever that we use to further increase our core business at a sustainable pace.

At this point I will turn the call over to Jay Ewers for a financial review of second quarter results.

Jay?.

Thank you, Rob. Revenues for the second quarter of 2015 showed positive growth from a year ago of 4.7% to $7.3 million led by strong growth in the sales of electrodes and benefiting from higher J-Plasma sales.

Gross margin for the quarter was 43.2% compared with gross margin of 39.2% adjusted for inventory write-down in last year's second quarter and more favorable product mix was the key factor in higher gross margin. We see gross margin continuing at about these levels for the next few quarters and then expanding as J-Plasma sales ramp.

Operating expenses for the second quarter of 2015 were $4.7 million down slightly from the first quarter, but up from $3.6 million in the year ago quarter. Approximately 55% of this increase in OpEx is directly tied to the ongoing role out of J-Plasma.

Providing more detail on this quarter's operating expenses, our R&D expenses totaled $505,000 up from $318,000 in the second quarter of 2014. We have significantly increased our R&D capability in the last 18 months including adding to headcount.

The strengthened R&D program is directly contributed to recent innovations in J-Plasma including the development of the Pistol Grip and Bovie Ultimate. Professional services totaled $315,000 from $287,000 in the comparable quarter in 2014. Salaries and related costs were $1.9 million up from $1.4 million.

As in previous quarters this increase reflects the growth of the organization and particularly the expanded direct sales team for J-Plasma. SG&A for the second quarter was $2 million up from $1.6 million in the year ago quarter.

This increase is tied to the ongoing J-Plasma commercialization effort including higher expenses for advertising and marketing, travel and training programs as well as variable compensation tied to increase sales.

As we stated in the call for the first quarter of 2015 we expect our current level of operating expenses to remain relatively constant for the rest of the year. The one major variable will be commissions tied to higher J-Plasma sales.

Our operating loss for the quarter was $4.5 million compared with an operating loss of $1.7 million in the second quarter of 2014.

Turning to below the line items, as we discussed in our last results conference call, the conversion of the Great Point Partners preferred shares to a similar security without warrants and certain preferences has reduced the volatility in our below the line expenses significantly.

This quarter we recorded a non-cash gain of $90,000 related to mark-to-market accounting for placement agent warrants compared with a non-cash gain of $1.5 million in the year ago quarter.

On a GAAP basis, our net loss for the quarter was $1.5 million or $0.06 per diluted share compared with the loss of $0.07 per diluted share in the second quarter of 2014. Turning to the balance sheet, we ended the quarter with $14.1 million of cash compared with $15.4 million at the end of the first quarter.

The strong cash position combined with the positive performance of our core business gives us the resources to support J-Plasma throughout the commercialization process. With that, I’ll turn the call back to Rob..

Thanks Jay. We are looking ahead to a strong second half in both our core business and in sales of J-Plasma. Core business growth should benefit from an expanded product offering continued traction in markets like animal health and new relationships with international distributors.

Additionally we expect to see a significant ramp-up in the OEM business has several contracts enter the production phase. With respect to J-Plasma the business metrics we discussed earlier in this call point to a very strong second half sales growth. And we have seen the initial evidence of this in July shipment.

While we have reset our initial revenue targets based on the timing issues that impacted Q2 as we still expect to achieve a solid annualized sales run rate heading into 2016. Additionally we expect to exit 2015 with approximately 100 generators and use and 200 surgeons using J-Plasma. Denise at this time, let's open the call to question..

Certainly Mr. Gershon. We will now beginning the question-and-answer session. [Operator Instructions] The first question will come from Dave Turkaly of JMP Securities. Please go ahead. Mr. Turkaly, your line is open sir..

Hey I am sorry, can you hear me..

Yes, sir..

Yes..

Can you guys hear me?.

Yes, Dave we could hear you..

Okay I apologize for that..

No problem..

You did a good job are explaining at the on call but jus to be clear, obviously the timing delay here but in terms of your enthusiasm for the product J-Plasma and given even the sort of the expanded areas is expect to bring it. No change in the long-term outlook without the fairway to summarize….

Yes, absolutely our enthusiasm and conviction has never been higher there's just no question about it..

And when you look at some of the other areas you plan on bringing, can you I just walk us through that kind of incremental sales force who are you going to tackle some of these sort of new areas..

Sure, let me I will go head and start and certainly invite Jack to chime in with any additional thought.

So it is always been our vision to focus our sales organization on our initial target first and once we gain a level of momentum we've always talked about our secondary list of targets which is been in all of our investor decks over the past year or so.

And we plan on deploying the existing resources to these new specialties at this time and we will begin to ramp the sales force on as revenue continues to wrap. So that part of the strategy has not changed we've always envisioned this expansion into the other areas..

And Dave I expand upon that as well. When we will recruit our current sales team we recruited professional sales of multiple years of experience on average about 15 years per rep and most of these reps are come from larger companies that have vast experience in multiple specialties. So they are quite capable of going from GYN to the specialties..

Okay and I guess we look at those last one if I could..

Sure..

What indication are you most excited about I mean obviously in a gynecology we notice I am really specific areas where it seems to work amazing well. As you look at some of these new areas you are heading into the one that highlight as particularly were J-Plasma might be superior particularly strong versus what’s used today..

Yes, I would go ahead and turn it over to Jack to provide some specific color but we are particularly excited about the urology's space which I can expand upon in a moment and the cardiothoracic and cardiovascular so one Jack what do you talk about the cardio space first..

Yes, cardiovascular we’ve done some early cases in pediatric cardiovascular and the outcomes have been very favorable to surgeons are very pleased with the level of energy they prefer the safety aspect of it. It’s also faster than their current means and they are using a lot for dissection and cutting through adhesions.

And in pediatric cases and many times they are phase procedures. So they have several different procedures over time. So there's a lot of adhesions that are formed and our technology is ideal for going through adhesions. So they really like that in addition to some other potential benefits to the energy around the heart reducing arrhythmias.

So there's a lot that we still have to study but the early cases of very favorable for that and we also anticipate a very good results in cardiothoracic. And right now we are working with some thought leaders on developing the right procedures hold off on commenting on those.

But the early indications are that’s going to be another really big space for us as well..

Yes, and I will talk a minute about urology. So you heard during our prepared comments that Dr. Vipul Patel has joined our Medical Advisory Board and I’ve been working quite closely with Dr.

Patel for the last several months on as he has been really educating us as a company as to the areas that he believes J-Plasma has the potential to really transform several procedures especially the radical prostatectomy. So it's way too early to comment very specifically on it, but for those of you unfamiliar with Dr.

Vipul Patel is probably worth doing some research he is the number one robotic surgeon from an experienced perspective in the world with over 8,500 cases and I've been in the room with him for many, many days of cases and he really sees some pretty significant potential.

So stay tuned as he continues to investigate and work with us for much more details. But guess what we’re excited about those are the big three next areas and of course none of this takes our attention away from our primary target that has been the focus since the launch of J-Plasma.

So this is being done without attracting from our momentum with GYN and plastics..

Okay, thanks for all that color..

Yes, our pleasure..

The next question will come from Charles Haff of Craig-Hallum. Please go ahead..

Hi, guys.

Can you hear me, okay?.

Yes, we can hear you perfectly..

Okay.

So, on the OEM business in the second half of 2014 what were those revenues?.

Yes, Jay what is your comment?.

697,000, Charles. .

Okay and your comments on the prepared remarks were that you expect them to be above that level in the second half of 2015? Correct..

Yes, that is correct..

Yes, and it’s because of you know why we so certain of that is because of where we are in the process of production. So some of these contracts go from a development space, and then which has a set amount of revenue and then the uptick in revenue comes when we move into production.

So it's fairly predictable and that's why we commented on what the second half looks like..

Okay and Jay what was the diluted share account at the end of the second quarter? Please. .

Sure the diluted share count was 24,435,000..

Great, thank you.

And just for a minute on the VAC process I understand that the process is being a little bit extended for all companies and yours in particular you know at 3 to 9 months what are some of the strategies I heard you talk about the VAC pack, obviously you're moving into some other specialties like cardiology or cardiovascular and cardiothoracic and urology, which tend to have to significant influence with the VACs.

Can you talk a little bit about how you know having those specialties trying out J-Plasma maybe helps or maintains the VAC timeline that you're forecasting of 3 to 9 months?.

Yes, sure it is, 3 to 9 months is a wide range but it’s an appropriately wide range because it is so dependent on the surgeon champion and their influence at hospitals which as you know Charles is becoming less and less across the board. There was one time that the surgeon was king and the process was short.

Now there are so many checks and balances in place, it tends to be this elongated process.

So our approach to shorten it in to have a multi-pronged approach so we have our surgeons and a diversified group so our thought processes of multiple specialties are asking it, it just makes the job at the hospital easier and it could potentially streamline the process.

Also we mentioned in our prepared comment that we watched the backpack and what we really love about this backpack and it's taken us a while to get it fully developed, so that it really resonates with the VAC committee.

It’s essentially assembling all of the questions because we have so much experience having gone through so many of these assembling all of the information in the format that they need to quickly get to the information they need to make a decision.

So those are two of the steps that we've taken and Jack I don’t know if you want to add other steps to help shorten that sales cycle, the VAC process..

Absolutely, Rob had commented earlier about our success with three IDNs and that's another strategy that we are implying to reduce the sales cycle, so it’s a top down, bottom up approach where we create demand at the surgeon level with the reps in the field and to the management team we call on the IDNs and supply chain personnel to ensure contracts so that this sales process is streamlined so that when the rep gets the doctor to the back VAC there are contracts in place, pricing is set and it streamlines the process..

Okay, great..

Charles I’m sorry to interrupt one other thing just came to mind is something else that really resonates with the VAC committee and this one takes a little time, but we commented on this publicly for quite some time is clinical studies and clinical papers.

Now these are different from the white papers of course we are moving forward on the white papers, but the clinical papers that over time as you follow patients have a very influential effect.

Now of course when you're in the early innings and you don't have the six or eight months to follow patients they don't expect you to have it, but that itself makes the process a little bit longer.

So to that end we have and have for quite some time clinical studies that are underway that we expect will help shortness this sales cycle really in 2016 because the patients have to be followed for the postoperative analysis and data. So that is also in the works..

Okay, thanks.

And just to clarify the IDNs is it three IDNs with 21 member hospitals or two IDNs with 21 member hospitals?.

Today, we’ve talked about two that had 21 hospitals and there is a third IDN as well that have 12 hospitals..

Okay, great. Thanks Jack. And then in terms of the generators in use I appreciate you giving additional color with that metric so you ended the quarter with 34 and your goal is to end the year with 100 that's a pretty significant ramp.

Can you help us to get comfort with that significant ramp and give us some color under these Ultimate or GS100s or a combination. Just help us understand how you kind of expect that hockey stick in the conviction that you have with 100 by the end of the year..

Yes, absolutely. So the 100 is what we are approximating, we do believe we have a path to 100. It will be a mix of Bovie Ultimates and GS100. We are actually expecting probably more Bovie Ultimates than GS100, but nonetheless this is why we shifted our strategy, adjuster our strategy a bit to sail deeper into existing accounts.

So why do we have such conviction because as J-Plasma usage increases in an individual account, word spreads pretty quickly. It actually goes pretty viral internally within a hospital. So as there is increasing demand and a VAC process that has already been concluded. We feel that we can accelerate that ramp in the existing accounts.

Now having said that, we are not taking our eye off of adding new account that is still a critical part of our strategy, but selling deeply and widely there are existing accounts is in part how were going to get to our goal of 100 by the end of the year..

Charles I would add again with 34 that we have 88 in processes we've got back approvals of 42 and VACs in progress of 46. So the total of 88 that are process right now that you chose a pathway to 100..

Okay it sounds good.

And then my last question is on the cardiovascular opportunity I understand you with the previous question are do you want to get into too much granularity on the electrophysiology possible opportunity there I assume that's in AS you know that's tends to be a different call point then what you have right now have you thought about or considered pursuing a partner strategy distribution strategy if you move forward with this electrophysiology opportunity or how should we can think about you know from your resource standpoint in your sales expertise.

How would you maximize that opportunity? Thanks..

Yes thanks. Thanks for the question its a great question and the space of cardiovascular is different obviously then GYN and so forth.

Our one-third of our sales organization today is trained in cardiovascular and cardiothoracic we are putting together significant training materials to train the balance of our sales force so the way we envision this going and in fact the way it is going is we will first deploy a third of our sales force that’s fully trained.

Then we will deploy the balance of the sales force over time and as we do this that third who has very, very deep and wide experience in this space and really own so many of the critical relationships in the space they will serve to ensure because cardio is a different animal they will serve as proctors as we rollout or as the balance of the sales force comes through their learning curve..

Okay have you evaluate or consider partnering strategy with the EP call point or are you pretty firm that you'll be able to go direct here to be successful..

Yes, right now again our focus is in cardiovascular EP is like a different call point and we don't have enough trend or experience a right not even comment on what our plans might be there..

Okay thanks a lot of guys..

Okay thanks Charles..

[Operator Instructions] The next question will come from [indiscernible] of AIGH Investment Partners. Please go ahead..

Hi, Rob and Jack. Quick question on this quarter’s J-Plasma it sound like you come most of that was recurring revenue disposal am I understanding that correctly..

Of course so here is the deal yet thanks for your question. We don’t report the breakdown between generator sales and hand pieces.

Having said that though the July number which is a number that is in access all of last quarter what were so encouraged by is that July number is made up in large part to recurring waters and I reference during the prepared remarks that I am sorry I had to offer second there.

So I referenced these are mostly recurring orders for four July and I referenced that we were at the point at its a milestone really of daily sales and that's what gives us so much confidence in the strategy that were executing is working.

So we are at the point of daily sales most of that revenue is recurring revenue from existing customers and then our pipeline is fall as Jack alluded to before the VACs in process and the VAC approvals. So that I think that answers your question..

The 237 you're seeing most of his recurring meaning hand pieces..

Yes, its recurring waters as we expand J-Plasma into existing accounts and while again we don't breakdown the specifics, but I will tell you that the vast majority is from the recurring waters of hand pieces not big pops from multiple generators. And that while again what gives us such conviction that our strategy is working..

Okay that is amazing I mean in that case if you do like you regarding to sell decent amount of place in the numbers that kind of what would be layered on top of that have it all really nice Q3. Its basically things go as planned..

Yes..

Okay, great..

We think about at the same way..

Perfect thank you..

The next question will come from [indiscernible] of Newport Coast Securities. Please go ahead..

Hey, Rob.

Can you hear me?.

Yep. We can hear you perfectly..

Okay. First of all apologize I was on another call. So I’ve missed kind of your opening comments. But overall your revenues inline with my motto, you beat on the bottom line. So those to me – like good numbers. My first question, I’ve got two questions. My first question is on the J-Plasma.

We were talking about I want to say a $10 million of revenue rate at the end of this year is that still number that's targeted.

Is that number have been moved on a little bit?.

Yes, you know this a snapshot in time. So you know as I indicated in the prepared comments I know you didn't hear all of them.

Is the longer sales cycle does have a bit behind our initial targets? So it is snapshot of time we’re coming down a little bit, - you could do the math, we’ve come down to expecting a 100 generators in use and then the same math applies, so that would be two surgeons per generator doing four cases a week.

And if you do all of that math it comes out to about 7.8 million, now that’s a snapshot in time. We do expect that things could change as things accelerate those numbers could change quite significantly..

Okay, excellent. The technology is still the same and the investment thesis is still the same, one quarter doesn’t make a trend and one quarter is not an investment, when you look at what those can do for 3 to 5 years.

My second question and you’d notice much better than - but is there any risk? And if so how do you manage that risk that you might be diluting the focus of your sales force as they go on these different clinical call points?.

Yes, that’s a great question. And this is something that the leadership team here at Bovie spent an awful lot of time contemplating.

And we have communicated really from day one that we’re going to focus on our initial targets first and once we gain the requisite momentum in those targets we would get to the second targets, because we want our sales force to be focused, we’ve reached that point in time where the longer sales cycle, one positive outcome is it does allow us it freeze the time of the sales rep to start focusing on other initiatives.

And as we focus on the very same accounts but with different targeted specialties it has that effect as I alluded to in one of the earlier questions of our multipronged approach of having multiple specialties approaching the same VACs that we do expect to shorten the sales cycle which remains 3 to 9 months.

But if we could be on the shorter end of that range that’s what we’re attempting to do so I do not believe this at all takes the focus away from our strategy. We’ve just reached the milestone that is that the time is right to do it now..

Okay, outstanding. And thanks for – taking the time to answer my questions. And keep up the good work, guys. Take care..

Okay, thanks so much..

The next question will be a follow-up from Charles Haff of Craig-Hallum. Please go ahead..

Hi, thanks for taking my follow-up question. I wanted to ask you a little bit about the urology opportunity you know obviously having Dr. Patel involved is a huge win for your company. I'm just wondering if you have discussed this opportunity or if other urologists try doing what Dr.

Patel has done here in a radical prostatectomy and I assume that this would the approach that he has used and correct me if I am wrong is with through the access port.

But I'm wondering if you have talked about anything with Intuitive Surgical or others to maybe add J-Plasma to the arms of the da Vinci robot?.

Yes, great question, thanks. Very thoughtful, question. With respect to Dr. Patel this is fresh off the press this is brand-new news.

He is the only urologist at the time that that we’re working with and he is just starting to get – he just started using J-Plasma first in a live animate setting and then in a cadaver lab and starting to use it on patients, so way to early to talk about his experience.

And so stay tuned we’ll certainly keep everyone informed on that progress because it is very, very important. To use right now Dr. Patel is not the only doctor the only surgeon using it on the da Vinci robot there are GYN's that are also using it.

So to answer your question with respect to the to the auxiliary port, yes currently in its configuration, the product can be used in the auxiliary port and that is what Dr. Patel is doing and others using it robotic surgery. With respect to so robotic surgery is very, very important.

As you think about our target surgeons especially the GYNs and urology many, many of the procedures are done robotically. So we certainly have an initiative to further develop configurations of J-Plasma specifically for the robot.

At this time we are not limiting those configurations to one manufacturer in fact just last week or the week before Jack and I along with our Head of R&D, Shawn Roman attended a conference in Washington DC that was an FDA workshop and in attendance I think with every single robotic company that has either have a product approved, which there are two and then the others.

And our thought process at this time is not to limit ourselves to a configuration for one robot, but to work with all robotic companies..

Okay, thank you. And then question for you on Colpo-Master and Freeze Point. You mentioned that you were launching those products. Did you need specific approval for those products or can you kind of describe those products a little more are they J-Plasma products are just help us understand those a little better? Thank you..

Absolutely, yes. And I know why there might be some confusion because these products coincidentally are focused on GYN and dermatological procedures. These have nothing at all to do with J-Plasma.

This has to do with our core business and these are for physician office-based practices so the corporate scope and which the Colpo-Master is the brand name, but COLPOSCOPE is really used in GYNs office after a Pap smear.

This particular scope is used to gain greater visualization so that is an end and this is one that we’ve partnered with another manufacturer and are marketing it under the Bovie name again for the office-based practitioners, core business not J-Plasma. Freeze Point, same thing.

So Freeze Point is used for cryosurgery so this is where you use extreme cold temperatures to remove skin lesions and these are used by dermatologist, by primary care physician to do dermatological – light dermatological skin procedures that require cryosurgery.

That two is being marketed under the Bovie name and manufactured by another – by a partner manufacturer of ours..

Okay, so in terms of Bovie salespeople or Bovie salespeople calling on the offices to sell these two products?.

No, not one. In fact all of our products to the core business is sold through our distribution partners and these are the large distributors that call on office-based practitioners such as PSS, McKesson, Henry Schein and so Owens & Minor that those folks. So these are all distributor base sales, no direct sales reps..

Okay. And my last question is regarding cardiology or just a cardiovascular and cardiothoracic.

Can you kind of characterize how many procedures or how many physicians have tried to use J-Plasma in those indications or in those areas to kind of give us sense for how far down the road you may be there?.

Yes, great question. So we are in the early stages and it follows a predictable sequence of events whether it's in the cardiovascular, cardiothoracic or urology and the sequence of events are just that. We work with these surgeons and by the way these are world-renowned surgeons, real thought leaders in their respective areas.

We work with them to develop the clinical protocols in an eminent lab setting. We then take those clinical protocols and translate them into the [indiscernible] on live patients.

So for cardio vascular since you asked about that we had – we are working with two surgeon where we have a few weeks of cases under our belt and I don't know the exact number of cases, but we've already established the clinical protocols which have to do with the settings of J-Plasma and then we’ve translated those into the OR and as for life cases.

I think most of the case are pediatric cases and as Jack alluded to before in the very early innings of this it looks promising, we are seeing some very promising outcomes.

So it's a little early to report, but as soon as we have more definitive things to report we will and this is the right sequence of events to follow because you have to ensure that it's safe and you want to ensure that it really makes a big difference that it's a game changer and so far so good..

Okay. So two on the cardiovascular, pediatric cardiovascular side how many docs on the cardiothoracic….

I’m Jack, I’m sorry.

So we have two surgeons that have the experience on the cardiovascular, how many of the cardiothoracic?.

On cardiothoracic we are in the lab phase right now working in the animate lab, trying to come up with the proper settings for the tissue effect that they are looking to gain in the procedures of interest. So right now we are not in live cases with patient this point in time..

Okay, great. Thanks for your help..

Yes, thank you. End of Q&A.

And ladies and gentlemen, this will conclude our question-and-answer session. I would like to turn the conference back over to Mr. Gershon for any closing remarks..

Thank you, Denise. Thank you everyone for participating in today's call and we look forward to keeping you informed on our progress..

Ladies and gentlemen the conference has now concluded. We thank you for attending today's presentation. You may now disconnect your lines..