Frank Grillo – Chief Executive Officer Hal Hurwitz – Chief Financial Officer.

Kris Tuttle – SoundView Technology Group Jeb Terry – Aberdeen Investment Management Chris Toledo – SoundView Technology Group.

Greetings, and welcome to the MRI Interventions' Incorporated 2016 Third Quarter and Nine-Month Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Mr. Frank Grillo. Thank you, Mr. Grillo, you may begin..

Thank you, Tim, appreciate it. Good afternoon everyone. Thank you for joining us for our Q3 2016 earnings call. With me for today's call is Hal Hurwitz, our CFO. And on behalf of the management team and employee of MRI, we appreciate your interest in our company. So those of you who are shareholders, thank you for your support.

For Q3 2016, we have good news about procedure growth, disposable revenue growth, continued improvements in our balance sheet and use of cash. The adoption of our technology continues, and we are very pleased with our position and progress in the market, and our momentum going into Q4.

We're honored to be working for you in building this great company, and we're proud of the care patients are receiving as a result of the continued adoption of our products and technology. With that, let me turn the call over to Hal for a review of our Q3 2016 financial results.

Then I will provide further context regarding our progress in the marketplace.

Hal?.

Thank you, Frank. Before we begin, I want to point out that the comments made on this call may include statements that are forward-looking within the meaning of Securities Laws.

These forward-looking statements may include without limitation statements related to anticipated industry trends, the company's plans, prospects, and strategies both preliminary and projected; and management's expectations, beliefs, estimates, or projections regarding future results of operations. Actual results or trends could differ materially.

We undertake no obligation to revise forward-looking statements in light of new information or future events.

For more information, please refer to the risk factors discussed in our Form 10-K for the year ended December 31, 2015, which have been filed with the SEC, as well as our quarterly report on Form 10-Q for the quarter and nine months ended September 30, 2016, that we will be filing with the SEC shortly.

All our filings can be obtained from the SEC or by visiting our Web site at www.mriinterventions.com.

Now, for our results from the 2016 third quarter, revenues were $1.6 million for the three months ended September 30, 2016, and $1.2 million for the same period in 2015, an increase of $370,000 or 30%, which was attributable to increases in both our ClearPoint system disposable and reusable products.

ClearPoint disposable product sales for the three months ended, September 30, 2016, were $1.3 million compared with $970,000 for the same period in 2015, representing an increase of $309,000 or 32%.

This increase was due primarily to an increased volume of procedures performed using our ClearPoint system within a larger install base for ClearPoint during the three months ended September 30, 2016 relative to the same period in 2015.

ClearPoint reusable product sales for the three months ended September 30, 2016, were $309,000 compared with $239,000 for the same period in 2015, representing an increase of $70,000 or 29%. This increase was due primarily to differences in equipment configuration of ClearPoint systems sold during each of those three-month periods.

Reusable products consists primarily of computer hardware and software bearing sales prices that are appreciably higher than those for disposable products, and historically have fluctuated, sometimes significantly from quarter to quarter.

Gross margin on product revenues was 53% for the three months ended September 30, 2016, compared to 54% for the same period in 2015.

The slight decrease in gross margin was due primarily to increases in the cost of disposable and reusable product components we purchased from third-party manufactures, and the allocation of indirect cost to manufacturing. These items were partially offset by an improvement in direct labor productivity, and a decrease in the cost of scrapped product.

Research and development costs were $691,000 for the three months ended September 30, 2016, compared to $480,000 for the same period in 2015, an increase of $211,000 or 44%.

The increase was due primarily to increases in compensation primarily related to an increase in headcount in January 2016, intellectual property costs allocated to research and development, and costs incurred in connection with or development of the next generation of the ClearPoint operating system.

These increases were partially offset by an increase in the allocation of costs to manufacturing, and decreases in other product development costs and regulatory fees.

Selling, general, and administrative expenses were $1.9 million for the three months ended September 30, 2016, as compared with $2.1 million for the same period in 2015, a decrease of $247,000 or 12%.

This decrease was attributable primarily to decreases in personnel costs, which include share-based compensation and travel costs, professional fees, marketing costs, and medical device excise taxes, and an increase in the allocation of cost to manufacturing.

These factors were partially offset by an increase in public company and investor relations costs. Our operating loss for the three months ended September 30, 2016 was $1.7 million as compared with $1.9 million for the same period in 2015, an improvement of $217,000 or 11%.

Now I would like to briefly describe the non-operational items that affected our results during the third quarter. First, during the three months ended September 30, 2016, we recorded a non-cash gain of $324,000 related to additions to and changes in the fair value of derivative liabilities. In the same period for 2015, this gain was $2 million.

In both the 2016 and 2015 periods these derivative liabilities related to the issuance of warrants in connection with 2012 and 2013 private placement transactions.

In 2016 however derivative liabilities also include the affects of amendments we entered into in June and August, 2016, with certain note holders to add contingent conversion terms and potential down around pricing protection of warrants issued in connection with their notes.

The note amendments we entered into in August 2016 provided for the ability of the note-holders to convert an aggregate of $1.75 million of their notes in the event we completed a private offering, and to reset the exercise price of warrants they received in connection with the original issuance of those notes to the exercised price established in the private offering.

As I previously mentioned, execution of these amendments created derivative liabilities based on the new conversion feature and the new pricing of the warrants.

The amendments also constituted debt extinguishments under generally accepted account principles necessitating us to record a non-cash loss from debt restructuring of approximately $933,000 during the three months ended September 30, 2016.

This loss represents the aggregate difference in the fair value of those derivative liabilities between the points in time immediately preceding and immediately subsequent to the execution of the amendment.

As Frank and I will discuss further, those note-holders did convert the notes pursuant to the August amendment in the pipe transaction we completed in September. Net interest expense for the three months ended September 30, 2016 was $240,000, compared with $314,000 for the same period in 2015.

This decrease was due primarily to the reduced principal balance of the note payable to Brainlab AG resulting from the restructuring of that note in April, 2016. Reflecting the affects of these non-operational items, net loss for the three months ended September 30, 2016 was $2.6 million as compared with $245,000 for the same period in 2015.

Now let's go over the financial results for the first nine months of 2016. Revenues were $4.1 million for the nine months ended September 30, 2016, and $3.1 million for the same period in 2015, an increase of $1 million or 33%, attributable primarily to increases in our ClearPoint system disposable and reusable products.

ClearPoint disposable product sales for the nine months ended September 30, 2016 were $3.4 million compared with $2.5 million for the same period in 2015, representing an increase of $922,000 or 37%, substantially due to a greater volume of procedures performed using our ClearPoint system within a larger installed base for ClearPoint in the nine months ended September 30, 2016, relative to the same period in 2015.

ClearPoint reusable product sales for the nine months ended September 30, 2016 were $610,000 compared with $469,000 of such sales in the same period in 2015, representing an increase of $141,000 or 30%.

This increase was due primarily to a greater number of ClearPoint systems sold during the nine month period ended September 30, 2016 relative to the same period in 2015. As I previously mentioned, sales of our reusable products may vary, sometimes significantly, from period to period.

Gross margin on product revenues was 51% for the nine months ended September 30, 2016, compared to 55% for the same period in 2015.

The decrease in gross margin was due primarily to increases in the cost of disposable and reusable product components we purchased from third-party manufacturers, production scrap, and the write-off of expired product, and the allocation of indirect cost to manufacturing.

These increases were partially offset by decreases in production variances, inventory adjustments, and the provision for excess and obsolete inventory. Research and development costs were $1.1 million for the nine months ended September 30, 2016, compared to $1.4 million for the same period in 2015, an increase of $664,000 or 46%.

Similar to the third quarter increases I described, this year-over-year nine-month increase was due primarily to increases in software development costs, personnel costs, and intellectual property costs allocated to research and development. These increases were partially offset by an increase in the allocation of departmental costs to manufacturing.

Selling, general, and administrative expenses were $5.7 million for the nine months ended September 30, 2016, as compared with $6.6 million for the same period in 2015, a decrease of $860,000 or 13%.

This decrease was attributable primarily to decreases in personnel costs, including share-based compensation and travel, medical device excise taxes, professional fees, marketing costs, and occupancy costs. These decreases were partially offset by an increase in public company costs.

Affecting the nine months 2015 results was the closure of our former Memphis, Tennessee headquarters, as we focus all operations in our Irvine, California facility. We did not retain any of our seven Memphis-based employees, which included three of our executives.

As a result, we incurred expense of $1.3 million primarily related to termination costs, including the modification of option terms during the nine months ended September 30, 2015.

Our operating loss for the nine months ended September 30, 2016 was $5.7 million as compared with $7.6 million for the same period in 2015, an improvement of $1.9 million or 25%.

Now for a brief discussion of non-operating items impacting the nine-month results, during the nine months ended September 30, 2016 and 2015, we recorded non-cash gains of $748,000 and $981,000 respectively, resulting from additions to and changes in the fair value of derivative liabilities that I described in my discussion of the three-month results.

As we described in our discussion in our 2016 second quarter results, in April 2016, we significantly restructured the note we had payable to Brainlab.

In this restructuring we were able to negotiate a $2.3 million reduction of the previously existing $4.3 million note by entering into a patent and technology license agreement for software relating to our SmartFrame device, and issuing equity units to Brainlab, each unit consisting of shares of our common stock and warrants.

In connection with this restricting we recorded a gain of $941,000, representing the difference between the aggregate fair value of the license agreement and the equity units versus the aggregate principal amount of the Brainlab note cancel this consideration.

Also as discussed last quarter, on June 30, 2016, we entered into amendments with Brainlab and two holders of our 2014 secured notes payable.

Pursuant to the amendment, the parties agreed that in the event we would've have closed the qualified public offering, $2 million of the principal balance of those notes, plus all unpaid accrued interest on that amount would've automatically converted into the security offered in the qualified public offering.

And the exercise price for warrants issued in connection with those notes would've been reduced. Based on these provisions on June 30, 2016, we recorded a non-cash debt restructuring loss of $820,000, resulting from the restricting of the Brainlab note and those 2014 secured notes.

As I described in my discussion of the Q3 2016 results, on August 31, 2016 we ended into second amendments with the same two holders of the 2014 secured notes.

These second amendments provided for similar conversion and warrant provisions as the first amendment, but this time allowed for note conversions in the event we closed a private equity offering, which as we have previously announced, we did close on September 2, 2016.

As mentioned in my discussion of the Q3 2016 results, execution of these second amendments constituted a debt extinguishment under generally accepted accounting principles, necessitating us to record a non-cash loss on debt restructuring of approximately $933,000, representing the aggregate difference in the fair value of the derivative liabilities between the points in time immediately preceding and immediately subsequent to the execution of those second amendments.

Net interest expense was $836,000 and $921,000 for the nine months ended September 30, 2016 and 2015 respectively. The decrease was due primarily to the reduced principal balance of the note payable to Brainlab resulting from the Brainlab note restricting I previously described.

Reflecting the affects of these non-operational items, net loss for the nine months ended September 30, 2016 was $6.4 million as compared with $7.3 million for the same period in 2015. So with that, I will now turn the call back over to Frank..

Opportunities, Indications, Techniques, and Outcomes, during the September congress. Overall, it was a good quarter with continued progress of adoption of our technology. Q4 is shaping up nicely, and we look forward to continued progress in our business.

Cases are going well, and we are seeing more and more excitement around our technologies for a variety of procedure types and with a variety of drug delivery partners. Our sales and clinical specialty teams are driving hard, and we appreciate the interest in our technology we are receiving from more and more potential customers.

To close my comments, I'd like to highlight a recent story about a patient in the Greater Boston area. This one was very exciting. This patient is a doctor at one of the largest institutions in the Boston market, which unfortunately does not have our ClearPoint NeuroNavigation system.

As the patient, he sought out another hospital in the Boston market which does in fact have a ClearPoint system available so that he could undergo the electrode placement for a brain stimulation procedure while under general anesthesia.

As a patient, he knew that he wanted to be under general anesthesia for the procedure, whereas as a doctor he understood the advantage of MRI visualization and guidance for such an important procedure. So he actually went to a different institution than the one he worked at.

Procedure went well, and the patient, who as I mentioned is a doctor, is back at work seeing patients again. His comments to the surgeon who did the procedure utilizing ClearPoint was, quote “I wouldn't have had this procedure done any other way, and I don't know why anyone would” unquote. I like that.

We're very encouraged to see this type of motivation, and look forward to seeing more patients, neurologists, and neurosurgeons realizing the advantages of our technology and specifically seeking out hospitals [indiscernible]. With that I'd like to turn it back to the moderator for any questions. Thank you..

[Operator Instructions] Our first question comes from the line of Kris Tuttle of SoundView Technology Group. Please proceed with your question, Kris..

Hi, thanks, and nice job on the quarter, fellows. I have a few questions; I'll limit myself to two. You talked about the -- like little bit of an increase in the use of the system for drug delivery, you talked a little about stem cell placement.

Was what you experienced in the quarter with the strength from the drug delivery trials a blip or do you think that's something that's likely to continue? And then just so you have it, my second question is, you mentioned the increasing ability to use diagnostic MRI equipment, and I wondered if you could just let everybody know a little bit more about how that would change the footprint of theaters where your technology might be used compared to where it has been used historically..

Okay, thanks for the questions, Kris. Appreciate you joining the call. So on the drug delivery front; it was very interesting this quarter. We had a lot of orders for products related to drug delivery including a lot of orders for our SmartFlow cannula being used in animal trials.

So not procedures, and so they don't show up in our procedure count obviously, we don't count animal procedures for obvious reasons. But we did have a good number of orders in that realm for people doing preclinical trials. And so your question of will that continue, well, in Q4 it will continue.

We know that at this point that our drug delivery orders are relatively strong in Q4. Will it continue beyond that? I really can't say. It is very dependent on a, how much more work these companies have in front of them for their animal and bench testing, which I don't really have that insight with them.

And secondly, how many of them move into the clinical phases of their trials. Now, two or three of the companies we've spoken with do expect to be in human clinical trials in 2017, typically Phase 1, and one I think is aiming for Phase 2. But I don't know exact timing, and they don't really release those kind of estimates.

So I think for Q4 we'll continue to see nice strength in drug delivery, and I can't predict right now whether it will continue to go up or down beyond that.

For the diagnostic MRI question, I emphasize this paper that -- these two papers that came out, simply because I do find when I speak with a lot of investors there is often an impression that you need an intraoperative MRI to utilize our technology.

Intraoperative MRIs are MRIs that are situated in a sterile field right next to an operating room, or what's called an [indiscernible] where it's integrated into an operating room. We estimate there's maybe 100 to 120 of those around the country with that kind of setup. The diagnostic MRIs are different.

They are traditionally used for diagnostic imaging. Every major hospital in the United States has at least one diagnostic MRI, almost by definition. And again, I always emphasize that we are talking still a hospital environment, we're not looking the imaging clinics that you might see in a strip mall or something.

So the Intraoperative MRI space is actually a very good target for our technology, and we are installed in several intraoperative MRIs. But I'd like to emphasize that our procedure is readily done in a diagnostic MRI, as these two papers showed.

The workflow has been streamlined, people really are understanding how to do the procedure in a diagnostic MRI, and it really expands what we're doing in terms of our target market significantly..

And one other question, I wasn't -- we weren't covering the company last year, so I'm not familiar with is there any seasonality with respect to Q4 either in terms of hospitals needing to use budgets in reordering or the holidays causing a drop in procedure activity.

Maybe you could just give us a little bit of update on what types of things to expect in Q4 if there's a pattern there?.

Yes, I think at this point we're a little too early in the learning curve to point to any heavy seasonality. Certainly we see a drop off in procedures around Thanksgiving week and I would say right at the end of the year, between Christmas and New Years, we see a drop off there as well given that these are major procedures.

And frankly, the doctors want to stay home with their families. The counterbalance to that is most of our procedures are elected. These are not emergency procedures; so many people do find that, come the end of the year, to utilize their deductable.

If they're going to get a procedure done they want to get it paid for through insurance, and they'll go forward with it right at the end of the year. So I'd say those two things kind of offset each other.

And then I would say we're still impacted more by whether some of our big surgeons are taking an extended holiday or not over the -- extended vacation over the holiday periods. So in general, I don't really point to seasonality having a huge impact on the business other than right around the holiday weeks.

In Q3, August, I think the world slows down in late August, and we get that as well..

Okay. All right, thanks. I'll leave it there and get back in queue, and let others..

Thanks Kris..

[Operator Instructions] Our next question comes from the line of Jeb Terry of Aberdeen Investment Management. Please proceed with your question..

Hello Frank..

Hi, Jeb, how are you? Thanks for joining the call..

It's a pleasure. Nice quarter, very nice. So I had multiple questions, as you might suspect.

But can we start; help me understand how gross margins are going to evolve?.

Okay. Actually, why don't I turn that one over to Hal, I think Hal is [indiscernible] dig in on that today..

Yes, Jeb, in 2016 measuring margins year-over-year for each quarter, I would ask you to keep in mind we started allocating indirect cost of people in our organization whose compensation has been charged to other departments that were involved with manufacturing.

We started allocating those to manufacturing for a portion that represents their involvement. That started in the fourth quarter of last year. So the year-over-year comparison is going to suffer from that, and that knocked down margin from what it historically had been pretty significantly.

As you can tell, if you look at the sequential progress, starting with Q1 of this year and going through Q3 that we've just been talking about, the margin on an absolute basis has improved, and in relationship to last year has improved.

Once we get to a year-end this year, and then into 2017, we will be, if you will, apples and apples again in that comparison. So I would say that two things will operate. One, that allocation for us right now is relatively fixed. We've got a lot of scalability in our organization.

So as revenues increase I'm not looking for that indirect cost pool to increase substantially. And so that relates to number two, and that is that as revenues increase the significance of that indirect cost will decrease as a percentage.

So that's a longwinded answer which I apologize for in the way of telling you that my expectation is that margins will continue to improve primarily related to increasing volume..

So if, and I don't know -- it's always tough to know what is at scale, but as the number of cases goes up and your expendable revenue goes up as a mix, and in absolute terms, what would be a goal for gross margin in some normal state as you anniversary this allocation issue and other things [indiscernible] at the margin? How do you price things such that to achieve your objective gross margin?.

Well, we've been reluctant to give guidance in that regard, but I think that statements that have been made in the past, Jeb, have indicated that our disposable products, which obviously are the substantial part of our total revenues. And we believe that will continue into the future, do enjoy very good margins.

So I don't know that I could say they represent pharmaceutical type of margins, but they start approaching that. So I think a reasonable expectation would be to see it a meaningful number of points higher than where we are right now, definitely out of the 50s I would think. But again, that's just my expectation..

Okay.

And Frank, this will probably be for you, could you give us a sense of how many doctors are actually trained on the system? I gather then -- and given that you, I guess you sold two more sites that you're working with something in the order of 49 to 50 sites at this time?.

So I think in the U.S. now, Jeb, we're at 46. We added one new account through evaluation this quarter when we sold two capital systems through that were on evaluation from prior quarters. And I keep using the number of about one-and-a-half docs trained per account. So that would put you somewhere in the 65 to 70 range per total docs..

And so as you -- if it's one-and-a-half, and I've seen as you've grown your number of sites, I'm just curious, as these doctors mature or have more experience with the procedures are you seeing higher utilization per doctor and….

Yes, I think in some sites we definitely are, and we're seeing some of the doctors get more MRI time. I know of a few accounts also this quarter that expanded from really one primary procedure to two or more. Just thinking about a couple of specific accounts that started out on laser and it recently added [indiscernible].

And have seen accounts do the opposite as well. So we definitely see some expansion and utilization as they get more comfortable with the technology. What continues to be a challenge in some of these instances is getting the MRI time.

And what I really love hearing about is when a doctor gets expanded block time on the MRI each month or each week, that's always very exciting to us, because I think most of our docs could increase their utilization, and will increase their utilization as they get more MRI time..

And since Pittsburg had that milestone, I gather then they've got more than one-and-a-half doctors using it and get the MRI time.

So are they -- is that kind of poster child situation, and is there something to learn from that experience that might apply as we think about adoption in your installed accounts?.

Yes, so Pittsburg is a great account, a very committed guy there, Dr. Richardson. And I think his fellows do cases with him, but he's the primary guy there. What's been unique about Dr. Richardson is he's now doing all four types of procedures.

So again, this is a guy who started out with us 18 months, 24 months, something like that ago doing just lead placement for brain stimulation systems. I think in the last six months or so he was able to drive the acquisition of a laser at UPMC, and he's now doing a few laser cases and just getting going on those, so I'm excited to see those ramp up.

He has been included in Voyager's clinical trial, so he's now doing drug delivery, and that's very exciting for him and his patients.

And he's also stated doing some biopsies with the system when he sees -- when colleagues of his see patients with very deep, hard-to-reach biopsies, and they turn to a functional stereotactically trained guy to help them access the tumor. So what's been unique about UPMC is really the breadth of procedures he's now doing.

I would say that he's the guy who would ramp up much faster if he could get even more time on his MRI. And he's definitely in discussions with his administration to do that. So it's been very encouraging to watch that from afar..

I don't know, I think you've mentioned in the past, you were in maybe five of the top ten hospitals for these procedures.

How many doctors are in each hospital and then how many cases do they do? So what I'm trying to is if this becomes standard of care or like your -- Pittsburg, he's doing four types of cases, does he do like in ordinary course 20 cases a quarter? Of which, he is doing some single digit number with you or can it grow [indiscernible] double digit number cases with you if he starts to migrate more and more of his practice to MRI to ClearPoint and get to MRI at times?.

Yes, so bunch of questions in there. It's a little hard for me to throw up averages because each institution is different and depends on the number docs doing cases. So thinking about UPMC, he is in the -- what is he doing? I think around 2 to 4 months with us right now. And, he could definitely ramp up from there.

Is that all the procedures he does? By no means. He is probably -- I don't know entirely how many procedures he is doing. But I think he doing 25 a quarter kind of in that range overall, but I don't know for sure. So, that gives you a sense of we've probably got a third of his business if you will.

And then, he might be doing some cases as well surgeries and procedures where ClearPoint would not really be a technology he will turn to. He doesn't need the navigation of that nature. Now I always throw out Emory as a great institution to look at. Emory is in the -- they are doing a good 20 cases a quarter with us.

They have got I think four docs now doing our procedures. They are one of the larger institutions for these procedures in the country. And they are probably doing I am going to guess he has about half of the procedures for these -- half of their procedures for these technologies. So, that gives you some sense.

These are not -- and what you don't see is you don't see like a guy who does 500 a year. It's not that kind of a procedure area. But there is certainly a number of guys who do anywhere from 50 to 100 -- 50 to 80 a year would be what I would consider a very good volume in this market..

I see. And the amount of I don't know if there was the animal trials or if you were able to get a price increase or something. It looked like he had more revenue per case this quarter.

Is that sustainable?.

Yes. So that definitely relates to the drug delivery products we sold. For instance, we had a big order for SmartFlow cannulas to an animal lab that was doing a bunch of animal trials for one of their customers.

So, that was a weird one where I don't even know who the drug company was that was using our product for once which I don't like honestly, but it was nice order of products. They understand their animal work is very successful. And they were very happy with the product.

But that doesn't show up in our case count in anyway, but revenue for those products does show up. So, I kind of saw this coming and I did a little back of the envelope math here. And I think on revenue per case like right in between what it was in Q1 and Q2. Q1 it was a little higher. Q2 it was a little lower.

I think we were actually that's smack in the middle on a true case and SmartFrame type basis..

Okay..

And then, also to your question is it sustainable, we do actually very orders on the books in Q4 for those types of programs. I just have no insight as to whether they will continue Q1-Q3 at this point..

I see. Very good. Well, that's my FX question. Thank you..

All right. Thank you..

We have a follow-up question from the line of Chris Toledo of SoundView Technology Group. Please proceed with your follow-up..

Hi, thanks. I'll follow-up with some housekeeping stuff later.

But Frank, during your prepared remarks, you mentioned that great quote from the doctor who had that procedure and certainly consistent with we heard in talking to doctors and people in the industry and my question is is there a way that you guys threw some kind of focus PR and effort who would reach a large population of -- you already do a lot that reaches the doctors directly.

But I think there is a very graspable kind of message around the use of ClearPoint that would appeal to everyone, educated patients et cetera. And I don't know if this a YouTube documentary channel. It's not a Super Bowl commercial, but it's a great story that seems like when people hear it they it resonates with them but not enough people hear it.

I know we're working lot of things to change that.

But I am wondering if you and there have -- agree with this or -- and have any ideas around things that you might do in the coming year to make the ClearPoint reverberate a little bit more in a community of even educated patient, does that make any sense?.

Sure. Sure. Great question, Chris. So, here's some of our thinking on this. So if you think about a patient who is going to go in for one of these procedures. The first person they are probably going to see is the general practitioner. The next one is probably a neurologist. And then finally they are going to get in front of the neurosurgeon.

Okay? So for us, most of our marketing is [indiscernible] neurosurgeon because that's the guy who actually does the procedure. And, let's say if it is brain surgery, you are going to listen to your doctor. You are not going to say to doctor, no, don't use that tool. I want to use a different tool. You're probably just not going to say that.

Now we are doing a very job in my opinion in marketing to neurosurgeons where our next step would be -- to me it is not so much the patient but more the neurologist, is how do we get the word out to more -- I am sorry neurologist who understands the differences in these procedures fairly well and we will start to shift some of their patients to the neurosurgeons in their community that utilize our technology.

That's kind of step 2 in our marketing..

Yes, that makes sense..

I think that makes sense. And then finally for the patient outreach, one thing I should have mentioned as we saw more hospital marketing this quarter than recently, there are some great videos up on YouTube now and will be on the website shortly from couple of our customers that are now starting to do more marketing of this into their communities.

And I think patients are going to trust that marketing more than they are going to trust it directly from a manufacturer. But above all, the patient will trust their doctor. So we need to get to the doctors..

Okay..

And I really can bet neurologist community is the one we really got to figure out how to tap into a little better and make sure that we are tapping into the neurologists who have neurosurgeons that utilize our technology in their catchment area..

Okay. All right. Makes sense, all right. Well, I will follow-up with you guys later on with some more detailed questions. And just -- I am going to cast my vote for the next quarterly conference call not at 5 o'clock on a Friday..

Yes, yes, we got some feedback on that. That's actually why we put up a press release..

I want make sure enough people don't miss the news that you guys are putting because this is another really strong sequential quarterly performance. So we want to make sure we are getting people pay attention..

Yes, I appreciate that. And that's probably why we put the press release out this morning. We just had some scheduling challenges on this call, in particular, I'm on the road all next week, and I just wanted to make sure we completed the call this week, but point well taken. We definitely got that feedback from a number of folks..

Absolutely. Well, thanks a lot guys. Great work..

All right. Thank you for joining the call, Chris..

We have a follow-up question from the line of Jeb Terry. Please proceed with your question..

And I will keep it limited, I promise. To the point about getting MRI [indiscernible] in interoperating sites, there are several - as mentioned in the past there were several hospital that were in the process of adding some MRI some interoperative assets.

And then I want say [indiscernible] going good was mentioned in the past that's building a dedicated suite -- dedicated maybe the wrong choice word, but can you address the MRI access situation as you -- looking out into 2017, how it might be different than what looking back in the 2016?.

Yes. We definitely heard of I can think just off the top of my head at least three or four of our current or potential customers looking at open intraoperatative MRIs next year; NYU being one of them. We are getting good contact with them and they are still seeing like they are on track to get something opened next year.

But the challenge with these intraoperative MRIs is these are major construction projects for most hospitals. These are not just wheel in a system and go. So, they can be 18 to 24 month lead time cycles. And NYU I think if you call from Hurricane Sandy actually have a whole basement of their hospital where all the radiology equipment was wiped out.

So I think they have got a bigger project in front of them although it does sound like it's on track for I think they are looking to open in the second quarter next year. I might be out of touch there.

So as these come online and every excited about hearing about the GEs and the Siemens of the world doing specific programs to put MRIs into hospitals right next to operating room in a sterile environment, but not like fully ceiling mapping type MRI. That's a different type that has a even a longer cycle to them.

It seemed the big manufacturers show more interest in this area is very, very encouraging for us. And I think over time that will free up a lot more MRI time. It's just -- it's one of these things that takes a while. So for next year I think of off the top of my head 3 or 4 that should be opening.

I am sure if I spoke to our sales team then there would be a longer list than that. So I am encouraged by I just wish happening a little quicker..

Here we are. Okay, well, it's definitely beers thirty in the East Coast, so I'll limit my questions to that. Thank you..

All right. Thanks, Jeff. Thanks for joining the call..

There are no further questions over the audio portion of the conference. I would now like to turn the conference back over to management for closing remarks..

All right. I will just wrap up quickly here. And I guess I do need to mention that I definitely Chris' comments about the Friday afternoon call. We just ran into some scheduling challenges, unfortunately. But we appreciate the interest of our investors very much. And we hope you sense our excitement about the progress we are making as a company.

We are changing how neurosurgery is done, where it is done, and in some instances what can be done. We are confident of the benefits our technology brings to patient care. We are committed to bringing these benefits to more and more hospitals, surgeons, and patients. And the marketplace is responding with growing interest and use of our products.

And that, wraps up our Q3 2016 call. Thank you..

This concludes today's conference. Thank you for your participation. You may disconnect your lines at this time. Have a wonderful rest of your day..