Joseph Burnett - President and Chief Executive Officer Harold Hurwitz - Chief Financial Officer and Secretary.

Chris Toledo - SoundView Technology Group Larry Haimovitch - HMTC Jeb Terry - Aberdeen Investment Management Matthew Campbell - Laridae Capital.

Greetings, and welcome to the MRI Interventions' 2017 Fourth Quarter and Fiscal Year-End Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

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.

The Company undertakes no obligation to revise forward-looking statements for new information or future events.

For more information, please refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2016, and the Company's Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2017 both of which has been filed with the Securities and Exchange Commission, and the Company's Annual Report on Form 10-K for the year ended December 31, 2017 that the Company intend to file with SEC on or before April 2, 2018.

All the Company's filings may be obtained from the SEC or the Company's website at www.mriinterventions.com. It is now my pleasure to introduce your host Joe Burnett, President and CEO of MRI Interventions. Thank you. You may begin..

Thank you, Daryn, and good afternoon, everyone. Thanks for joining us for the fourth quarter and full-year 2017 earnings call. With me today on today's call is Hal Hurwitz, our CFO.

And behalf of the management team and employees of MRI Interventions, we appreciate your interest in our Company and your participation in our quest to take on the most challenging neurological disorders and surgeries. This is my first call as CEO and I look forward to updating you on our growth strategy and our successes in the years ahead.

My first few months in the role has been dedicated to better understanding our products, our customers, and our commitments to growth, including a critical look at where that growth will come from. As a result, we have reprioritized different parts of our strategy, and aligned new performance indicators to track our business toward these goals.

These indicators in turn drive the day-to-day prioritization of both our field and our development teams. Importantly, we believe that these changes in our priorities will enable faster growth in both procedures and centers over the long-term.

We will chart the course for MRI into compelling new opportunities as not only the leading platform for MRI guided therapies, but also as a therapeutic partner in indications where we have credible and meaningful value in patient care, including biologics and drug delivery.

We will be known as the Company in the neurosurgery space that helps surgeons decide, guide and confirm their procedures were done with the highest level of precision and accuracy possible. We have organized our five-year strategy into four primary drivers for growth.

Number one is our focus on the current core business falling on functional neurosurgery for deep brain stimulation, laser ablation, and tumor biopsy. You are all familiar with this priority and we have been delivering a greater than 35% growth rate in this area over the past five years.

Number two, is leveraging our leadership in live image guidance for precession delivery of biologics and drugs to key and often deep structures of the brain. We currently represent in the central part of many Phase I trials, which require the most precise, efficient and repeatable results.

We will continue to be a value delivery mechanism as these therapies progress through their regulatory trials. Number three, is the launch of our own new therapy products starting with our guided aspiration device for neurology.

This is an unmet medical need today and just one of the opportunities we see to leverage our platform and on a greater share of the total procedure revenue for the case. These tools will allow us to not only decide guide and confirm, but to decide guide treat and confirm.

Thus giving us more control over certain procedures like intracerebral hemorrhage. And number four, is scaling our business model to expand globally and better leverage our established sales channel to distribute additional products and services.

Doing so, expands our addressable market, opens more centers in target sites, and better monetizes our investment in the infrastructure necessary to be successful in this marketplace. We believe execution against these four growth drivers will set the table for MRI to become the premier live guidance therapy company in the neurosurgery space.

When I look back at some of the most enjoyable moments of my career volcano, and similarities to this current role is significant.

Here we have an opportunity to take an already FDA cleared and CE marked device that is significantly underutilized and improve the entire portfolio through enhancements to software, workflow, market development, and training and education.

We have already implemented new processes to quantify the various stages of our capital sales funnel and new partnership opportunities for inclusion into additional biologics and drug delivery regulatory trial. None of this can be done without the people in the team.

We've an incredibly talented and capable field team that has volunteered to step up and take on additional marketing, training, clinical, and product development responsibilities. This will enable us to execute on our high priority growth programs by taking some of our existing field capacity and deploying it to these crucial growth tactics.

I can't tell you how proud I am of the attitude of the team as every member has stepped forward and then in the next 30 days, we will have goals, schedules and ownership of programs to accelerate growth for all four pillars in the second half of 2018.

A simple example of one of these programs is a best practices document and publication, designed to share the workflow tips and tricks of our highest volume users with the rest of the installed base.

We have some very prestigious centers already capable of doing multiple surgical cases in the same day that have effectively leaned out much of the surgical workflow much like leaning out of manufacturing assembly line.

From patient recruitment to cancellation policies, to communications with anesthesia to the workflow that includes our specific part of the procedure. We have not yet taken advantage of all this learning or turned it into a meaningful marketing tool or program.

To put this into perspective, more than 90% of our installed base centers today are only willing to schedule one patient per day with our system.

If we can show down the procedure should routinely be done in less than four hours and that two procedures a day should be done on the same system, not just one and that could have the effect of immediately doubling the size of our current install base.

This is just one example and look forward to updating you on the progress of these programs in the months ahead. Let me now review the high level results from the past quarter ending December 31, 2017 before turning things over to Harold to discuss them in a bit more detail.

We had another solid quarter as we continue to grow the utilization of the ClearPoint system and are well positioned for further growth as we progress through 2018. Please note that it's seen in the earnings release we issued this morning, we have reclassified our method for reporting earnings into three primary revenue components.

This will provided added transparency to our performance and align the quarterly reporting nomenclature with our sources of growth over the next five years making for simpler communication. Total revenue in Q4 was $1.7 million, up slightly from $1.6 million in the same quarter prior year.

Functional neurosurgery revenue, which includes all of our disposable single use kits and components used in active clinical surgeries, grew 23% to $1.3 million of that $1.7 million total. This number represents the razor of the razor/razorblade model.

We expect revenue in this reporting area to likely correlate the case volume as we saw an increase of 32 cases for the quarter year-over-year up to 160 cases. Biologics and drug delivery revenue fell by 63% to $120,000 for the quarter.

This decline was driven primarily by a large preorder of materials for future drug study that took place back in Q4 of 2016 in the amount of $220,000. As many of you are aware, drug delivery sales can be lumpy and the disproportionately large advance order in the prior year quarter, math some of the notable progress made in the past 12 months.

We continue to work with our partners in the biologic and drug delivery space and are actively being used in five or more phase one clinical trials and under evaluation for multiple more. Additionally, Voyager Therapeutics is just beginning at Phase II trial and expects to start enrolling patients later this year in Q3, 2018.

More information on the status of their Phase II and Phase III Parkinson's disease programs are available on their website and investor presentation. Capital software and services sales for Q4 came in at $291,000, up 7% versus the prior year, and our overall gross margin for the quarter was 61%.

Moving on for the full-year 2017, total revenue increased 28% to $7.4 million driven by a 34% increase in functional neurology disposable and a 50% increase in capital equipment sales. We completed a record 629 cases in 2017, an increase of 25% over the prior year. We now have 52 installed centers in the U.S.

and a very healthy pipeline of prospective sites and evaluations that are pending instillations. And with that, I will turn the call over to Harold..

Thank you, Joe. I will begin with a discussion of our results for the fourth quarter ended December 31, 2017. As Joe mentioned total revenues were $1.7 million for the 2017 fourth quarter, an increase of 3% compared with $1.6 million for the same period in 2016.

This increase was due primarily to an increase in our functional neurology sales offset by the preorder of $222,000 in drug delivery supplies that Joe mentioned, which took place in the 2016 fourth quarter.

Functional neurology product sales increased $233,000 or 23% to $1.3 million for the 2017 fourth quarter compared with $1 million for the same period in 2016. This growth in disposable sales reflected 160 ClearPoint procedures performed in the 2017 fourth quarter, an increase of 26%.

Capital equipment revenue was $291,000 for the 2017 fourth quarter, compared with $272,000 for the same period in 2016.

Capital equipment revenue consists primarily of computer hardware and software sales with sales prices that are appreciably higher than those for disposable products and historically have fluctuated from the period to period as well as revenue from capital equipment rentals and service.

Gross margin for the 2017 fourth quarter was 61% compared to gross margin of 59% for the same period in 2016. The increase in gross margin primarily reflected a favorable mix of products sold. Research and development costs were $582,000 during the 2017 fourth quarter, compared to $530,000 during the same period in 2016, an increase of $52,000 or 10%.

This increase was due primarily to increases in personnel, regulatory, and software development costs. And those were partially offset by decreases in intellectual property costs. Sales and marketing expenses were $1 million for the 2017 fourth quarter, compared to $946,000 for the same period in 2016, an increase of $65,000 or 7%.

This increase was primarily due to an increase in exhibit activity during the fourth quarter ended December 31, 2017, relative to the same period in 2016.

General and administrative expenses were $1.3 million for each of the fourth quarters of 2017 and 2016, primarily attributable to decreases from the 2016 fourth quarter to the same period in 2017 in professional fees and stock-based compensation, which were offset by costs incurred in connection with recruiting and hiring of Joe Burnett.

Our loss from operations for the 2017 fourth quarter was $1.8 million, approximately flat year-over-year. For the full-year, total revenue increased 28% to $7.4 million. Functional neurology revenue increased 34% to $5.3 million from $4 million in 2016.

This increase was due primarily to a 25% increase in the utilization of the ClearPoint system to a record 629 cases during 2017 from 504 cases in 2016. Biologics and drug delivery systems revenue was $563,000 as compared with $771,000 in 2016. This fluctuation arose due the $222,000 pre-order by Voyager that was previously mentioned.

Capital equipment revenue increased 50% to $1.5 million from $980,000 in 2016. This increase was due primarily to increases in equipment sales, new equipment rental revenue, and equipment service contract revenue. Gross margin for 2017 improved to 61% from 54% in 2016.

The increase was due primarily to a favorable mix of revenues and to lower costs for scrap and inventory obsolescence in 2017 relative to 2016. Research and development costs were $2.8 million for 2017, an increase of 7% compared to $2.6 million in 2016.

This increase was due primarily to the upfront share-based payments we made in April 2017 when entering into the joint development agreements with the Mayo Clinic and Acoustic MedSystems. They were partially offset by decreases in software development, intellectual property, and personnel costs.

Sales and marketing expenses were $4 million for 2017 compared to $3.8 million in 2016, an increase of 5%. This increase was primarily due to an increase in personnel related expenses. General and administrative expenses were $4 million for 2017 compared to $4.2 million in 2016, a decrease of 3%.

The decrease was due primarily to decreases in professional fees and stock-based compensation, partially offset by the cost incurred in connection with recruiting and hiring of Joe Burnett. As a result of the forgoing, our operating loss in 2017 improved 15% to $6.3 million as compared to $7.5 million in 2016.

Briefly turning our attention to the balance sheet and cash burn particularly, during the 2017 fourth quarter cash used in operating activities was $1.7 million as compared to $1.1 million during the same period in 2016.

This increase in burn over the 2016 fourth quarter was due primarily to a pay down in 2017 of accounts payable and accrued liabilities that had been in the buildup mode during the 2016 fourth quarter. With that, I will now turn the call back to Joe..

Thanks Hal. In 2018, we plan for a number of key milestones, including continued growth of our core functional neurosurgery business and installed base, new customers for our biologics and drug delivery platform, additions to our user installed base and conversion of a valuation accounts into capital sales account.

We expect to perform our first human case of our intracerebral hemorrhage therapy device and that's a product in collaboration with the Mayo Clinic by the end of the year and to release our significant software improvement called ClearPoint 2.0 into routine clinical use in the second half of 2018.

Moreover, we expect to get greater leverage from our existing team of sales, clinical and development engineers to focus our energy on key marketing training and product strategies designed to balance our portfolio for both the near-term and the long-term. With that, I'll turn back to the operator Daryn to open up the call for Q&A..

Thank you. At this time, we will be conducting a question-and-answer session. [Operator Instructions] Our first question comes from Chris Toledo of SoundView Technology Group. Please proceed with your question..

Okay. Great. Thanks. And it sounds like a great serve in issues for this year guys. I wanted to talk a little about utilization. Joe you talked about using best practices and the fact that you could actually do two procedures in a day.

But as I go through the story with particularly new investors, they do the simple math on total number of procedures in the installed base, and that obviously works out to a low number, let's call it one a month, obviously with a huge skew of the top end and the low end.

But that also suggests that there's a massive amount of potential from going from one procedure a month to two to three to four. And I know that there are constraints like MRI availability etcetera.

But can you give us a little more color on how we should think about what is the realistic potential for the current installed base in terms of the number of procedures that can be done in a year or two even if we don't add any additional centers?.

Hi, Chris. Thanks for the question. I'll bring it back a little bit to the example that I gave before and maybe provide a little bit more detail, if you are planning a bilateral DBS procedure today. So procedure that would use two of our kits. In most centers, the average time for the total procedure would probably be four to five hours.

Okay, if you look to kind of across our entire installed base for that type of procedure. Because you get that four to five hours on average, the reality is that there's always a few outliers where the case takes an extra hour or maybe an extra hour and a half.

So you could be planning for four hours, but you have to be able to expect the chance that [they're six].

And as a result of that, surgeons and hospitals are reluctant to bring in a patient on schedule that second patient the same day, even on average they would sit in that same scanner, but the reality is that first procedure goes along, they don't want to incur the cost of keeping the patient overnight and waiting for another chance to do their surgery.

That's just kind of a throughput capacity planning example that we've got..

Okay..

Now as I shared with you before, however that we do have a couple of centers that are routinely doing two a day.

So again not just getting their average procedure time under four hours, but making it predictably under four hours and what that enables you to do is to be able to confidently say, look even in my longest procedures, I know it's only going to be as long as four hours. So I'm comfortable scheduling that second procedure for the same day.

So that's kind of the first leap that we expect to make. Again, just sharing best practices across the board for the entire procedure type and applying that to our entire installed base.

The next phase after that, which will take I don't want to say a huge amount, but your things that our software is working on for example and potential collaboration with big iron companies and other therapeutic companies that we're working on as well that are designed to actually create product improvements to make all of the different equipment in the surgical procedure move faster as well.

And again we're very, very confident in that situation that by working with partners and streamlining our own workflow, we believe we can get procedures predictably under three hours in which case now you start getting to the point where the stage patients properly, you could be not only doing two, but potentially three a day in that same scanner.

Those things are really crucial worst because as we point out, the biggest barrier that we have out there right now is getting access to MRI scanner time because most of our surgeons are still sharing that MR scanner with radiology and in many cases, they're only doing one procedure a month because at this point they've only proven the need that they need to use it one day a month.

So we're kind of planning for a worst case if you will and trying to make it easier on those surgical partners that we do have to say look even if you can only get that MR scanner once a month or once a week, let's make sure you're using it to the full capacity..

Okay. Okay, I get it. Thank you. I had another question on, you laid out your four high level - your growth strategies and the fourth one, the way I heard it was expand globally and add additional products and services to the existing sales channel.

And to me that sounds like two different things, but maybe I'm missing something, are they related your geographic expansion potentially and additional products and services?.

Yes, I mean they're related in the sense that it's creating business model scale. So you're making your sales force more productive out there. If we expand globally or when we expand globally, we're taking the same infrastructure if you will in the costs of overhead and applying it to greater revenue opportunities.

And if we add additional products and services to our existing sales channels bag, we again create better leverage there.

So those are things for example, you can imagine the situation where four or five years down the road as part of our five year vision some of these biologics and drug delivery companies start getting through the regulatory process and into commercialization phases.

At that point why not leverage us as part of their sales channel to do more for them since we're already in the room and we're already committed and capable of obviously running the delivery mechanism..

Okay. Okay. And then almost on Voyager, they've had some good news lately and they're clearly moving to the next stages of the trials as you mentioned in your marks.

And who knows if they're going to do another prepaid or some other mechanism for what they need, but is there a way for you to take that and recognize that ratably or something like that to maybe do away with some of the lumpiness because it sounds like that's going to be coming up again now in the next couple quarters as they move into their trials?.

I think it is and without going into too much detail, I think it's a fair comment and something that's important to me to make the business a bit more predictable and being able to charge against a standard PO instead of purchasing everything upfront, it's something that we're certainly capable of doing given our financial position today..

Okay. And last question, the audience that we've been able to reach with our research has been limited a little bit because of the fact that the stock isn't listed.

It's been trading much better of late and I wanted to find out if you guys had any visibility of getting up listed to that more people could get involved and understand and learn about the story..

Yes. Chris, it's a very important part of our strategy and something that we are spending some time in energy, looking into and pursuing. From our standpoint, believe me the moment it happens, you will be one of the first to know. We're not in a point where we can really comment on timing because it's not something that's in our control..

Okay. All right. Well I'll stay tuned for that. There are thousands of people out there that we can't even - the ticker can't even get listed because it's not on exchange, so that will be a big day when it comes..

Okay..

All right. Thanks guys. I'll get off, yes..

Our next question comes from Larry Haimovitch of HMTC. Please proceed with your question..

Joe, good afternoon. I hope you can hear me, okay. I'm on a speakerphone because I'm driving..

Okay. I hear you loud and clear, Larry..

Great.

So when you talk about the functional neurology, are we referring to that always in terms of ablation technologies? Should I think of it that way?.

I would think of it today as the disposable component of all of our systems that are used for routine clinical practice. So the three primary places those are used today are lead placement for deep brain stimulation, which is about 50% of our overall cases maybe a little bit more these days.

In ablation technologies as you point out sort of partnering or working in concert with Medtronic's Visual Aids System or Monteris.

That represents probably be another 40% of the procedures and the last 8% to 10% are generally tumor biopsy cases, where you want to be very, very precise and ensure that you've taken the samples from the direct portion of the brain before sending it off to pathology. So those are the three primary clinical buckets that our products are using today.

Yes, so the only other comment I'd make there is again we have that razor/razor blade, so the kit itself is used in concert with the capital equipment. Generally our razors represent about 80% of our overall revenue in that razor/razor blade models. So I think a very nice mix for the business with obviously a high gross margin and improving..

And Joe the way you break down the revenue between those three sources is there one of those three that's growing particularly fast?.

A lot of our mix has been pretty consistent at least over the past 24 months. We watch mix very carefully because a bilateral procedure like a deep brain stimulation procedure uses two of our kits where laser ablation procedure for example may only use one.

So we're getting kind of twice the bang for our time when we're in those DBS procedures, which is why we like seeing those grow. And why we're focusing a lot of our marking effort into that space..

Okay. And then one more question, I'll jump back in the queue.

So you've been on board, I think it's about roughly three months ago?.

That's correct. A little bit more..

So what is the most pleasant surprise since coming into the Company? I'm sure you did your homework.

I'm sure you did lots of due diligence, but I'm sure you have found something that have been particularly gratifying, would you share those with us?.

Yes.

When I try to bring up is and I alluded a little bit to it in the first part of the call is the similarity to the situation I was in at volcano and kind of coming into a situation where you've got an approved product that's proven in the field of high quality that underutilized and knowing there's a number of things you can do right out of the gate to kind of focus energy and make some movement happen.

And a lot of that has to do with the evolution away from open surgeries and more towards minimally invasive surgery. So all of that movement we saw in cardiology away from bypass surgery and towards Stenting or towards Taber's and AAA repair and all those types of things.

What it did is that not only - the major impact was not a reduction in the number of open surgeries, but rather the access or so many other patients that weren't candidates for surgery before that could now in-door a minimally invasive procedure. So knowing that we can be a part of that I think it's very, very exciting to me.

And the second one is like I said the team, having incredibly bright clinical specialists, sales personnel, engineers that are committed to be not in the field that are working with customers every day.

And knowing that, honestly we did have some extra capacity there and being able to reach half that capacity towards marketing and training and product development efforts without having to hire bunch of people right out of the gate is something that's also been a very pleasant surprise..

Good.

Any disappointments or what I call OSHIT kind of revelations?.

I would call it a revelation. I think I went into it, but my eyes light open and it something I talked about before which is just the negotiation that it takes for a neurosurgeon to work with the radiology department of a hospital to get access to MRI time. I knew that was going to be a challenge and I don't see that going away in the next six months.

I think the good news though is that the more and more Siemens and IMRIS and Philips and a number of other companies, there are active movements to call on neurosurgeons more and create these intraoperative MRI scenarios.

And from our standpoint, anytime one of those goes in we celebrate because we know a surgeon is generally building the schedule for those rooms and not the radiology department. We know the patient throughput in those centers is going to increase..

Great. Joe thanks very much..

Okay. Thanks Larry..

Our next question comes from Jeb Terry of Aberdeen Investment Management. Please proceed with your questions..

Hello, Joe..

Hi, Jeb. How are you doing? I can hear you..

Good. Great..

As long as your question does not involve you are giving me an update on the Duke score I would be very [indiscernible]..

Okay. So a couple things, the first one is on the drug delivery. I am fascinated by the progress there.

So could you kind of give us a kind of say the nation relative to drug delivery, how many programs you are engaged with? How many month we thought to be beyond first discussion and - down the pipeline and then how maybe month becoming after that? And as a follow-up to that kind of go through the processes or the steps that bring more of these drug companies to you in your competitive positioning in that respect..

Fair. So first to frame the picture a little bit, in the future it's probably 10% of our revenue today that's focused on these drug delivery trials or biologics and drug delivery.

But they are very, very profitable procedures and they're made up generally of high revenue procedures themselves often like deep brain stimulation where they use two kits and two cannulas in a procedure and not just one. So it's a very attractive place for us to be.

Two, it's a perfect situation as to the value that we offer when it comes to decide a guide and confirm, right. So this is a situation where in some cases for gene therapy you've got an incredibly expensive tool that has truly personalized medicine that's been built specifically for that patient or for that surgical procedure.

And because of the expense it makes to create that, you want to make sure that you are as efficient and possible in delivering it. And that means getting it to the right place and making sure you've got adequate coverage of the target itself and that's the decide guide and confirm part. It's not just picking out your trajectory.

It's not just guiding the delivery of the right spot, but at the very end seen in place and confirming on those final scans that yes I got that exactly where I wanted to be, which is obviously crucial as part of a drug delivery trial for regulatory purposes, but there's no way that criticality goes away down the road.

So I think we offer exactly what we need is, that conduit or that pretty essential tool to these procedure. So that's kind of one part, which is good news for us, I think it's that highly profitable procedures that use a lot of our kits.

The second component is we're currently involved in five Phase I clinical trials today, where Voyager's Phase I trial is wrapping up and they're about to begin Phase II or III. There's at least one other trial that we are in. However, it's confidential trial and it's run through a third party.

So all we know is our ability to sell cannulas to that third party and we don't know exactly who that customer is, which trials has been using at this point. And then the third component, which is part of your question, is the opportunity for more. So I get that.

I believe there are three additional companies right now that are doing preclinical evaluation work with our device.

And again that we feel very good in our chances given our that the quality of our product, the education of our clinical specialists in that can system these procedures and our track record of already participating in some crucial trials. That's kind of the second part. The third part is, it does give us an opportunity and focus as well.

So I mentioned a few things in the first few months that we're trying to change here, we wanted to split this out into a new part of the business, which we titled biologics and drug delivery, and we want to position ourselves with these clinical partners as the premier delivery mechanism and companies work with.

And sometimes that just need a little bit of focus and it needs some ownership and rather than its operating 10% or 20% of three or four people's time, we're in the process of dedicating someone specifically to that role, the marketing efforts, the training efforts, the portfolio management, the funnel management, sales, and everything.

And we think with that focus, we can turn it into a bigger opportunity for us.

I hope that helps, Jeb?.

Yes and a follow-up if I may.

It seems this is a novel way to deliver, so I'm just curious what came first? Is it that now the people aware that they can deliver drugs, a good thing is blood brain barrier, such as Voyager, but that's attracting more drugs trials or is it that drug trials who are looking for a way to deliver and then evaluating candidates other ways to do it and then enhance that where do you stand, if they're looking for other ways, how do you sustain incredibly? How big our blue ocean opportunity is, that I guess?.

Yes, I mean I think it's incredible. I think the prevalence of the disease is that we're aiming to treat, whether it's cancers, whether it's epilepsy just 2 million patients in the U.S. that suffer, 500,000 of which as an example have no refractory.

So they tried a drug and they've stopped taking the drug because either the drug doesn't work or the side effects of the drug cocktail are so severe that the patient in the family would rather go through the seizures and have to deal with the side effects. There's Parkinson's, which is another million plus opportunity just in the U.S.

from a prevalent standpoint.

All time this is another one that's picking up and I think the delineation that we will end up being if there's always going to be that interest in finding that special vector that can truly cross that blood brain barrier and deliver targeted drugs to specific spot that's obviously something worth spending money on and there's tons of money and research going into that, which is driving new drug delivery.

But it's same time there's a lot to be said where if you can make the incisions small enough and the bear hole small enough that a patient in very comfortable going in for a one-time procedure or even a repeatable procedure where you maybe refill upon for rebel reservoir.

Now you turn it into a minimally invasive procedure and not a large open implant and I think that transition is what is going to continue to have a lot of money flooding into drug and biologics development, even if it does in fact required direct injection into a structure of the Brian.

So I think you're going end of seen both of those for decades to come. I don't see this is something that goes away. And you ask, why did it take so long to get into the neuro? It's really the last frontier that pretty much everywhere else in the body.

Is easier to get to than into the brain and now that we've seen so much progress and treatment throughout the rest of the body, a lot of eyes and attention are turning to neuro because it's so underserved today with huge patient prevalence issues because the issues that we see like Parkinson's and epilepsy that the symptoms are so often, so severe.

And like I said, the computer speed and processing has allowed us to understand the brain so much more than we ever have before and it's leading to new invention of drugs and different gene therapy that we think will benefit patients..

One last question. So I gather Voyager treatment may if it's approved be 120 - well over $100,000 per patients per treatments. And people are projecting thousands of patient's treatment per year.

Where are we in that scheme? Is there a way we fall out a bit and maybe do something else or can we think in terms of almost the one-to-one correlation and our utilizations relative to their trajectory?.

So there is a couple things to think of there. The first one is that in any business, you need to be the best.

So we will continue to strive to improve our product to make sure that we provide that Nordstrom level of service to our partners in the clinical side of things to ensure that they are always happy with our overall partnership and not just their experience with our product. Those are things that without a doubt we would do.

On the other side of the coin, if you're a company like Voyager, you'd rather not be tied to one specific delivery mode and you'd like to look at different options.

So whether we negotiated something to be the sole option or like I said before we're just the best option because we've earned it and we work closely and continue design and iterate products and maintaining some cases designed specifically for an individual company's needs. That's something that we're open to do. We make custom devices.

We make custom cannulas today. We're also a development shop for these companies to make sure that they can count on us in the future..

Very good. Thank you..

Okay. Thank you, Jeb..

Our next question comes from Matthew Campbell of Laridae Capital. Please proceed with your question..

Yes, hi.

I think I heard this correctly, you have 52 systems installed to-date, is that correct?.

That's correct. And that's not trending certain research laboratories, but those are clinical center themselves..

Okay. How big is that opportunity? How much you've been penetrating like the U.S. market that puts the market outside of the U.S. as well? Thank you..

Sure. So in the U.S. there if you're thinking about functional neurosurgery, there's about between 220 and 250 centers. That if you were to look online they would say yes, we have a functional neurosurgery program. So maybe they have the specialty or the technique or the type of patient there.

So from an actual brick and mortar standpoint, we're about 20% penetrated into the sites that do procedures. The reality is that of those 52 centers that we're in, in many cases there are very prestigious high volume centers as well. So we believe we've probably penetrated about 50% of cases as they exist today given our footprint.

Now to be clear that doesn't mean that every deep brain stimulation case at a given hospital that does DBS uses our system, we're still only penetrated probably 5% to 8% of DBS procedures. So there's a lot of opportunity there as well. So that's kind of one bite on the U.S.

Outside the U.S., you can always kind of use that rule of thumb relative to the opportunity being twice as much. We do have opportunities to go globally both in the near-term and longer-term. We haven't yet because so far we have really had to follow the success of some of the other technologies.

For example, if deep brain stimulation is not actively used in one country, it doesn't make a lot of sense for us to lead the way there if the partnered therapy isn't there. So what we're doing is we're watching a few things very, very carefully. One is where is the existing therapies taking off like deep brain stimulation and laser ablation.

We see that as a huge opportunity in the future partnering with Voyager and Monteris on core market development to get more and more of the minimally invasive laser procedures done. And the following where that happens in sites in the U.S., as well as opportunities globally.

Secondarily, a lot of the current and future drug companies that are interested in using our tools for delivery are often European companies as well and would like to deploy the site for clinical experiment patient and their trials outside of the U.S.

So we are in discussions there as well to use the drug delivery mechanism to carry us into certain geographies. And then finally, once we have our own therapies like this neuro aspiration sort of evacuation device, now we've got the therapy as well as the guided system together in one kit and one sales channel as well.

And in those cases, we can actually lead the way into certain geography outside of the U.S. instead of depending on someone else's therapy. Those are kind of the three things we're looking at before going globally..

Great. Thank you very much..

Sure. Thanks Matthew..

Our next question comes from Chris Toledo of SoundView Technology Group. Please proceed with your question..

Hey, I had one other question which is a little out of the box. But the press release you guys posted in January about one of the procedures, really peak my interest when the doctor said previously treated patient that had undergone conventional brain tumor surgery.

Basically refused to do it the conventional way and insisted on the minimally invasive ClearPoint option which is great.

But my question is, is there any kind of way that you guys could do something that would actually spur for lack of a better term sort of end market or user demand, for people that get educated, there's more and more people turning to the Internet and other sources to get educated about medicine.

Is there a way to do something like that?.

I think there absolutely is, timing though is everything and it's a little bit tricky from a cost standpoint as well as a regulatory standpoint. So you've got to make sure you're very careful. The two opportunities that we have active programs I would say and people working on today, one is something we call a sleep DBS.

So the vast majority - a lot of people don't know this, but the vast majority of deep brain stimulation procedures for Parkinson's are done in the operating room and are done with the patient awake for the entire procedure.

Because it's important to monitor the patient both their electrical activity as well as certain features relative to their tremor, relative to their speech, asking questions, alertness those types of things. And some surgeons are afraid to do that with a patient asleep because they lose access to that information.

One of the benefits of doing these procedures inside of an MRI is that you can get a lot of that same functional information from the scan themselves. So it enables surgeons to be able to talk to their patients and be able to say look, if you're very anxious about this surgery that's coming up there is a way to do it asleep instead of awake.

And you can imagine that is something we've done some research in the past to show that a large campaign around awareness or patient but that's even an option is something that we think could absolutely have a benefit.

Right now however, no company has a specific indication for asleep DBS, although there's the clinical lab evidence is kind of mounting over time. So either mining data or designing a new clinical study to fight for that indication is something that I think does have absolute patient outreach. The other one is epilepsy, another big opportunity.

I'm very passionate about where there's a very few laser ablation procedures today versus the potential. You look at the number of surgical cases that are done to treat epilepsy versus how many patients are out there are non-responsive? It's less than 1%.

So the reality is creating some awareness and building the clinical evidence about using this tool to treat epilepsy patients in a very minimally invasive fashion. Once they know that an opportunity, not just for themselves, but a lot of time this is a parent presenting options to young child.

In those situations you can't imagine that awareness can play a big role. You just have to make sure you get the right regulatory indications and the right clinical proof points before you go do a patient advocacy group is an example..

Okay.

It does sound like a great 60 minute segment that's what I'm thinking?.

That's right and there are to be clear these procedures are being done and clinical evidence has been gathered and that was nice about us having a product that's used in so many of these procedures as we have an incredibly valuable database that we can draw from to create new clinical publication or really design future clinical trials as well..

Okay, great. Thanks a lot guys..

Sure. Thanks Chris..

Our next question comes from Jeff Richard of Private Investor. Please proceed with your question..

Hi, Joe. Happy to have you on board..

Hey, thanks..

I've got a couple things one real quick comment is I know I've been frustrated in the past with what seems to be a lack of marketing of the stock itself and - out into the institutional world and individuals, but I hope we see a trend getting investors more excited about the stock itself in the marketplace and the overall performance, which year-over-year, quarter-over-quarter seems to be in the right direction all the time.

But that's not really my question.

I really wanted to focus in on which I think is the crowded room with radiology and the MRI suites and are you seeing a trend and I think I read about this at in Harvard, where they've actually incorporated an MRI sort of operating suite that are all kind of in one because of the probably some of those frustrations and it's teaching hospital and they want to be kind of cutting edge Are you seeing a trend towards that? In other words, taking sort of radiology out of the room and putting the MRI in the operating suites itself?.

Yes, we're absolutely seeing that that the Company that focus is very closely on that company called IMRIS, which is owned by Deerfield Imaging. That's effectively what they create right. So they designed the room. They put the MR and all of the MR capable, OR equipment in there. The MR itself is on almost like a train track if you will.

So you're actually transforming the operating room into an MR suite for certain procedures and it really is important for a laser ablation procedure as an example.

So way those procedures work is even if you don't use us, the patient have to get into the MRI at some point because you can't turn the laser on unless you're looking at the MR scans to manage the temperature. So even if you put it in the operating room, eventually that patient is going to end up in the MRI.

Our position is quite wide transport the patient either down the hallway or in one of these, sort of intraoperative MRI system versus just doing the entire procedure with us. But nonetheless is that's a perfect example of kind of a leading installation of a solution that is designed to drive these disposable procedures in the future.

So that trend is absolutely there. The challenging part of course is these are very, very expensive systems to go in and the author required a lot of planning.

So I know that the interest is very high and like I said before we celebrate any time one of those intraoperative MRI solutions goes in, sometimes it just takes a while between the moment you're interested and have the surgeons on board to do it versus when construction is done. But like you said the trend is absolutely there..

I am assuming we're early on in that trend, so that's part of the issue..

That's correct, yes..

That's it for me..

Okay. Thanks Jeff..

Your final question is a follow-up from Jeb Terry of Aberdeen Investment Management. Please proceed with your question..

Hi Joe. To your point about laser ablations in the notion of having to go verify placement and in MRI and I guess my question has to do with the paper that was published last year about safety and basically saying almost [indiscernible], it's not safe to take a [indiscernible] patients down the hall to MRI suite with a [indiscernible].

And I was just curious where that might stand and amongst the sites they are regularly doing laser ablations.

Are they adopting that recommendation or they still somewhat in - violation of their recommendation?.

Yes. I mean I don't know if they're in violation of using anything. The things I would point to, number one is where that paper is really helped us, it's not just creating awareness, but it also helps us to defend our pricing of both our capital and our disposables.

When you're considering the cost of sort of the overall acquisition cost of using a ClearPoint system compared to the risk of one hospital acquired infections that could have been prevented and the math starts to work out in our favor very, very quickly. So that's one place where it's a powerful tool for us.

The second part is making that absolutely part of the story and saying like, look you partnered with us, what is the two big advantages we'll provide you for laser ablation? The first one is what we just discussed.

Stop transporting the patient through the hallways, you can actually do it right there in the MRI if you are using us, you can do the entire procedure there and free up the operating time in the operating room, so that's one example.

The second example is the one where if you're doing a laser ablation inside the operating room, you're co-registering all of the location data to images that have been taken either the day before, the week before et cetera. So the reality is that every time you co-register something, you're introducing some source of error.

If you've now transported the patient after you've put it where you think you put. Take them down to the MRI, take an actual image of where is that laser catheter is now placed and you don't see it in the right spot. You then have two questions or two options.

One, you take the patient back to the operating room and replace it because your MRI wasn't set up to do any part of the surgery there. Or two, as a surgeon you have to say, well I think I'm probably close enough. And it's a very advanced technology. It's in the very early stages getting into clinical use.

And we believe we are something that can really help it long-term because if early clinical data or early clinical results don't show huge benefits, a lot of times history has proven us that's because maybe it's not that the therapy itself doesn't work, but maybe that therapy wasn't targeted to exactly the right spot.

And with us you again - you get that confirmation that you're doing it in the right spot each and every time and we think that's going to be an advantage for us..

Thank you..

Thanks, Jeb..

Ladies and gentlemen, we have reached the end of our question-and-answer session. Mr.

Burnett, would you like to make any closing remarks?.

Sure. Thanks. As I believe you can see we're very excited with our results for 2017 and with the opportunities ahead to develop and then execute on all four pillars of our growth strategy. We are committed to becoming an essential part of any modern neurosurgery suite and have a talented team in place with clear purpose to make it happen.

We plan to attend the multiple upcoming Investor events, including the MicroCap Conference in New York on April 9 and 10 and the LD MicroCap Conference in June, plus additional events and non-deal road shows over the next few months.

If you have interest in meeting at these or other events in the future, please contact Matt Kreps, the Darrow Associates, our Investor Relations firm, using the contact information on our press release. They will work to ensure you added to our meeting rosters at these or other upcoming events. Thank you very much..

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