Good afternoon, everyone, and welcome to the Third Quarter ended September 30, 2018, Financial Results Conference Call for American Shared Hospital Services. [Operator Instructions] I will now turn the call over to Vivian Cervantes with Investor Relations.

Thank you, Operator. Before turning the call over to management, I would like to make the following remarks concerning forward-looking statements. Please note that various remarks that we may make on this conference call about future expectations, plans and prospects for the company constitute forward-looking statements for the purposes of safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may vary materially from those indicated by these forward-looking statements, as a result of various important factors, including those discussed in the company's filings with the SEC, including the company's annual report on form 10-K, for the year ended December 31, 2017, its quarterly reports on Form 10-Q for the 3 months ended March 31, 2018, June 30, 2018, and the definitive proxy statement for the Annual Meeting of Shareholders held on June 14, 2018. The company assumes no obligation to update the information contained in this conference call. I would now like to turn the call over to Dr. Ernest Bates, Chairman and Chief Executive Officer. Dr. Bates, you may begin. Ernest A. Bates: Thank you, Vivian, and thank you, everyone, for joining us on our third quarter 2018 Earnings Conference Call. Our agenda this afternoon is as follows. Following my prepared remarks, Craig Tagawa, our Chief Operating and Financial Officer, will walk through business and operational results. Alexis Wallace, our Controller, will then provide our financial review, after, which, we will open the call for your questions. We are pleased to report steady progress at our Health Center -- Cancer Center-Orlando Health Proton Center during the third quarter despite a business disruption from a water leak in our single room proton centers. That's why our total revenues declined 3% year-over-year. Proton revenues increased 11% and was up in an estimated 42% assuming no big disruption. A key driver for our growth are single room proton center at Orlando continues to record increasing system utilizations. And with benefits from the tax act, we posted around a 70% earnings growth in the quarter. Turning to our pipeline. We're making progress on new business and development have made the finest rounds for our single room proton project. We're also in talk to place a proton unit in our hometown of San Francisco. We remain focused on additional proton therapy in Gamma Knife centers. We plan to provide timely updates on these activities. With that, let me now turn the call over to Craig. Craig K. Tagawa: Thank you, Dr. Bates, and good afternoon, everyone. We're encouraged by our trends at our Orlando Health facility, where we continue to see increasing numbers of patients treated. As noted earlier, in the third quarter, while total revenue declined 3% compared with a year ago period, proton therapy revenues increased 11%. Excluding business disruption from the water leak, proton therapy revenues would have increase an estimated 42%. We are pleased to report sustained increases in the number of protons fractions, which increase 141 or 15% to 1,081 during the quarter. As previously noted, Orlando Health is continue to expand its use of the proton system, aided by steady flow of research studies demonstrating the clinical benefits of this advanced therapeutic technology. We continue to believe proton therapy represents a significant long-term growth opportunity for us. Turning to the gamma knife. Ongoing transition to 2 new sites, total procedures declined by 42% or down 11% to 337 during the quarter and revenue was down 10%. Third quarter volumes at 3 sites were impacted by personnel issues and turnover, it has since normalized. In coming months, we expect one more Gamma Knife site contract to terminate but it is a low volume site and will not significantly impact procedure volumes or revenues. That said, we remain encouraged by volumes that are ramping up at our 2 new sites in Lima, Peru and Lincoln, Nebraska. We also look forward to contributions from our recently announced third site in Merrillville, Indiana, which we expect to be in operations in early 2019. I will turn the call over to over to Alexis for a detailed financial discussion.

Thank you, Craig. Before I begin my prepared remarks, I would like to call your attention to our third quarter 2018 earnings results we've issued this morning. As the 3 months ended at September 30, 2018, rental income from medical services decreased 3.1% to $4,470,000 compared to rental income from medical services of $4,613,000 for the third quarter of 2017. Net income attributable to the company for the third quarter was -- of 2018 was $168,000 or $0.03 per share. This compares to net income attributable to the company for the third quarter of 2017 of $99,000 or $0.02 per share. Third quarter revenue for our proton therapy system installed at Orlando Health, increased 11.3% to $1,041,000 compared to revenue for the third quarter of 2017 of $935,000. Revenue from our Gamma Knife operations decreased 10.4% to $3,194,000 for the third quarter of 2018 compared to $3,564,000 for the third quarter of 2017 due to personnel issues at 3 customer sites, which have been then resolved. Rental income from medical services gross margin for the third quarter of 2018 decreased to $1,634,000 or 36.6% of revenue compared to rental income from medical services gross margin of $1,882,000 or 40.8% of revenues for the third quarter of 2017. This reflected a decrease in Gamma Knife revenue and an increase in cost of revenue, primarily attributable to the initiation of maintenance and service costs for the company's proton system in Orlando. Non-GAAP pretax income, net of income attributable to the noncontrolling interest, was $250,000 for the third quarter of 2018. This compares to non-GAAP pretax income, net of income attributable to noncontrolling interests of $263,000 for the third quarter of 2017. Adjusted EBITDA, a non-GAAP financial measure, was $2,467,000 for the third quarter of 2018 compared to $2,412,000 for the third quarter of 2017. A reconciliation of GAAP to non-GAAP financial measures is provided in our release third quarter 2018 results. Cash and cash equivalents and restricted cash was $2,189,000 at September 30, 2018, compared to $2,502,000 at December 31, 2017. Shareholder's equity at September 30, 2018, was $31,023,000 or $5.43 per outstanding share. This compares to shareholders' equity at December 31, 2017 of $29,885,000 or $5.23 per outstanding share. This concludes the formal part of our presentation. We would like to turn the call back over to you for questions.

[Operator Instructions] And on the line, we have Anthony Marchese.

Couple of questions. Could you be able to be more specific on your new business opportunities? You mentioned -- I guess, if I'm not mistaken, you mentioned 2: One, you're a finalist in something, and one, you're looking to do something in your hometown in San Francisco? Could you just -- if you can elaborate on those? Craig K. Tagawa: Well, what I would say is, yes, we've been selected to -- as one of the finalist on a RFP that we will be responding to further. So it's not a transaction that's close, but it's one that is moving very rapidly. So we should know fairly soon as to whether we're selected or not...

I'm sorry. Just to focus on that one for the time being. Is that -- can you share with us where that's located? And sort of timing of the final decision, as far as you -- I have realized things changed, but could you maybe be a little bit more specific as to where that is? And the timing of any final decision? And how many finalists are there? Craig K. Tagawa: I can't, due to confidentiality requirements, disclose any more than we've currently done, Tony. Ernest A. Bates: But it is in Northeast.

Okay. And finally, any timing -- since we don't have the name, is there any indication of when the final decision will be made? Craig K. Tagawa: Probably, some time, either later this year or early next year.

Okay. And the other opportunity you mentioned in San Francisco? Ernest A. Bates: Yes. We've been negotiating with the city of San Francisco to place of single room unit in the building that they own. This is looking promising. We are also in discussions with 2 hospital centers that would utilize that facility. We're hoping that the city will make a decision by the end of the year whether or not our proposal is acceptable.

Okay. And could you also elaborate a little bit more on the Gamma Knife business and the personnel issues? It just seems odd that 3 centers would have -- are they the same problems? It just seems odd that 3 centers would have exactly the same issues, unless they're somehow related. Craig K. Tagawa: They're not related, but they are where we had turnover at several of the centers. And they're actually probably about 4 of them, where we've had various team members that have relocated. And that always disrupts service where a couple of them where due to businesses relocations and one is a radiation oncologist, and another one is a neurosurgeon that was really the champion of the program. So some of these issues have been ongoing, but they haven't really change the volumes. We just noticed that they, in the third quarter, it did. A couple of them, they're probably going to be into the first quarter when it's really normalized, but we're seeing in 3 of them that it is normalizing in the fourth quarter. It's not -- what I would say is -- go ahead, Tony.

No, no, no, go ahead. I'm sorry. I didn't mean to cut you off. Craig K. Tagawa: What I would say is, the times have changed, and we're seeing that people moving around more than they used to, especially at some of the non-academic centers. So I think, we're seeing more of it over time, but I think, one of the things we face this before, we've handled them. It's -- and we'll see it again. We're handling it currently and it's going to happen in the future. People do relocate. So part of what we do is we work with the hospital partners to make it as painless as possible, but it's not the case that it takes time to get new personnel in there and get them up to speed.

Right. Okay. And just a commentary. You mentioned, shareholders' equity of over $32 million-- if I'm not mistaken, sort of a $30 million, $32 million and the stocks market count is today $16 million. So I'm trying to reconcile the disconnect here, you're cash flow positive, net income positive, the stock trades are half of what I think is close to tangible book. What if anything do you guys feel you can do to try and narrow that gap for the public shareholders? Ernest A. Bates: Well, we're going to microcap conferences. We did one in New York about 2 months ago. We're going to be doing one in Los Angeles. I think, the responses have been very favorable through these conferences that we've done so far. And we plan to continue to do these throughout the rest of this year and next year.

From Aegis Capital, we have Tony Polak.

Could you give us an idea of what type of cancer, is it brain cancer that the proton beam therapies are treating? Or are there other cancers? And what kind of utilization is being done at the Orlando facility in terms of -- versus capacity? Craig K. Tagawa: I would say, that the -- the type of cancers throughout the body, there are CNS cancers that it treats, there are lung, there are breast, some head and neck... Ernest A. Bates: Children? Craig K. Tagawa: At Children, they do quite a few at Orlando because they have a very large children's hospital on the campus. So they do a multitude of cancers that they treat, the prostrates, just like all of them and -- but it's a mixture. And what we're seeing is that they treat some more complex cases at Orlando. So we're very pleased with what they have done. They are going to start doing some clinical papers, which I think are going to be very, very insightful and very helpful for moving the technology along. And I think it'd be very helpful with the private payers, who are still the most difficult to convince. But I think as more papers come out, showing the benefits of proton therapy, I think, we'll start seeing expansion of the indications that are both treated and reimbursed.

My second question about the capacity and where they stand versus how much they do? Craig K. Tagawa: Yes, they've -- I think they've average probably about last quarter, probably they would have averaged about 21 or 22. The capacity, it depends on the complexity of the cases you're treating. In general, you can -- the slots are between 22, 23, 25 minutes apiece. For children, it might be 45 minutes apiece. And about 17% to 18% of the cases that are treated in Orlando are children, because that's a very good use of the machine and they do have a large children. So that does impact the number of patients that they can get through but it's really what it does, one of the things it does best.

All right. Originally, a few years ago, when I looked up the proton beam therapy, it was isolated for just a few type of cancer. It seems like they're treating all type of cancers now. Is that right? Craig K. Tagawa: Yes. Ernest A. Bates: Yes, the indications are increasing every year. Craig did not mention that we are sponsoring a research program now at Orlando on pancreatic carcinoma.

As Mevion sold a lot of machines? Can you tell me how many machines they have sold so far? Craig K. Tagawa: I think, if you look at their website, it probably give you the best indication. I think they announced one that, I believe, that the University of Utah was the last one that I've seen. Ernest A. Bates: I think they recently announced one in China. Those are the most recent announcements.

And I assume the ones you're negotiating for in San Francisco is a Mevion operational cell or is that just a wrong assumption? Ernest A. Bates: That is our first choice at this point. One of the hospitals that we're talking to would probably prefer a Varian machine, but we haven't made that decision yet.

Okay. Is the MEVION machine a lot cheaper than the Varian machine? Ernest A. Bates: It's cheaper.

[Operator Instructions] And from Mutual Trust Company of America, we have Lenny Dunn.

I don't need to be convinced of the MEVION or the profitability of installing one of these machines. Have been convinced for a while, but with -- is operating so efficiently in Orlando, it would seem like that's a strong example, when you're going through a sales process of convincing somebody else to install. And the only thing that I find a little disturbing is just the length of time that this has been taking because it seems like every 3 months, we hear we were very close, but then 3 months later, we're still very close. So are we truly very close this time? And do we -- do you have other -- I know that have other ones in the sales process besides the 2 you mentioned. Is it possible, may be one of those will come to fruition pretty quickly? Craig K. Tagawa: Yes. I think, we do have others in the hopper, Lenny. We're not just stuck on one. We do have others. It is frustrating I can -- for everybody that it takes a long period of time to do these. These are different than Gamma Knife projects or linear accelerator projects in that they are a lot more expensive, both for us and the hospital. So it's just a process where the hospital -- if they're going to use our model where like we did in Orlando, where they're going to pay for the construction and we'll pay for the equipment. It's a double-edged sword and that, they would have to come up with probably $10 million to $12 million to $13 million for this -- their portion. And that's a fairly good sum that they'd have to contribute to really which is still a niche market. And -- but it gives them a competitive advantage in terms of total cancer care. So I think, it's important for those centers that want to be at the forefront of cancer, but it's still a very time-consuming progress, and it's frustrating for us as it is for you to go through this and see how long it takes but we are getting further along on some of these, and we hope to be able to push them over the finish line shortly. Ernest A. Bates: Lenny, it's our analysis, shows that the unit at Orlando is probably the second busiest single-room unit probably in the country and in the world. And we really think they're ready for a second unit, but it's their decision. And we talk to them about -- once a month about putting in the second room but it's their decision. And I know eventually, they'll make that decision because it's the appropriate thing to do. And they're going to have competition in Orlando, soon, if they don't do it.

I understand. And also, I mean just from the standpoint of the patients, the patients are far better off if they have access to the proton beam. So you would think that, that would be a catalyst also but it's just taking forever. Craig K. Tagawa: Yes. Ernest A. Bates: We're in agreement. Craig K. Tagawa: Yes.

Okay. Do you -- obviously, this will be announceable so we wouldn't have to wait for the next conference call, if you'd be able to close the deal. But if you're going to close the deal, it obviously, it would have to be done before Christmas. Because the last week or so of the year, I doubt that anybody's going to close the deal. So if we're are going to get it done this year, it has to be over the next 4 or 5 weeks. Craig K. Tagawa: Agreed, but that's outside of our control unfortunately, so..

Yes, but wouldn't the medical need make them want to prioritize this a little more? Craig K. Tagawa: Well, I think, that everybody just has to go through their process, Lenny. And so we have no control over that, that process really so. I can't speak to that, to be honest with you.

Okay. But the volumes of the Gamma Knife business continues to churn out dollars and they -- but we continue to sell for half of what I consider a tangible book value? And just, market is not paying attention because I think the market wants to see a sign another proton beam. I think you're going to -- you can go back to book value in a hurry if you do. Okay. That's my comments.

Okay. We have no further questions at this time. I will turn it back to Dr. Bates for closing remarks. Ernest A. Bates: Thank you for joining us this afternoon. In summary, we continue to drive our business volume and reimbursement trends in proton therapy at Orlando. Our facility are fueling our efforts to replicate this business in new markets. As previously noted, we have made the finalist round for a new single room of proton project. We're also in talks to place a unit in our hometown of San Francisco. And Gamma Knife, we're encouraged by volume trends at our 2 new sites in Lima, Peru and Lincoln, Nebraska. And our Merrillville, Indiana site is on track to begin treating patients in early 2019. We continue to plan to add to our Gamma Knife centers and we look forward to providing timely updates on the activities and we remain focused on driving steady gains in revenue and earnings performance. Again, thank you for joining us. And we look forward to speaking to you on our fourth quarter conference call.

Thank you. Ladies and gentlemen this concludes today's conference. Thank you for joining. You may now disconnect.