Good afternoon. And welcome to the Oculus Innovative Sciences’ Fiscal Second Quarter 2015 Conference Call. My name is Kevin, and I'll be your coordinator for today's conference. At this time, all participants are in a listen-only mode. At the end of the call, we will be holding a question-and-answer session with the company management. [Operator Instructions] As a reminder, this call is being recorded for replay purposes. I will now turn the call over to Mr. Dan McFadden. Please proceed, sir.

Thanks, Kevin, and thanks everyone for joining us. Good afternoon. With me on the call today are our CEO, Jim Schutz; and our CFO, COO, Bob Miller. We will open the call with Bob Miller's review of the financial results for the quarter, followed by Jim Schutz’s update on current activities and -- future activities and then close with Bob Miller going into greater detail. This afternoon Oculus issued a press release detailing fiscal second quarter 2015 financial results and recent corporate developments. A copy of the release can be downloaded from our website which is www.oculusis.com, or you can call Investor Relations at (425) 753-2105 and we’ll be happy to assist you. Before we begin, I'll remind listeners that this conference call contains forward-looking statements within the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by use of words such as expect, to expand, would, and anticipate, among others. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially, including risks inherent in the development and commercialization of potential products, the risks that potential clinical studies or trials will not proceed as anticipated or may not be successful or sufficient to meet regulatory standards or receive the regulatory clearance or approvals, the company’s future capital needs and its ability to obtain additional funding and other risks detailed from time-to-time in the company’s filings with the Securities and Exchange Commission, including the quarterly report on Form 10-Q and the annual report on Form 10-K. Identified product applications and/or uses are intended to highlight potential applications for the investment community and does not infer that the company is marketing for these indications. The company does not provide any assurances that such applications will receive regulatory approvals. Oculus disclaims any obligation to update these forward-looking statements. So I will now turn the call over to our CFO, Bob Miller. Bob?

Thank you, Dan. I'll first summarize our financial results for the second quarter and lastly, we will address some of the general revenue growth guidelines and new product initiatives for some of our business segments. Moving now to the summary of the results of our second fiscal quarter ending September 30, 2014, instead of repeating the financial results, which are already provided in the press release, I will only cover the highlights of the financials and also talk about the initiatives we're working on to reignite our revenue growth. Product revenues were down 20%, compared to the same period last year, with declines in U.S., Middle East and China, partially offset by increases in Europe and Mexico. The decline in product revenue for the quarter of $780,000, compared to the same period last year is mostly explained by the declined in the animal healthcare business of $922,000. The decline is occurred because our foreign partner is transitioning to a less expensive and we believe lower quality source of HOCl. The silver lining in this product is that we are currently in the process of transitioning this business to two new U.S. animal healthcare partners, who are experts in this market. This declined animal healthcare sales is further magnified by the fact that the quarter ending September is by far the largest quarter seasonally due to large sales in the summer months. Let me briefly cover the revenue growth of other segments. First of all, in Europe, revenue growth for the quarter was 26% with new product launches and new country specific distributor partners. Secondly, in Mexico, our sales growth rate was 14% with a 34% unit growth, with strong increases in the hydrogel and 120 liquids units. Thirdly, the revenue growth from our U.S. dermatology partner is down to the…

Thank you, Bob. As Bob said, I’d like to spend just a few minutes today on our plan to transform Oculus into a specialty pharmaceutical company, focused on dermatology and for our new shareholders, at least look back to explain why and how we're changing courses. As many of you know, our Microcyn products have been used on more than 5 million patients around the world and have been clinically proven to be safe and cost effective in over 33 clinical studies. To our knowledge, our advanced hypochlorous acid or Microcyn products are the only compounds in the world with a unique combination of the following characteristics. One, safer saline and can be used around or in the mouth or nose without harm; two, it’s a broad spectrum antimicrobial killing bacteria, certain funguses, viruses and spores with a unique motive action that does not promote resistance. And three, it’s therapeutic with clinical evidence showing reduction of inflammation, itch, pain, scarring, all while increasing oxygen. Because of those unique technology characteristics, our products have applications in a wide range in different medical and industrial markets, including dermatology, wound care, surgical care, animal health, in the eye, in the nose, throat infectious diseases and so on. As a result of these many market applications, we adopted a partnership strategy. In other words, a strategy defined sales partners in these markets and out licensed our products. Examples of these types of partnerships included Onset and Quinnova in dermatology. Ferndale Eloquest in acute and wound care, Union Springs in the first responder market, Innovacyn in animal health care and many sales partners in acute and wound care outside the U.S. The benefits of this partnership strategy were that we established the safety and efficacy of our Microcyn products in multiple markets. We gained knowledge…

Thank you, Jim. With this new strategy and transformation in mind, what have we done thus far to implement. One, we recently hired an experienced dermatology management team and a relatively small sales force, most of who are seasoned sales veterans that have established relationships with dermatologists in the respective territories, supplemented by our already existing inside sales force. Secondly, last month, in mid October, we launched two prescription dermatology products in the United States under the [Livercyn] [ph] brand name. And as a result, we have contracts with all the major wholesalers and are stocking the major pharmacies. In early December, we plan to launch our scar product [indiscernible] into the prescription dermatology market. In addition, we have lined up a robust product pipeline, which we intend to launch over the next 12 months. To that end, we have licensed several proprietary non-Microcyn technologies, which diversify our product pipeline. Number three, as a part of these launches, we have developed and executed a unique product pricing strategy, which we believe addresses many of the challenges associated with the current pricing and rebate programs in the prescription dermatology market. Number four, in Europe, as we announced recently from several press releases, we received CE Mark approvals for acne atopic dermatitis, scar reduction and the treatment of skin procedures. Also, we have hired an experienced European Product Manager, who is in the process of assembling a European distributor network to launch these products. With our transformation into the dermatology market, what will our financial future look like, or stated differently, how do we expect our financials to change over the next several years?. Currently for the quarter ending September, sales in Mexico were $1.5 million, and as a percentage of total product sales were 50%. European and Western world was 18%,…

[Operator Instructions] Our first question comes from Dan Trang with Stonegate Securities.

If one of you can provide a little more color behind your new direct selling model, and what are some of the advantages of going after that route?

We’ve been in the dermatology market for a while at this point, two partners, through both Onset and Quinnova. And as Jim mentioned, we think it's the product margins and the pricing are a very strong in a dermatology market. It's a very concentrated market in terms of the 3000 to 5000 derms that can be covered by relatively small salesforce. The ramp is generally six to nine months. We’ve three or four ramps using our products in their markets and they’ve all been hit somewhat of -- peaking at six to nine months and then grow slow after that, which means it's really quick to cover the expenses within like couple of quarters to cover the expenses of the direct -- expenses of the sales group. So we think there are huge number of benefits to doing this, one of which is controlling to growth of our revenue. When we have partnerships like for instance in number of our partnership that we had in the past, they were picking the priority of our product. And they would initially start out P1 and then drop again to P2 or P3. And as a result, they gave less emphasis and our growth or product revenue would drop off. So with the partnership model, we found that we cannot sustain a growth in the revenue. With a direct sales force model, we can -- we do believe we can sustain that growth and revenue overtime and enable us to diversify into different product lines, non-Microcyn product lines and become experts in both the dermatology products and the advanced tissue products.

Okay.

I may have answered, more than answered your question with that.

No. Thank you for the color. I appreciate it. Thank you.

That’s okay.

[Operator Instructions] Our next question comes from [Mile Smith] [ph], he is a private investor.

Hi, Bob.

Hey, Mile.

Hi. You introduce the throat infection product in Europe and Mexico, so I have two questions. One, how is it going, two, when do you think you might get approval in Europe, and three, you didn't mention anything about this throat infection and infection products, where is that fitted in your scheme of things?

So, what -- you’re right. The product was launched by More Pharma in the Mexico and it is still being launched, still it’s being sold, it’s growing and as part of that growth, which was 14% this quarter, unit growth was actually 34%. So, as part of that growth, so that -- we expect that to continue to grow, we actually did receive a oral approvals in Europe, receive more oral approvals and we’ve actually had some of those that have been approved. We are working on the oral area and we would expect to see some announcements relating to the oral over the next six months. We especially focused on both Europe and the United States. Does that answer your question?

How do you see this, one last thing, how do you see this application as opposed to dermatology, which do you think would grow faster?

The dermatology, we are putting our entire -- our primary focus on dermatology and secondary on the advanced tissue. Oral would be a third that we would have. But that -- we don’t think that needs a complete direct sales force at this point. We think that can be done differently and without a lot of money.

Great. Thanks very much, Bob.

[Operator Instructions] And I’m not showing any further questions at this time. I’d like to turn the conference back over to our host for closing remarks.

Thank you all for joining us today. We look forward to speaking to you, signing off.