Good day, ladies and gentlemen, and welcome to the Oculus Innovative Sciences Fiscal Third Quarter 2013 Conference Call. [Operator Instructions] As a reminder, today's call is being recorded. I would now like to turn the conference over to your host for today, Mr. Dan McFadden. Sir, you may begin.

Good afternoon, and thank you for joining us. With me on the call today are Oculus Founder and Ruthigen CEO, Hoji Alimi; Oculus CEO, Jim Schutz; Oculus CFO, Bob Miller; and Ruthigen CFO, Sameer Harish. We will open the call with Hoji's discussion of our third quarter business development. Next, Jim Schutz will review the company strategic business plan moving forward. This will be followed by Bob Miller's review of our financial results, and finally, Sameer Harish will say a few words on behalf of Ruthigen. This afternoon, Oculus issued a press release detailing fiscal third quarter 2013 financial results and recent corporate developments. Copy of the release can be downloaded from our website, which is oculusis.com, that's O-C-U-L-U-S-I-S dot com or you can call Investor Relations at (425) 753-2105, and we'll be happy to assist you. Before we begin, I 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 risk inherent in the development and commercialization of potential products; the risk 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 Hoji Alimi.

Thank you. Good afternoon, and thank you for participating on this conference call. Today, I have Jim Schutz, Oculus' new CEO; and Bob Miller, our CFO, who will focus on Oculus' business; and Sameer and I will be discussing the Ruthigen business. 4 years ago, we made a decision to transform Oculus into a commercial health care company. Today, as you're sitting here on this call, Oculus has global reach into at least 21 countries, in several uniquely defined markets, with established partners who are funding the sales and marketing efforts of our 60-plus products. These commercial market opportunities, in aggregate, presents a sustainable rate of growth over the next few years for Oculus, not only to achieve profitability, but to grow the top line, as well as improving the bottom line. Just as a few highlights, More Pharma, which we closed the sale nearly a few months ago, now with over 1,000 salespeople, they are planning to expand our product reach, not only in Mexico, but into larger markets, including Brazil, Argentina, rest of Latin America and South America. On the animal health care front, our animal health care partner continues to show sustainable and meaningful growth rates in their market. And in the dermatology market in the U.S., our derma partner has shown almost more than 100% growth even though on small numbers, in product sale in the U.S. And we are now in the process of planning and supporting their additional Microcyn-based product launches and new indications in the current year. So lots of great challenges ahead of us. In addition, we are in preparation of announcing our top line data for our scars management trial in the next, hopefully, 60 days. We have now a healthy and a strong company in form of Oculus, with a…

Thanks so much for the kind words, Hoji. I'd like to take just a few minutes today and cover 3 areas before Bob jumps into our numbers for the quarter. I'll focus, one, on the highlights from the quarter; two, how we're running the business during this exciting time in preparation for Ruthigen and its eventual spin-off; and then three, a peek ahead post-split. So first of all, current quarter highlights, and I'd like to focus on growth, profitability and then cash. From a growth perspective, we're very pleased with the growth we're seeing south of the border from our new partner, More Pharma, in their first full quarter. Units, pricing, customer feedback, we're getting very good robust feedback on their efforts. Our friends at More Pharma have a saying that, I assume, is an American football saying. They want to catch the business before they run. From what we've seen to date, they've done a good job catching our customers and now, we look forward to a long run. For our Wall Street analysts, please remember specific to growth in Mexico. Unit volume is up. Dollar volume is down and will remain down for some period of time due to our fall 2012 deal structure, but net-net, our profitability is greater because of the SG&A reduction. So we're very pleased with what we see in -- next on south border. Our annual health partner, speaking of growth, as Hoji mentioned, their unit volume growth is up 33% for the quarter. And then finally, our dermatology partner, I had the pleasure of seeing Dan just outside of Philadelphia last weekend, we're very pleased with their efforts to date and their forward plan of attack. Continuing on for the current quarter highlights, profitability, you will see in our press release and…

Okay. Thank you, Jim. I'll first discuss the status of our listing requirements on the NASDAQ; secondly, I will indicate how we did in our guidance for the December quarter; third, provide the guidance for the fourth quarter of fiscal year 2013; and lastly, summarize our financial results for the third quarter. At this time, there are 2 primary criteria we need to maintain or exceed to remain listed on the NASDAQ. One is the net worth test, which needs to remain above $2.5 million. As of December 31, 2012, our net worth was $3.1 million, which is obviously above the required guideline. The second is that the stock price of Oculus must be above $1. To comply with this guideline, Oculus has filed a proxy statement with the SEC, which was sent to shareholders, proposing a reverse split of the shares. As a result of complying with the net worth test and setting in place a reverse split plan and our intent to execute it, we believe we will remain listed on the NASDAQ. How did we do on our financial guidance for the quarter ending December 31, 2012? We provided guidance of $3.2 million to $3.4 million for total revenue and achieved $3.5 million. We provided guidance of the $2.8 million range for cash operating expenses and achieved $2.7 million. We were well below the $1 million negative EBITDAS range, with the negative only $163,000 for the quarter. What is our guidance for the quarter ending March 31, 2013? For that quarter, we expect total revenue to be in the $3.8 million to $3.6 million range, cash operating expenses to be in the $2.8 million range and EBITDAS to be less than $500,000 negative. In the last several earnings calls, we provided revenue growth rate guidance for our…

Thank you, Bob. And thank you also, Hoji, Jim, the Oculus employees and our Board of Directors, for the warm welcome. The past few weeks as a company has truly reinforced my excitement about the tremendous opportunity to unlock the drug potential for RUT58-60 through Ruthigen by establishing 2 independently managed and funded companies. To take forward our unique technologies into distinct commercial markets, we must first ensure the health and stability for each entity. We are actively engaged with financial advisors, as well as our accounting and legal advisors to pursue external funding for our Phase II and Phase III clinical programs, surrounding RUT58-60, Ruthigen's unique anti-infective drug candidate during this calendar year. By shifting the burden of the high-expense drug development program to Ruthigen, our intent is to structure Oculus towards profitability and financial independence. We're all excited about the prospects for a cash flow positive Oculus going forward, with its strong partnership and M&A growth strategy. We have structured Ruthigen with an experienced team to optimize performance in achieving our development time line, while maintaining a lean internal cost structure. And we are focused only on activities that, we believe, will enhance shareholder returns through a structured and systematic approach in manufacturing and clinical programs, leading to potential regulatory approval. We believe RUT58-60 is positioned to improve economics surrounding surgical and traumatic markets in the U.S. And this market represents nearly 46-million-patient opportunity for the company. RUT58-60 is formulated to be compatible with internal organs and has increased concentration of active ingredients and can be sterilized, all very important features for the NDA process and to gain entry to the surgical suite. Commercially, I'm particularly excited about the potential for Ruthigen. Our health care environment is changing, and the time and degree of economic pressures to hospitals, payers and consumers adds to the uncertainty throughout the system. What is clear from our market research is the need for cost containment and improved hospital efficiency measures. We believe RUT58-60 has the potential to demonstrate significant improvement in economic and clinical measures, such as post-surgical time to discharge, post-surgical infection rates and hospital readmission [ph] rates. We thank you all for your interest in Oculus and Ruthigen. Ben, please open the call for questions.

[Operator Instructions] Our first question comes from the line of Marco Rodriguez from Stonegate Securities.

This is Dan Trang, sitting in for Marco Rodriguez. I'm wondering if you could give some color into what capital expenditures are going to look like post the spin-off and also going to SG&A?

Again, this is Hoji. Let me give you a comment, and then maybe I'll turn the call to Bob.

Yes. Maybe I should have directed my -- I guess, my question toward Bob. But I mean, Hoji, please.

The way we are restructuring the business is so that the expenses are increased, and they're really focused on profitability. But again, I'm going to let Bob talk.

So we gave guidance last time that we said that our normal -- after the More Pharma deal, we gave a guidance of operating -- cash operating expenses of up to $5 million going forward after the More Pharma, with the reduction of some -- of the sales and marketing expenses in Mexico and with some increases in the U.S. The expenses, if your question is, after we spin-off Ruthigen or is that your question?

Yes, yes, that's my question. Spin-off kind of what CapEx is going to look like kind of going forward and then going into SG&A and some of the operating costs.

Our CapEx expenditure as a company is fairly low. The machines to make the product is not as huge cost just like a paper machine. It's a very proprietary machine. It doesn't -- it's well less than $1 million to make. And we have a lot of that manufacturing in place already. So there's not going to be a lot of CapEx needed. There will be some, but it's relative -- a relatively small number, well under the -- probably even the $300,000, $500,000 level. The -- in terms of our operating expenses, the major change -- there are 2 people that would be on the spin-off. They would basically be not -- would be on the Ruthigen payroll and not the payroll for Oculus, and that would be Hoji and our Director of Regulatory. And therefore, we would see those expenses -- a reduction relating to those expenses.

And then, can I jump into this, Hoji. Maybe I can just -- I don't know how familiar you are with the story. But specific to the capital structure, you have 11 manufacturing lines already established. Each of the manufacturing line can produce roughly around $6 million in revenue annually. So really, for us to have need -- additional need to expand manufacturing lines, we got to exceed that $60 million in revenue. And each line, really, is going to cost us roughly, around, maybe less than $100,000 to build one and put in place, it takes about 3 months. In terms of SG&A, Oculus has no plans to increase SG&A cost. We just reduced our SG&A in Mexico, so it truly is relying on existing partners to fund, to sell the marketing efforts. I hope that answers your question.

Okay. And just a follow-up to that, as far as headcount concern, I mean, how much of the Oculus team -- is it just you and your Director of Regulatory? But I...

No, Dan, let me jump in. It's a little bit more than that. We are currently going through that process and we have to ask for your patience. Because there is an opening [ph] agreement and a licensing agreement will be signed between the 2 entities based on the opening [ph] agreement. So it's just obviously, from a control standpoint. You don't want any consolidation between the 2 companies, and that's why management is shifting. So we will have different boards and different managements allocated to each company. However, some internal resources will be shared, and the costs will be shared. And those are the areas that is still we are in discussions and have time to really cancel those out. And all that needs to be reviewed and approved, not only by the Board of Directors, but by our auditors and also get to SEC because, again, we don't want to trigger any control issue.

[Operator Instructions] Our next question is from the line of Jack Wallace of Sidoti & Company. Jack Wallace - Sidoti & Company, LLC: A question for you, in terms of the legacy organic Oculus moving forward, there -- there's talk about -- there's some M&A activity, maybe acquiring a product or 2 here and there. I guess my question is, what types of products would be looked at? The Microcyn Technology has phenomenal track record, both efficacy and safety. Is -- will these opportunities be standalone products? Or will these be other products, maybe even technology, that would work in tandem with the current Microcyn Technology?

Yes, Jack, the short answer to this is we are going to continue to provide a robust pipeline of Microcyn-based products to our partners. As we have demonstrated in animal health care, they have 40 plus; dermatology, they have 2, we are adding 3 more; and then wound care 7, and we are adding more. But in order to wrap revenues up, we also wanted to listen, being in listening mode to our partners, and ask them what else do you need that we can provide to you. For example, there are areas where Microcyn can be packaged with another product as a chip and then be sold in the market. And you can piggyback right on another product. So I'm not telling you that this is what we're going to do. I'm just giving you an example, like skin graft plus Microcyn. One of the major issues with the skin grafts are, when there's an infection, it won't take. But when you add Microcyn, it significantly increases the rate of take on skin grafts. So there are a lot of areas for Microcyn, number one, there will be synergy between Microcyn and another product. But more importantly, there needs to be an appetite by an existing partner or a future partner to immediately put it into sale and distribution and invest behind that product. So those are the areas that we are looking at. And obviously, we will look at the rate of ROI, making sure that this -- really, this is an added value. It's not a diluted event. Jack Wallace - Sidoti & Company, LLC: Got you, that's certainly helpful. And my next question is kind of a piggybacking, although the last one's asked about the -- just kind of the people in the facilities going through the transition and then a segregation of the 2 companies. You mentioned that both yourself and another head in the high place will be moving, plus maybe some underlying staff. But the real question I have is about the facilities. I know you said that there's plenty of capacity, and there's -- it's not very difficult nor expensive to create more. And he's also mentioned that some of the costs are going to be shared. I was wondering if you can give us a little more detail on how those costs might be allocated, and maybe this is too early a question...

Jack, I think, a general -- I can give you a general view, but I can't give you much detail on [indiscernible]. We have the details all sketched out. But I can tell you where we are going with our Board of Directors, as well as with our accountants. The thing that we want to accomplish is, as Sameer mentioned earlier, is Oculus has been ramping up its revenue. And I think that's done a great job in terms of getting close and close to profitability. So one of the issues are, when you start increasing expenses to develop your R&D for drug trials, you will never achieve profitability. And it will be disappointing to the market and shareholders. So by separating the 2 entities, the goal is really for Ruthigen to take realistic cost out of Oculus. There'll be no longer have to burden on the shoulders and make them more profitable. For example, areas of R&D that applies to Ruthigen. They have a significantly developed quality team, that they do a lot of quality testing on routine batch-to-batch basis. Ruthigen can pay for the services. We shouldn't be paying other laboratories. That will be an added. So there will be actually a revenue stream coming back to Oculus for services that are being provided to Ruthigen, and we don't have to duplicate those. We have 30 [ph] consultants here. They do a lot of QA consulting -- RA consulting. So we're going to continue [indiscernible]. And in terms of manufacturing, we would like to initially utilize as much as we can of Oculus. But again, keep in mind, Oculus is a cGMP device organization. They are not drug certified. So at some point down in the future, not tomorrow, but then Ruthigen needs to before drug approval, establish its own facility to pass the FDA drug inspection. Jack Wallace - Sidoti & Company, LLC: Got you, that's very helpful. And maybe if there's any estimate as to the burn that will be taken out of the Oculus cost structure now, maybe pre- any M&A activity down the road, do you guys feel comfortable giving an either a number, a range of the operating expenses that might be taken out?

Right now, just on top of my head, I can add 2, 3 people that they're moving forward and a couple of expenses is about $500,000. But really, the more we go through it, there will be more solid number coming out. But whatever it is, I think it will accelerate the profitability for Oculus. So I appreciate your patience, and we're working, believe me, diligently to get through this process, as we are trying to call bankers for future funding for Ruthigen as well so...

And ladies and gentlemen, that does conclude our question-and-answer period. I'd like to turn the call back to Mr. Hoji Alimi for any closing remarks.

Well, again, I would like to thank everyone on the call. I am pleased everyone's really is -- there's been a Hercules kind of attempt to really create Ruthigen and have Oculus with all the support 24/7, helping us pull this business together, all in the hopes of giving value back to our shareholders. So we appreciate your patience through this process, but we're definitely looking forward to make very near-term exciting announcements in regards to both Ruthigen and Oculus. And we'll be on standby, if there are any further questions. Thank you, operator. And everyone, have a good afternoon.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program, and you may all disconnect. Have a great rest of the day.