Good afternoon, and welcome to the Oculus Fiscal Second Quarter 2017 Conference Call. My name is Andrea and I will be your coordinator for today's call. 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 company management. As a reminder, this conference call is being recorded for replay purposes. I will now turn the call over to Mr. Dan McFadden. Please proceed, sir.

Thank you, Andrea. And good afternoon and thank you to everybody for joining us today. With me on the call are our CEO, Jim Schutz; and our CFO and COO, Bob Miller. We will open the call with Jim's update on our business strategy moving forward followed by Bob's review of our financial results for the second quarter. This afternoon, Oculus issued a press release detailing fiscal second quarter 2017 financial results as well as recent corporate developments. A copy of the release can be downloaded from our website, which is oculusis.com, that's oculusis.com, or you can phone Investor Relations at 425-753-2105 and we will 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, as well the company's future capital needs and its ability to obtain additional funding and other risk detailed from time to time in the company's filings with the Securities and Exchange Commission including the quarter 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 with that, I will now turn the call over to Jim Schutz, our CEO.

Thank you, Dan. To provide portion of today's call, I'll cover just a few thoughts on our numbers for the quarter ending September 30, 2016. From the moment or two on transaction within Invekra announced last week and now this transaction fits in our overall corporate strategy. We'll share several thoughts on what's next in our corporate strategies and then Bob will cover the quarter numbers in detail. And then finally, we'll open the call for Q&A. So just - first a few comments on the quarter. U.S. product revenue was up 43% driven by growth in U.S. Dermatology. Total revenue was $4.11 million for the second quarter and product revenue was $3.8 million which is up 12% compared to the same period last year. Our cash position is the healthiest we've ever been. Cash and cash equivalents as of quarter end were $3.3 million. And of course we just received wires from the Vectra transaction late last week adding another $18 million in cash that covers. Bob, it's really cleaner. Our balance sheet with this infusion of cash and we have almost zero debt outstanding. Bob will dive into the numbers at much more detail shortly. Switching gears in just a few thoughts on our transaction with Vectra and out last week on how this transaction fits in our overall corporate strategy. Two years ago we adopted a turnaround strategy with a new board and a new management team to focus on growing revenue and are then brand new core U.S. dermatology market with our own direct salesforce. Our strategy further articulated that all of our non-core markets would generate cash to support the growth of the derm market. You may remember we defined our non-core markets as our hospital sales, animal health sale, contract laboratory sales and all…

Thank you, Jim. I will review the financial results of our derm strategy; secondly, our overall financial results for the quarter ended September 30, 2016 and finally talk about the financial impact on Oculus of the sale of Latin American assets to Invekra, our sales and marketing partner. Last week we held an update call to discuss the details of the sale of the Latin American Assets. If you would like more detail on this transaction you have access to the audio recording and the transcript of the business update call on our website. Would have been the financial results of our dermatology focus starting in October 2014 through the second quarter ending September 30, 2016 as a pre-piece to discussing these dermatology results starting from zero, direct sales revenue and late 2014, we have built a strong dermatology foundation over the past almost two years upon which to continue to grow in the future. There are several ways to measure our success in the derm market. One is through the sales of our products, to the wholesalers, the distributors which are recognized as revenue when shipped to them. This is a common way of recognizing revenue and is reflected in the following reported revenue. Our total US product revenue was $356,000 for the September quarter 2014, $1.2 million for the September quarter 2015 and $1.7 million September 2016 up 42% over the same quarter last year. This method of recognition tends to be driven by product load-ins to the wholesalers which can be lumpy. More specifically, our U.S. dermatology net product revenue was $1.1 million for the quarter ending September 30, 2016 compared to $636,000 in the same period last year, an increase of $423,000 or 67%. In the dermatology business, the gross revenue is calculated by multiplying the…

Thank you [Operator Instructions] Our first question comes from the line of Jason Kolbert with Maxim. Your line is open.

Hi guys, congratulations by the way on a great transaction, I really understand just how powerful it is then getting that kind of multiple both on the top line revenues and the bottom line EBITD pretty impressive. Can you walk me through your guidance again because I know you that kind of fast, you did $4.1 million in revenues in the current quarter that your forwarding, and I understand for next quarter I've got a back out kind of the Latin America sale, so I know it's kind of hard to predict these numbers. And I understand that there's going to be some interest income associated with the cash, they'll be the royalty stream associate with the cash, but how should we be thinking about the growth of the U.S Business. As you drive towards breakeven, so if you can give me a little bit more granularity on what the U.S sales numbers might look like and also, what the balance of the international sales might look like, that would be helpful in terms of our panel.

Okay, if you look at the - in fact if you look at our press release on Page 8. It shows the breakdown of our revenue by region. And you can see.

I haven't gotten that far yet.

Okay but I'll go through it, so our revenue for the Latin American component for the quarter ending September was about $1.2 million. And most of that will disappear once they take on the full manufacturing. And that will take place probably over six-month period.

Sure, that gives me the granularity on the international side. How about on the U.S side?

Okay, let me is also mention that the non-Mexico revenue is about $1 million little less than $1 million. And that will continue and that will probably grow in that's pretty lumpy growths but generally probably 10% to 15% growth for that component. And for the United States, we do break that down and give me sense - we tend to go off of sort of a demand growth if you look at our demand growth that we showed you. I went through the statics on that and were 60% quarter-over-quarter for the last four quarters. And the last quarter was 25%. And we would think that we would be able to maintain or at least over the next couple of quarters the 25% quarter-over-quarter for the demand dollar growth. And if you do the math 20% quarter-over-quarter for about a year is doubling. So that's what we would see in the dermatology area. And that is the major component, that probably represents about 70% of the United States revenue; 70% 80%.

Okay, great, thank you, that's really helpful. Now can you just talk - you did a great job talking about kind of the businesses that we're breaking even and kind of what it's going to take in getting those new sales hopped on board, so help me understand kind of the process of hiring them, and how impactful is one wrapped in it and how many reps you ultimately the sales force growing to.

Yes, we would probably say we're currently at 22 people. And that some of those are management people. About three or four of them are management people that don't have in the field in directly. But for the - we would probably be adding in terms of reps anywhere from the 25 to 30 Reps in the field. The hiring process is actually terrific, there some terrific experience of reps available - some of the big gorillas and they're excited about our stock options and where we are going as a company. We are finding really good experienced available reps with a book of business or with a customer list in hand and we're signed in institutionalize our training process, as we bring on more reps, which is going well so total immersion for a week or two, a hand full of ride along, especially given the experience nature of these reps, we're seeing pretty fast uptake. So I know you asked about the hiring process about the total number. But there was a third prong of the question.

Yes, the third prong was really understanding the profitability of the reps and kind of how long it takes for one rep to really impact and kind of grow their territorial region.

Sure, our quickest rep to breakeven is being about three months. But and probably the more normal is six to nine months to break even. And we would see that the reps would range would probably range on that's how long would take it to get a breakeven, it's really a pretty quick ramp compared to almost all the other businesses we've been in at this point.

Thanks for the rundown, really appreciate it guys, congratulation it looks like a great transaction.

Okay, thank you, Jason.

Thank you, Jason.

Thank you. [Operator Instructions] Our next question comes from the line of Laura Engel with Stonegate Capital, your line is open.

Good afternoon and congratulations on the great news and impressive quarter. Some of my questions have been asked, but I wondered if you could tell us a little bit about related to the sales reps are bringing on I guess those are to further the current products that are some of those for some of these that are in the pipeline and can you give us an update on those products and with several kind of target for 2017 what you see as far as which products may be coming down the pipe, to keep as approval looking forward.

So three questions; how we bring it on sales reps to sell more of current products and new products did we get the first part of that right.

Are they to support the growth of the current products that how do we see some of these others coming and how will that contribute to the workload of sales rep you are bringing on.

Okay, got it, and then second question apology, just so we answer your questions, was a pipeline and potential timing.

Yes, so just an update on the pipe there're a couple that we've been watching that have approval and then launches for the next - for the 2017 year, if you could give us an update on any specific on that, because you mentioned you still have the goal of one launch I guess per quarter moving forward.

So Bob, would you take the sales reps, the workload and I will take the final one.

Okay, yes that the sales reps. We would probably be starting to hire them in the January timeframe. And we would and it's a lot of it's it is the depends upon a key part of the analysis is what location we put them in. And so, then obviously hire them, so we're going to start doing that right away. And we think that we can as Jim mentioned, hire an additional five really quickly in the January timeframe. In terms of was there more specific question that related to that on the sales reps.

No, I think that's.

Then we mentioned, I went over a little bit on the…

I think it for a while you'd said at that to a total of 40 over the next two years.

We're currently at 22 people. We'll be adding five right away. Now about three of those people are not directly related to the field, they're managing the field. But they're not the never territory specific territory. So we would be adding an additional five that and then we probably would be a total field sales rep would be in the 25 to 30 range.

Okay. And as far as what you're going to be adding to their bags some of these in the pipeline that have the status of potential launch 2017. Any comments specific on that?

Yes, I will let Jim, handle the pipeline.

Yes, a good question due to that we've provided the color to before that. We can highlight here we're just launching a federal rag dermatitis product, very excited about that I had dinner with the position last night in the Los Angeles area who currently prescribes corticosteroids. For that indication and can't wait to try the new product with our chronicles the life, so very enthusiastically response. You may know it is dermatitis in the scalp growing chest hairy oily hairy areas of the body. Current products tend to be dominated by corticosteroids and then a lot of the OTC stuff. So enthusiasm about it as Bob, said the sales forces been trained, product been loaded in to all pharmacies throughout the country and it should be hitting the streets. Next product, that we're very much looking forward to, is a product we in license from a German pharma company. We're in the FDA queue for the first of what we see are two indications for the same active. The first indication, which we have disclosed is a Descale for Psoriasis like scaled - As you know is a big deal in that space. A good correspondence with the FDA they just came back with some questions so we think we're looking at spring an approval and launch for something that sells well in Germany that we in licensed our sales rep, you're excited about selling. A couple of other good products as you said we're trying to target one new product per quarter, we've not as a provided any color to, so bear with us and we'll give you an update later on those.

Okay, and then I guess last question it sounds like you all might have done some extra cash as far as talking about what will become of that going for as far as we can break even, and getting a little bit interest the additional mounted aren't necessary to reach that mark, are you looking at additional acquisitions as far as products, or are you going to use that for clinical development, are there any thoughts on that.

Yes, good question. The cash is rushing our pocket and are encouraging us to take a deep breath, I know everyone is focused on the recent election in the transition that's going on and the advice from a very good board and are very experienced was; take a moments just everybody has a big eyeballs and what we should do next, but we are studying those will circle back with the our shareholders when the time is right on what we plan to do with the cash. Most important from this cash in hand we get the step on the gas [ph] just a bit in hiring these sales people earlier and faster than we expected, and then all hands are focused on breaking even. So what we don't want to do is be left and thoughtful in our next steps here, so apologies for not answering your question with more clarity but we will share those details when we're ready.

No, that's fine, and everybody like cleaned out you just well, so congrats on that. Well, thanks for taking my questions I will hump back in the Que.

Thank you.

Thank you our next question comes from the line of Clark Laymen with Logo [ph]. Your line is open. [Operator Instructions] And I'm showing no further questions at this time I would now like to turn the call back over to Bob Miller for any closing comments.

Okay, thank you. First of all, thanks for joining the call and thanks for your continuing support. We feel the Oculus is in the best shape that we've ever been for two reasons. One, Oculus is effectively execute a turnaround strategy in a very attractive dermatology market. With a strong experience and effective sales team, a robust and unique product portfolio and product pipeline. As we mentioned our next step is driving a commercial breakeven, which should produce an improved stock price. Number two, I've just recently we received as we've mentioned $18 million, which enables us to step on the gas pedal and growing our dermatology business with no dilution to shareholders and with the use of only part of the proceeds. We look forward to sharing our progress as we build this company to becoming a pure play multi technology dermatology company and achieving our purpose of relentless passion for healing. And thanks, again.

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may all disconnect. Everyone have a great day.