Good morning, ladies and gentlemen, and welcome to The Female Health Company doing business as Veru Healthcare investors conference call. [Operator Instructions] Please note this event is being recorded. The statements made on this conference call are not historical in nature, are forward-looking statements. Such forward-looking statements reflect the company's current assessment of the risks and uncertainties related to our businesses. Our actual results and future developments could differ materially from the results or developments in such forward-looking statements. Factors that may cause actual results or developments to differ materially include such things as the risks related to the development of the company's product portfolio; risks related to the ability of the company to obtain sufficient financing on acceptable terms when needed to fund development and company operations; risks related to competition; government contracting risks; and other risks detailed in the company's press releases, shareholder communications and Security and Exchange Commission filings. For additional information regarding such risks, the company urges you to review its 10-Q and 10-K SEC filings. I would now like to turn the conference over to Dr. Mitchell Steiner, CEO and President. Please go ahead.

Thank you, operator, and good morning. This is Dr. Mitchell Steiner, the President and CEO of Veru. And joining me are Daniel Haines, CFO; and Kevin Gilbert, SVP, Corporate Development and Legal. Last week marked our sixth month of operations since the merger. I'm very proud of our team and our accomplishments to date. And I'm confident that we will continue to execute at this high level going forward. Today, we will update you on the progress we are making with commercialization of our products and clinical development of our drug pipeline as well as provide financial highlights for the second fiscal quarter. We continue to strengthen our leadership team with the addition of talented executives. We added relevant experience and expertise for the commercialization and development of our 505(b)(2) and traditional pharmaceutical drugs. With our key team and organizational structure now in place, we are better positioned to advance our deep pipeline of pharmaceuticals and to commercialize our products. Although the company was previously completely reliant on a single product in the global public health sector, we have in a short time solidly transformed the company into one that now has a diversified revenue stream with FC2 being sold both in the global public health sector and via prescription in the U.S. as well is moving Veru on its way to becoming a pharmaceutical company with the advancements in the clinical development of multiple 505(b)(2) products. And that will contribute to our revenue soon. As you can see from our financial results included in the press release, the public health sector FC2 business now had 4 straight quarters of lower-than-expected and declining sales. While we are disappointed with these results, we expect the global public health sector to strengthen in the second half of fiscal 2017. And we also…

Thank you, Dr. Steiner. As a reminder to some of the listeners who might not be familiar with the historical operations of The Female Health Company, in late 2014, the company was awarded a tender for Brazil, which resulted in orders of over 40 million units. Most of the revenue from this tender was recognized in fiscal 2015 and into fiscal Q2 of 2016 with no sales since 3/31/16 as Brazil continues to distribute their inventory on hand until their stock level support readying another tender. This as an example, albeit extreme, that illustrates the historical volatility of the FC2 public sector revenue as heavily dependent on the timing of tenders and orders from a few large customers, including Brazil, South Africa, UNFPA and USAID. A number of smaller customers do provide a baseline sales volume, but these few major customers account for considerable variability in our revenues. As Mitch indicated, we have seen a market decline in public sector revenue over the last several quarters. The recent decline is primarily due to timing as in the example I just mentioned with Brazil but also generally speaking of the U.S. political and geopolitical uncertainty that caused declines in our order frequency and an order size from some other customers, such as USAID and UNFPA, who are dependent on charitable donations or government aid, especially those dependent on funding coming directly from the U.S. via any source. That said, we are optimistic that we will see improving financial results in the second half of this fiscal year as political uncertainty continues to settle down. Speaking to our Q2 fiscal results. FC2 unit sales totaled 4.5 million, which is 50% lower than the 9.2 million from Q2 2016. Excluding Brazil sales from Q2 2016 of 2.4 million units, unit sales were down…

Thanks, Dan. The third near-term revenue opportunity I wanted to discuss is Tamsulosin DRS for BPH. This is our first 505(b)(2) drug product. But first, a general comment. As promised, we have reallocated financial unit resources to invest in our future as part of the diversification plan. The future growth of Veru will come from its deep pipeline of near- and long-term pharmaceutical products and product candidates. I'm happy to report that we're advancing on all fronts and our pharmaceutical products under development are all progressing well, which includes Tamsulosin DRS for BPH, MSS-722 for male infertility, APP-944 for hot flashes in men with advanced prostate cancer on hormone therapy and APP-111 for metastatic prostate, ovarian and breast cancers. Regarding Tamsulosin DRS, we have recently announced that we achieved successful Stage 1 of a bioequivalence BE clinical trial. Stage 1 was designed to select the optimal formulation of our proprietary Tamsulosin Delaying Release Sachet, DRS product. Tamsulosin DRS is a new, slow release oral powder formulation that addresses the large patient population of men with benign prostatic hyperplasia, who have difficulty swallowing tablets or capsules. With Stage 1 successfully completed on schedule, we will now advance the selected Tamsulosin DRS formulation into the second and final stage of the BE clinical trial. Our results from Stage 1 of the BE trial demonstrated Tamsulosin DRS may have benefits over FLOMAX. Unlike FLOMAX, Tamsulosin DRS is an extended release pattern that does not have to be administered after a meal and may be taken on an empty stomach. These benefits are especially important in the long-term care setting for men, who have difficulty swallowing capsules or tablets and could also improve patient compliance. We remain on track under the 505(b)(2) regulatory pathway. I want to pause here to make sure I'm adequately…

[Operator Instructions] Our first question comes from Jordan Kox with AECS [ph] Please go ahead.

Thank you. Good morning, Dr. Steiner and Daniel. How are you guys?

Doing great.

Good. Can you walk through a little bit about how this - the process of a woman walking into a clinic and needing an FC2 product and how it would get into her hands please?

Sure. So the idea here is take advantage of a call to action, which is the whole issue of an epidemic of sexually transmitted diseases. There's been a recent call by CDC as recent last week about the syphilis epidemic. And so the idea is a woman would come in -- and this is the approach that we're taking now, particularly for some of the clinics is she will come in with the concern that she has an STD. She will then undergo testing. If she has an STD, then what has happened in the past was she was just told, well, take some male condoms and go tell your partners that they have to use the male condom, which we know they don't use it. And so the way she empowers herself is to have a condom to give to males. And so that was typically done. The concept now is, if she comes in and she does have an STD, she'll get a prescription for an antibiotic, and while she gets that same prescription for an antibiotic, they would tag on that a prescription for FC2, a 12-unit pack. If the woman does not have an STD, then what typically is done is she is counselled because clearly she was worried and that's why she came in. And so when she's counselled, at that time, the idea of preventing an STD, particularly with something like the FC2, she would get a prescription at that point. And so if there's any interaction that the woman has with the physician around an STD, it would include an FC2. The other thing that's also happening, particularly with Planned Parenthood and those groups is that, in addition to offering oral contraception, which is also offered basically for free with no co-pay, they…

Is it going to be an inventory build in this quarter to get the product available? Or is it something that's just going to be a quick order flow?

It's actually both. And so there will be an inventory build in the sense that we have channels that need to be filled with our product, which is a good thing, so it's available. So that's part of it. But as you know, a lot of these national distributors are incredibly efficient. They will not stuff their channels. They will take just enough to keep things moving. And so we're going to be able to tell from the new orders and from the additional data how successful we are.

Okay, great. Thank you.

Thank you.

Our next question comes from John Casello, a Private Investor. Please go ahead.

Yes. I was just curious about the Tamsulosin Stage 2 trial and if in fact the trial is already happening or if you anticipate a start date on that.

Yes. So we're anticipating a start date soon on that. There are a couple things out of our control, for example, getting in the queue for the clinical site that actually runs the study, and they have to screen patients to get themselves a real clinical trial. So it does take a little time. And also once you pick your formulation, like we did in Stage 1, which we're a little bit surprised because we didn't really expect to see such a dramatic food requirement difference that gives us advantages. But put that aside, well, you have to scale it up so that you can now have enough drug released to put into the study. So some of that's going on right now. I think as you can imagine, John, I am pushing them as hard as I can because all we want to do is try to replicate what we saw in the Stage 1 and in more robust additional patients. So we know a lot more now than we did before and more confident now than we were before, although I was confident before but even more so now. So it's just -- it won't change our target because the target all along has been get this thing out so that we can launch it in 2018. So all that's still in place.

Okay. Thank you.

Thank you.

[Operator Instructions] The next question comes from Terry Frank with TF Trading and Company [ph] Please go ahead.

Good morning, Mitch. How are you?

Hey, Terry. How are you doing?

I am doing well. I was under the impression that the Brazilian reception of your visit down was that they've not only - because obviously the big orders we need to keep working on, continuing these big orders. And I was under the impression that Brazil was a pleasing response in terms of they were going to pay their past bills and that new orders will be coming and that South Africa was sort of the same response as Brazil. And then as you were sort of marching towards China through some, particularly going into Asia, Cambodia, et cetera. Could you just sort of...

Yes. I’d be happy to...

Sort of what's going on with the big orders, yes?

Yes. So one of our strategies, of course, is to figure out how to take advantage of the global public health market because that is the base by which we will be able to continue to develop our company towards a pharmaceutical company. So we are putting a lot of emphasis on doing a couple of interesting things. One thing we're doing is investing in business development outside the U.S. and so that we can get new orders. So what I can tell you is the following. One is yes, we have gotten new orders, a new order from an area that The Female Health Company has never gotten before, and that's now Asia. And so we're excited that now we have an opportunity to see new orders come from Asia. Second, yes, when we went to Brazil and I met with the British Minister of Health, along with Dan, we had a very good meeting. They're very enthusiastic. She, interestingly, has used FC1 and FC2 in her previous life when she was doing public health good in Brazil and particularly against STDs in the Amazon and that kind of stuff. So she did say to me that Brazil plans to be back in the game. And they plan to put in a 20 million unit order. The only difference now, Terry, is that whereas the FC2 and The Female Health Company were the only ones out there, with Cupid and some of these other ones, there is competition. But they are going to be looking at quality. So the comment I got from them is, yes, we are planning to order 20 million units this year and we plan -- and that would be a start because we believe that this is an important product that needs to be…

That’s good news. I appreciate it. Thank you.

Thank you.

Ladies and gentlemen, this concludes our question-and-answer session. I would like to turn the conference back over to Dr. Mitchell Steiner for any closing remarks.

Thank you, operator. I really would like to appreciate and thank everybody for joining us on today's call. I look forward to updating you on our progress at our next earnings call, which will be held in August. But we're very, very excited about our future and we appreciate your support. Thank you for being on our call.

The digital replay of the conference will be available beginning Tuesday, May 9 by dialling 1 (877) 344-7529 in the U.S. and 1 (412) 317-0088 internationally. You'll be prompted to enter the replay access code, which will be 10106205. Please record your name and company when joining. This conference has now concluded. Thank you for attending today's presentation.