Angeli Kolhatkar - SVP, Burns McClellan Rich Pascoe - CEO Steve Martin - CFO

Scott Henry - Roth Capital Partners Kaey Nakae - Ascendiant Capital Markets Irina Rivkind - Cantor Fitzgerald

Welcome to the Apricus Biosciences' Third Quarter 2014 Financial Results and Corporate Update Teleconference and Webcast. (Operator Instructions). It is now my pleasure to introduce your host, Angeli Kolhatkar. Please go ahead.

Good morning and thank you for joining us today. I'm Angeli Kolhatkar, Senior Vice President with Burns McClellan. With me today from Apricus is Chief Executive Officer, Rich Pascoe and Chief Financial Officer, Steve Martin. During today's call, Rich will review the company's progress in the third quarter including Apricus's recent announced in-licensing of Fispemifene for secondary hypogonadism from Forendo. And Steve will provide an overview of the financials. We will open the call for questions following our introductory remarks. I would like to remind everyone that certain of the information discussed on today's call is covered under the Safe Harbor provision of the Private Securities Litigation Reform Act, and that during today's conference call, management will be making certain forward-looking statements regarding future events or future financial performance of the company, including statements relating to expectations around the timing for commercial launch of products, business development plans and objectives such as out-licensing and acquiring products and product candidates, capital raising and the development of the company's product pipeline with second-generation products and other product candidates. Such statements are predictions based on current expectations and actual results could differ materially. Please refer to our most recent filings with the U.S. Securities and Exchange Commission, including our annual report on Form 10-K, and the quarterly report on Form 10-Q, which will be filed yesterday, for additional discussions regarding these and other risk factors that may affect our business. These documents can be found on the company's website at www.apricusbio.com. Apricus' earnings press release for the quarter ended September 30, 2014, crossed the wire earlier this morning and can also be accessed on the company's website. I will now turn the call over to Rich Pascoe. Rich?

Thank you, Angeli and good morning and thank you all for joining us on the call today. Since joining Apricus last year I had been dedicated to transforming and positioning the company for a long term and meaningful success. Over the past 18 months we have made significant strides towards that goal. As you’re aware when I came onboard we began to make a series of tough but necessary business choices including halting the development of Femprox given the challenging regulatory environment, divesting non-strategic assets and reducing corresponding full time equivalent as well as augmenting both our management team and Board to better meet the needs of our organization. In regard to our current business we’ve seen the successful approval and launch of our lead product Vitaros and our partners EU Territories. We have created significant additional strategic value in Apricus by building a portfolio of pipeline candidates with recent acquisitions of U.S. rights to fispemifene and the upcoming initiation of RayVa's clinical testing later this quarter. With our balanced portfolio of novel products both on the market -- in the market and in development we will drive both short and long term value through the continued execution of our operational and developmental plans. We’re proud of our accomplishments and believe that with a growing Vitaros's revenue stream combined with the opportunity to build sustainable value within our expanded pipeline of wholly-owned product candidates, Apricus is well positioned to achieve a strategic objective in 2015 and beyond. With this solid foundation in place our focus continues to be on execution and as such I would now like to provide you with an update on Apricus's key value drivers and activities. I will start with Vitaros, our marketed treatment for erectile dysfunction. Vitaros is approved in the major markets in Europe as well as Canada and has recently being launched in the United Kingdom, Sweden, Germany, and Belgium. We expect multiple additional launches to follow into 2015 and the remaining countries where the product is approved. Vitaros is partnered with leading companies such as Abbott, Takeda, Sandoz, Recordati and Majorelle and we’re pursuing additional partnerships in Latin America and Asia Pacific. While Vitaros is still early in the launch phase, the first launch was in June of this year, the initial sales figures are tracking well above our partner's forecast. Through September 30th of this year we shipped approximately 312,000 individual doses to our partners in Europe for commercial sale. Again all those are still early in the process we have seen a rapid uptake and the commercial acceptance with product reorders continuing to flow with high double digit month over month prescription growth trends and importantly confirmation of product refills which is a key early indication of patient satisfaction. On the manufacturing front we’re progressing towards bringing on a second source of supply for Vitaros and our contract manufacturer group, PARIMA located in Canada. We have successfully produced the initial validation batches at PARIMA all of which met the required release specifications for Europe, we expect to be producing commercial product at PARIMA beginning this quarter in support of additional plan launches by our partners. Turning to our next generation's Vitaros room temperature device development program. We had completed the development of the device and have started to manufacturing the devices needed to generate the required 12 month stability data to file for an approval. As such we reaffirm our previous target of an expected approval of our Vitaros room temperature device in Europe in 2016. Overall, we and our partners are thrilled with the ongoing advancement of Vitaros and we look forward to it's continued success in the coming years as a long term revenue generator for Apricus. Turning now to our product development pipeline, we are pleased to have had the opportunity to speak with many of you over the last few weeks about our transaction for U.S. rights for fispemifene, a novel term [ph] poised and our Phase 2b clinical trial for secondary hypogonadism or Low T. As we announced on October 20th of this year we in-licensed U.S. development and commercialization rights for this compound from Forendo Pharmaceuticals, a private drug discovery company based in Finland. At the same time we also announced that we close on a $10 million venture debt facility with Oxford Finance and Silicon Valley Bank to fund part of the initial acquisition cost in near term clinical development cost for fispemifene on a shareholder friendly terms. Steve will provide more details on this during the financial discussion of the call. This transaction has enabled us to strategically diversify our existing product portfolio with a complimentary program bringing on fispemifene significantly broaden our pipeline in a large and growing urological market. With the new clinical entity that has established clinical proof of concepts in secondary hypogonadism in two U.S. based clinical trials. In addition to encouraging data from these studies fispemifene has demonstrated a potential utility in treating symptoms associated with lower urinary tract symptoms, LUTS as well as chronic prostatitis. Given the scope of our range for Forendo we have the ability to pursue all indications is the U.S. But our primary focus will be on secondary hypogonadism. Moving forward with fispemifene in the near term we anticipate initiating a Phase 2b study in the first half of 2015 to confirm the optimal dose to treat men with secondary hypogonadism and provide proof of concept data to evaluate the effects on the LUTS and chronic prostatitis in aging men. Pending the results of this study and FDA feedback from an Phase 2b meeting, we’re targeting the initiation of our Phase 3 clinical program and secondary hypogonadism in the first half of 2016. Some of you may be aware that during the meeting held last week with the FDA by Repros, a company developing a competitive SERM for hypogonadism, the FDA confirmed a relatively smooth and well defined regulatory path for SERM as treatments for secondary hypogonadism. Encouragingly, there appears to be a growing realization that’s a normalization of endogenous testosterone levels while preserving fertility which is a SERM mechanism of action results in a safety profile and clinical benefit to the patients which testosterone replacement therapies lack by their very nature and by their very nature cannot deliver. The FDA's current acceptance of Repros' clinical package which was demonstrated by the FDA not requiring any additional efficacy or safety trials highlights the need for a new and more patient friendly alternative for secondary hypogonadism which represents a substantial enforcement of already existing multi-billion dollar testosterone replacement market. Repros's progress to-date and their near term plans to submit an NDA certainly makes for a convincing message for Apricus to pursue secondary hypogonadism with fispemifene. In fact we believe that fispemifene is unique and that it is the first SERM designed specifically for use in them. We will continue to watch and learn from this ongoing submission as well as confirm key regulatory guidance through our own interactions with the FDA and we will be certain to bring all relative learnings into our Phase 3 program to efficiently develop fispemifene as a potentially best in class second generation SERM with a highly differentiated profile. We also remain on track to bring our other pipeline product RayVa into the clinics by the end of this year. RayVa is the first in class treatment for the circulatory disorder Raynaud's phenomenon which we’re pursuing initially in patients with systemic sclerosis and underlying autoimmune disease. RayVa represents a promising therapy in a chronic disease with no U.S. approved treatments. So we anticipate a relatively clear and cost effective clinical and regulatory pathway as we advance this compound through development. RayVa leverages our permeation enhancer platform technology in combination with alprostadil, a vasodilator in a formulation that is topically applied to affected extremities particularly the hands and fingers. Our development timeline for RayVa remains on track and we expect to begin enrollment in the Phase 2a clinical trial by the end of this year. The trial be a randomized double blind placebo control trial and approximately 50 patients with Raynaud's phenomenon secondary to Scleroderma. Each patient will randomized to receive an application of placebo and one of three different doses of RayVa in a cross over design. This dose ranging study will evaluate blood flow and skin temperature changes at the side of application falling a standard co-challenge as measured by Laser Doppler and thermography. Other end points include safety and pharmacokinetic assessments. Enrollment for this Phase 2a trial is expected to take approximately 3 months and we have partnered with the Scleroderma Research Foundation and with the Raynaud's Patient Efficacy Leadership to educate patients on our program and to encourage their participation and support in the trial. Based upon results of the Phase 2a trial and regulatory guidance received from the FDA, the company will work towards moving RayVa into further clinical studies designed to evaluate the safety and efficacy of RayVa in patients suffering from secondary Raynaud's disease in 2015. The FDA has indicated that RayVa may qualify for priority review given the unmet medical need and lack of approved products in the U.S. to treat this condition. The FDA would determine if the RayVa new drug application qualifies for product review following it's submission which could occur as early 2017. Strategically RayVa not only allows us to further leverage our internal technology but provide Apricus' with a potential path to commercialization in the United States with a wholly owned first in class product with potential annual sales revenue as a 100s of millions of dollars. Moreover with clinical success in 2015 our goal is to license RayVa outside of United States to help fund it's development and future commercial activities. Additionally, we will also continue to pursue partnering activities for Femprox, our drug candidate for female sexual interest and arousal disorder. Our goal as disclosed previously is to out-license the development and commercialization rights for Femprox outside of United States while seeking to retain the U.S. rights to maintain long term asset value. Pursuing ex-U.S. partnerships can bring a non-dilutive capital while generating additional clinical data that may be useful as the United States regulatory landscape evolves. We continue to believe that this is a prudent strategy for Femprox particularly giving statements by the FDA at a public hearing held last month on female sexual dysfunction treatments which seems to contradict previous guidance Apricus received on the suitability of certain clinical trial endpoints to evaluate arousal. We will continue to see clarity on these issues as we move forward. Before I turn this discuss over to Steve, I want to reiterate my belief that with the expansion of our clinical development pipeline which now includes fispemifene and RayVa coupled with a growing Vitaros revenue stream, Apricus Biosciences is well positioned to create long term value for the benefits of patients, care givers and our shareholders. Apricus has had an exciting year on a number of fronts including the in-licensing of U.S. rights for fispemifene, the ongoing launches of Vitaros in Europe, by our commercial partners and the initiation of RayVa Phase 2a clinical trial program. We have also strengthened our financial positions through a $20 million committed equity financing with Aspire Capital and the recent $10 million venture debt transaction with Oxford Financial and Silicon Valley Bank. Finally as we discussed last quarter throughout the year we have added depth and breadth to our Board of Directors and management team with the additions of Dr. Wendell Wierenga and Mr. Sandy Smith to our Board and Mr. Neil Morton as our Vice President of Business Development who was key in bringing fispemifene into the company and managing this transformational event for the company. With that I will turn the call over to Steve to discuss our third quarter financials. Steve?

Thank you Rich. We released our financial results for the third quarter of 2014 with a press release this morning and we intend to file our quarterly report on Form 10-Q with the U.S. SEC later today. Total revenues for the third quarter ended September 30, 2014 were $5.9 million compared with $28,000 in the same period in 2013. The increase in revenues in 2014 was mainly attributable to the recognition of 1.5 million in license fee revenue of which 1 million is associated with the out-license of Vitaros in France, Monaco and Africa with Laboratories Majorelle, and 500,000 is associated with Sandoz license agreement which was newly invoiced with the launch of Vitaros by Sandoz in Sweden. In addition we recognized revenue of $398,000 from approximately 179,000 units of Vitaros' product shipments to our commercial partners in the third quarter. As Rich mentioned, we have shipped over 312,000 units of Vitaros to our partners through September 30, 2014. For certain units we have invoiced and collected cash for the product shipment value, however, revenue remains deferred until all revenue recognition criteria are achieved. We expect revenues generated during the fourth quarter 2013 will be from licensing, milestone and royalty revenues received from commercial partners for Vitaros and from shipments of Vitaros to licensee partners. The timing of these revenues is uncertain and as such our revenue can vary significantly between quarters. As a reminder royalties of Vitaros product sales are reported and paid on a one quarter lag from the time of sales are made by our licensee partners. Product sales by our partners were initiated in June of 2014 and therefore the amount reported is nominal to-date. We expect Vitaros' royalties to be more meaningful in 2015 as sales expand in territories where the product has been launched and as additional territories begin to market Vitaros. The net loss for the third quarter was $3.1 million or $0.08 per share compared to a net loss of $3 million or $0.08 per share in the three month period ended September 30, 2013. We ended the third quarter with 16.1 million in cash and cash equivalents compared with $21.4 million as of December 31, 2013. With our existing cash on hand plus the new $10 million loan facility, coupled with the in-place committed equity financing facility we believe that we have an appropriately level of cash and access to additional capital to support the current operating plans through 2015. We expect to have net cash outflows from operations during the remainder of 2014 and during 2015 as we further develop our Vitaros room temperature device, continued the Phase 2a development program for RayVa, initiate a Phase 2b development program for fispemifene and meet other operating expenses. I also want to review the financial terms of the in-licensing agreement we made with Forendo Pharma announced last month. The in-licensing agreement for fispemifene includes upfront value delivered to Forendo of $12.5 million of which 5 million was paid in cash and 7.5 million was delivered in Apricus stock. The Apricus shares were priced based on the 360 day average trading price of our stock which was $2.08 per share, a significant premium to the current stock price, based on that pricing 3.6 million shares were provided to Forendo as part of the licensing fee. The agreement also includes future potential milestone payments to Forendo based upon on the achievement of key clinical and regulatory milestones including FDA approval. In addition we have agreed upon commercial milestone payments based upon the future achievement of specified annual net sales level upto $1 billion in the United States. Based upon our clinical development plans we expect to make a single milestone payments to Forendo of $2.5 million in cash in 2015. Apricus will also pay tiered low double digit royalties based upon the future net sales to be achieved by Apricus. Apricus will be responsible for and assume all cost related to the development of fispemifene as well as all future commercialization efforts in the U.S. and it's territories. As Rich noted, we also entered into a $10 million venture debt financing facility with Oxford Finance and Silicon Valley bank. This debt facility was consummated coincident with the closing of the fispemifene in-license transaction. This debt facility has provided us with non-dilutive capital to develop fispemifene through Phase 2b clinical trials. The first 5 million in debt financing was provided on the date we closed the transaction and will be used to pay the $5 million cash portion of the upfront value delivered to Forendo. A second $5 million loan drawn [ph] specifically earmarked to fund fispemifene Phase 2b clinical development program and is expected to be available to support the start of that clinical trial effort during the first half of 2015. We view this as a shareholder friendly solution using non-dilutive capital to fund this potentially transformative addition to our pipeline. I will now turn the call back over to Rich.

Thank you, Steve. In closing, I firmly believe that Apricus is on an exciting path. We will continue to execute on our strategies to build value for our shareholders. Following our recent in-licensing of fispemifene we anticipate several other value creating milestones in 2014 and into 2015 including additional Vitaros European launches, the steady ramping of Vitaros royalty and milestone revenues, enrollment of patients in and the completion of the RayVa Phase 2a clinical trial. Compiling the required stability data for our Vitaros room temperature device and the initiation of a Phase 2b clinical trial for fispemifene in the first half of 2015 which we expect will be completed in the fourth quarter of next year. With the achievement of each of these milestones, our goal is to further strengthen our long term strategic value for the benefit of our shareholders, with multiple assets that address significant unmet needs and large and growing markets. Moreover as we have built a stronger and more investment worthy company we will continue to operate Apricus with the same level of discipline, creativity and strategic decision making that has allowed us to truly transform Apricus over these past 18 months. And as always we appreciate the support and feedback we receive from our shareholders and with that we will now open the call up for questions. Operator?

(Operator Instructions). Our first question comes from the line of Scott Henry with Roth Capital. Please proceed with your question. Scott Henry - Roth Capital Partners: I’ve got a bunch of small questions, so I guess I will just get started. First, Vitaros, any update on when we can see the Canadian launch?

As you know Abbott continues to work with Health Canada to extend the shelf life required for commercial launch in their view. They then know further developments on that front to report as we have indicated before; our strong belief is that the product is an approved product in Canada. It does have a shorter shelf life than they would like but we see it as commercially viable and we continue to push forward on that theme. Having said that given their interest in extending the shelf life and probably more complicated by that is the potential acquisition of that unit of Abbott by Mylan Laboratories, don’t expect to see a whole lot of movement on that front in the near term. Scott Henry - Roth Capital Partners: And you mentioned the 2016 launch of the room temperature version; do you expect to file that in 2015 in the EU?

Yes so we will have to file a variation, the type 2 variation in the EU to gain approval. So it's essentially is dependent upon the generation of the 12 month stability data. So I’ve noted in my remarks we’re manufacturing the devices so there is several components to come together, the product itself, the Vitaros which is separated into different compartments is then inserted. Those devices being manufactured here as we speak will go up on stability and then we will be able to generate the required 12 months of data. Once we have that in hand fourth quarter next year we will have to package that up in a format that’s acceptable to the agency and then file that for an approval, that’s typically a six month process, the approval process and so assuming we file that say, late next year into early '16 depending upon the preparation time you would expect to see the room temperature device approved in 2016. Scott Henry - Roth Capital Partners: And then obviously you were modeling these royalties, 400,000 in third quarter, should we think about that as stocking or are we -- it would seem little early to expect sequential gains in fourth quarter but it's sort of I'm just wondering how should we start thinking about that trend?

And there are a couple of different components here, clearly we manufacture product through our contract manufacturer in Canada and we sell that product through to our partners and the revenue that was reported roughly 400,000 by Steve is really that particular component. The royalty revenue that we receive on Vitaros sales as I think we have talked about in the past is on a quarter lag because it's based upon net sales not ex-factory sales from us to them. And so we will begin to have more clarity on the royalty component of that here at year-end and the quarter that we’re in today. So I wouldn’t take too much away from the-- Scott Henry - Roth Capital Partners: So that’s manufacturing revenue? That 400,000?

Correct. We only had two weeks of product sales in the UK only in the third quarter because they launched in mid-June of this year. So, what I think is more relevant as we look at the demand side of the equation both from what's building into the wholesale and retail channels which has been about expectations, reorders coming from our partners for more product to replenish those supplies and as we noted in our remarks even though it's early, it's only three months into the launch, we are seeing a very double digit growth rate month over month that persist with the evidence of resales occurring as well. So we know it's early, we acknowledge it's early but those signs all are quite positive based on our expectations and in our partners expectations but clearly as we report out results here for the fourth quarter and beyond I think they will begin to see the royalty component come into focus. Scott Henry - Roth Capital Partners: And then a couple pipeline questions, I guess RayVa, should we see that data in the second quarter of 2015 would that be the expectation?

So the patient enrollment will begin in this quarter about a three month enrollment period, top line results shortly thereafter. So we’re targeting the first half of next year, second quarter is likely objective so I think that’s a good target for you. Scott Henry - Roth Capital Partners: And then fispemifene, do you think we will see data by the end of 2015 there? The 2b data?

Assuming we commence the trial as planned in the first half of next year, yes, we would expect to have data by year-end and of course part of our strategy with both RayVa and fispemifene is to generate data for both products next year in the Phase 2 setting and then obviously evaluate moving forward into pivotal trials for one or both. Scott Henry - Roth Capital Partners: And then I guess the final question is just relating to should I expect any license milestone, anything you would want to get the guidance on any money coming in?

Well for Q4 because of the timing we will be looking the $0.5 million Belgium launch by Sandoz, there was a $0.5 million commercialization milestone that we will record. There are other milestones related to the introduction of the product and other regulatory milestones for countries that over the product is not approved under the existing decentralized procedure but we’re not giving any firm guidance on the timing or amounts in the next year. I think I will just say that there is still money on the table that we would expect to collect. Scott Henry - Roth Capital Partners: And then Steve, with regard to fispemifene, how are we going to book some of those? I mean are those milestones that you pay or those going to show up in the R&D line? How should we think about those in the model?

What you should expect is that we acquired an asset in effect we gave up value in shares and we also gave $5 million of cash and so we’re going to reflect an R&D charge in the quarter we made the acquisition which is October and then as we spend R&D dollars for the program, those will be additional R&D spend in 2015 primarily, 2015. So is that what you wanted to get to? Scott Henry - Roth Capital Partners: Okay. So will there be a $5 million balance in R&D in Q4?

There will be a $5 million in cash plus the value of shares we delivered also; we delivered 3.6 million shares at the market price on the day that we gave up those shares. So we’re little bit in excess of $10 million.

Thank you. Our next question is from the line of Kaey Nakae with Ascendiant. Please proceed with your question. Kaey Nakae - Ascendiant Capital Markets: Steve with respect to the transfer price revenue that you’re recognizing, could you clarify, you gave us some unit numbers that you shipped in Q3 and is all the transfer price revenue recognized at the time you ship or is there some other lags with respect to that as well?

So we utilize a contract manufacturer (indiscernible) in Montreal, Canada, so the orders come in from the licensee partners, the orders go to the manufacturer. Apricus takes title then delivers those Vitaros units to the licensee partner. So as I indicated we had 400,000 of product sales in the quarter and that reflects most of what we shipped so licensee partner is being recognized because of revenue recognition criteria, certain of the units that were shipped and invoiced were not yet recognized because there are some post shipment analysis that goes on with those licensee partner. So in effect we ship 312,000 units, 179,000 of those were recognized in revenue but what you can anticipate from a cash side is when we ship the product it is accepted by the customer, or did they pay us cash or the units and as you know of course then we pay to the manufacturer. So there is not a lot of margin for us along the way, really it's more of an in and out transaction. Then when they sell it to the third party in the marketplace, they send us a double digit royalty overtime, so that is free cash flow in the future. Kaey Nakae - Ascendiant Capital Markets: Okay, so overtime this -- any lag in the transfer price should be fairly minimal?

That’s right. Kaey Nakae - Ascendiant Capital Markets: And then just a second question, you’re talking about a number of clinical initiatives in 2015. I'm just wondering if you can give some sense at this point what we should be expecting in terms of the cost for these at least two clinical initiatives in 2015?

As we have noted previously we expect that the Phase 2b clinical trial for fispemifene will cost approximately $5 million which we have allotted for and -- ventured that facility with Oxford Financing and Silicon Valley Bank. We’ve also shared that the RayVa Phase 2a trial will cost approximately $1.5 million which we have baked into our operating plans. We have not given guidance on the Phase 2b for RayVa but it will be in the low single digits given our current thoughts on how that 2b program will be run. Clearly we will learn more from the Phase 2a and we will have to update that when we actually launch it, that Phase 2b study but I think all end we’re looking at two fairly modestly priced Phase 2 programs for both fispemifene and RayVa next year.

I think that’s right, so a little bit of an increase in R&D expense in 2015 but it also means we have a little bit of a decline in spending in '14 where we had some additional cost related room temperature device which is nearing the end. So there is a little bit of an offset there. Kaey Nakae - Ascendiant Capital Markets: And then just for the RayVa 2b, do you’ve a sense for what the number of patients at this time you would be looking to evaluate?

It's not significantly more than what we envision for Phase 2a, it's about 60 to 80 right now. As you know in the 2a, we’re going to nail down the dose and then we will move patients into the 2b study and with a single dose versus placebo and cross over design because, there is less technical issues associated with the 2b, it will be a take home study as opposed to in-clinic study like the 2a where we’re actually measuring results with Laser Doppler and thermography. In the 2b these patients will be enrolled after they are properly evaluated, they will take product home and they will use product as these effects occur. So some of the cost associated with the conduct of the trial will be less of an issue, so as we see it now 60 is probably the low water mark, no more than 84 this Phase 2b study. So again, fairly low patient numbers, fairly manageable from a site perspective. We’re only running four sites for the 2a and so I think we will be able to very capital efficient with RayVa as we move forward.

(Operator Instructions). Our next question is coming from the line of Irina Rivkind with Cantor Fitzgerald. Please proceed with your question. Irina Rivkind - Cantor Fitzgerald: I just wanted to dwell a little more into this revenue recognition issue as well. So it looks like the remainder of this 312,000 units in product sales you should be able to take it next quarter hopefully right? Plus anything else that you shift next quarter and then we should also see royalty revenue associated with two weeks of sales in the third quarter is that the right way to think about it?

Here is what I would expect and that is the revenue recognition criteria is a little bit complicated in that, there is some initial shipment that have a little bit of extended evaluation period for our third party customer. So it will depend on the pace at which product sales move through the channel on some of our units. So again we have recognition of 179,000 units, 133,000 units are deferred. We haven't given guidance yet whether that would be a fourth quarter recognition or maybe a little bit into 2015 but as I said before there has not been an issue with the cash, it's all been connected into smooth safe way to channel [ph], it just has to do with contractual arrangements we made to give them a little bit of an analysis. On the rev recognition for royalties, the reports related to the period end of June, we have in the third quarter and they are relatively nominal as I said and then for the period in the September 30 we will get those reports in the fourth quarter and therefore a recognized revenue for royalties in the fourth quarter therefore on a one quarter lag. Irina Rivkind - Cantor Fitzgerald: And then going forward you’re going to sort of be very clean and transparent in how you report the different buckets of revenue just so we can back into everything?

Sure. The royalty was nominal for the period so it doesn’t have a separate recording line but there will be of course license category, there will be a product sales category and a royalty category. Irina Rivkind - Cantor Fitzgerald: And then on the R&D book this quarter, can you just kind of broadly give us some buckets of what was included in that spend and is the run-rate expected to go up significantly going forward?

Yes, we had R&D cost in the quarter at roughly $1.9 million. I would say -- this could be broken into few different pieces, of course we have the folks that are managing the operation but generally if you go to third party spend we have small part relates to the RayVa Phase 2b program, we have some continuing activities related to the Vitaros room temperature program, probably not appropriately to break it down by the categories but you would expect increases in the fourth quarter and into '15 for the RayVa Phase 2a as well as fispemifene 2b and it should see a bit of drop off related to Vitaros that is now more normalized and we’re pretty far along the room temperature.

Thank you. We have reached the end of our question and answer session. I would now like to turn the floor back over to Mr. Pascoe for any additional concluding comments.

Thank you operator and thank you all for joining us today on the call. We hope to see many of you in a couple of weeks and in the coming months at various investor conferences including the SeeThruEquity Microcap Investor Conference and the Stifel Healthcare Conference in November in New York City as well as the LDE Micro Conference in Los Angeles in December and the Biotech Showcase Conference in January which will be held in San Francisco. Operator, you may now disconnect.

Thank you. Ladies and gentlemen, this does conclude today's teleconference. We thank you for your participation and you may disconnect your lines at this time.