Joseph V. Gulfo - Chairman, Chief Executive Officer and President Richard I. Steinhart - Chief Financial Officer, Principal Accounting Officer, Senior Vice President of Finance, Treasurer and Secretary Jeffrey Lang - Chief Executive Officer, President and Director

Dalton L. Chandler - Needham & Company, LLC, Research Division Trey Cobb - Stephens Inc., Research Division Joshua T. Jennings - Cowen and Company, LLC, Research Division Greg Chodaczek - First Analysis Securities Corporation, Research Division John L. Sullivan - Leerink Swann LLC, Research Division Stephen G. Brozak - WBB Securities, LLC, Research Division

Good day, ladies and gentlemen, and welcome to the MELA Sciences' Third Quarter Earnings Call. [Operator Instructions] This presentation includes forward-looking statements within the meaning of the Securities Litigation Reform Act of 1995. These statements include, but are not limited to, our plans, objectives, expectations, and intentions and other statements that contain words such as expects, contemplates, anticipates, plans, intends, believes, assumes, predicts, and variations of such words or similar expressions that predict or indicate future events or trends, or that do not relate to historical matters. These statements are based on our current beliefs or expectations, and are inherently subject to significant known and unknown uncertainties and changes in circumstances, many of which are beyond our control. There can be no assurance that our beliefs or expectations will be achieved. Actual results may differ materially from our beliefs or expectations due to financial, economic, business, competitive market, regulatory, and political factors or conditions affecting the company and the medical device industry, in general, as well as more specific risks and uncertainties facing the company, such as those set forth in its reports on Forms 10-Q and 10-K filed with the U.S. Securities and Exchange Commission. Factors that may cause such a difference include whether MelaFind achieves market acceptance or becomes commercially viable. Given the uncertainties affecting companies in the medical device industry such as the company, any or all of these forward-looking statements may be proved to be incorrect. Therefore, you should not rely on any such forward-looking statements. The company urges you to carefully review and consider the disclosures found in its filing with the SEC, which are available at www.sec.gov and www.melasciences.com. I will now turn the call over to your host, Joseph Gulfo. Please go ahead. Joseph V. Gulfo: Good afternoon, and thank you for joining us for MELA Sciences' Third Quarter 2012 Conference Call. We have now completed our initial 6 months on the market, and I'm pleased to report that we've escalated the pace of our commercial activities, consistent with our planned, controlled, deliberate and staged rolled out in U.S. and Germany. We are gratified to hear about the positive clinical experiences and benefits of using MelaFind. As many of you know, MelaFind is our breakthrough, noninvasive and objective automated point-of-care system for use when a dermatologist chooses to obtain additional information for a decision to biopsy clinically atypical pigmented skin lesions with one or more clinical or historical characteristics of melanoma. On today's call, I'm going to give a brief overview of our third quarter accomplishments, then turn the call over to Richard Steinhart, our Chief Financial Officer, for a review of the financials. And then open up the call for questions. Cutting to the chase, I'm thrilled to report that as of today, we have 99 systems for which we have signed user agreements in hand. 76 of which have been installed with associated revenues booked. We are proceeding according to plan. Before we begin, I would like to take a minute to define some terms. There are 3 stages of customer interaction to which we refer with different meanings. Number one, in discussions. This means that we have met with a dermatologist and have initiated the sales process and provided materials. At the end of the discussion period, assuming significant interest, we will send him or her a user agreement, at which point we say that a user agreement is out. Number two, signed user agreement. This, as expected, means we have received the signed user agreement back from the clinician. At this point, we are in various stages of orchestrating installation and training. We consider this a placement, that is, we have a known address to where the system is going. Number three, installation complete. This means we have installed the system and the dermatologist has passed the FDA-mandated training. It is, at this point, that we booked revenue. And revenue recognition. As we've explained previously, we receive an upfront payment of now $10,000, note the increase that we took at the end of the quarter. However, all of the upfront system revenue is not recognized immediately, rather roughly 75% to 80% is recognized over the ensuing 24 months. Separately, we provide a box of 25 cards of product installation. We sell boxes of 50 cards, 1 card per patient exam, for $2,500 to our dermatology customers. To date, we have a 100% conversion rate from sending out a user agreement to a system installation. Moving onto our results, we are pleased to report the significant achievements we have reached in the third quarter. Most importantly, we escalated the pace at which we obtained signed user agreements, installed systems and trained new customers in our controlled and deliberate launch of MelaFind in the U.S. and several key cities throughout Germany. In the quarter, we installed and booked revenue for 15 systems in the U.S. and 5 systems in Germany for a total of 20. We also obtained signed user agreements for 14 additional customers in the U.S. during the quarter. All 14 of those systems have been installed with associated revenues booked in October. The only thing that marred an otherwise excellent quarter, which proceeded to overall plan, was not being able to book the revenue for the 14 systems. This resulted in revenues that were slightly below second quarter results and did not reflect the increased level of business activity that we saw in the third quarter. We are pleased to report that as of today, there are 76 MelaFind systems installed in the U.S. and Germany for which we have booked revenue, and we have an additional 23 systems for which we have signed user agreements in hand and are in various stages of installation and training. We expect to book revenues from these 23 systems this quarter. Further, there are 41 user agreements currently under review by potential customers who have expressed significant interest. The period from obtaining a signed user agreement to booked revenue can take as little as 2 weeks for a small private practice and longer in a large academic center. We are pleased to report that we are building out our sales and marketing infrastructure in both Germany and the U.S. In Germany, we have established an office in Munich, hired a strong commercial leader with extensive medical device experience, and we are in the process of adding 2 additional sales people, as well as sales and technical support logistical personnel. Late in the third quarter, we also added 3 new sales representatives in the U.S. with very strong background in dermatology for the New York, Texas and California markets. These 3 new territory managers underwent sales training in late September and have already started to contribute to our growth. We experienced several vital key learnings in the third quarter worth discussing. We established a team of installers and trainers so that our sales professionals can focus on signing new customers and helping them integrate MelaFind into their practices. The need for this is acutely appreciated when we observed that one of our most prolific sales people had obtained many contracts in June then saw a sharp decline, as in none, in July because he was busy with installations and training the customers who signed user agreements in June. Therefore, in August, we established a dedicated team of system operations specialists to perform the training of new and existing customers, so that our sales people can do what they do best, sell. Our sales reps are acutely focused on signing user agreements with new customers and working with existing customers to promote the incorporation of MelaFind into the practice. We have observed a significant increase in sales activity since implementing this. With these changes in place, our sales people can be far more efficient. For example, one of our sales representatives in the U.S., who was hired in July and started in the field in August, obtained 13 signed contracts in her first 10-week period and continues to show strong momentum. Another rep, who started at the same time, was responsible for 9 signed contracts over his first 10-week period and also shows continued momentum. We now have 7 sales representatives in the U.S., including the 3 additional hires, trained in late September. We have identified 5 steps along the trajectory toward increased usage within a practice. Number one, training the practice champion, the dermatologist in the practice who is responsible for bringing MelaFind in; two, experimentation and testing by the practice champion toward achieving his or her "medical conversion," which is the eureka moment that a dermatologist has when he or she realizes how best to use MelaFind and to appreciate its clinical utility; third, increased usage by the practice champion and an invitation from him or her to train additional staff and other dermatologists at the practice; four, direct-to-patient outreach by the practice to augment usage; and five, local advertising and other patient mobilization efforts in an area. To date, we have focused primarily on steps 1 to 3, and as expected, usage has been quite modest. In the current quarter, we have begun to provide tools and techniques to the customers to help them with step 4, direct-to-patient outreach; and step 5, local advertising and outreach for enhanced patient mobilization. We anticipate usage to increase as we roll out these tools and techniques and as more and more dermatologists achieve their medical conversions. We observed that the 25 cards included in the installation package will last about a month, typically, as they experiment with the system en route to their medical conversion. In July and August, the cards lasted longer. Timing of the medical conversion can be quite variable, as quickly as 1 week to as long as 4.5 months so far. We worked with customers to help them arrive at this point as soon as possible, and we have appreciated the need to develop additional tools to help in this process. We are in the final stages of developing several videos based on interviews with over 10 practicing dermatologist customers who have had excellent experiences with MelaFind. We filmed these at the American Society of Dermatologic Surgery meeting in October, and we will roll out the videos after Thanksgiving. We believe that not only will these peer-to-peer videos expedite the time to medical conversion, but also increase usage. We are also working on a perils and pitfalls paper with several customers to share best practices for optimum medical experiences. We are confident that additional papers and discussion of MelaFind at medical meetings and in the literature will also lead to increased usage, but given timing considerations, we do not expect to see the impact of that until 2013. As of the third quarter, usage has averaged approximately once per day across all customers for the days that dermatologists are in the office. Over the summer months, as expected, there were fewer days in office and a commensurate less usage. Not surprisingly, our most prolific usage tends to be with customers who had systems placed and were trained in March and April. One of these customers has used MelaFind on over 350 patients. This customer also ran his own local advertising. Several customers, whose systems were placed in June, used MelaFind multiple times per day in the third quarter. We expect much greater usage as we roll out 2 other techniques designed to enhance usage once the medical conversions have taken place. Also of note, we are pleased to see that some customers ordered a second or a third system for an additional office location within their practice. One customer ordered 2 additional MelaFind systems after having their first for 2 weeks. Several weeks after that, this very large practice ordered 10 more for a total of 13 MelaFind systems for multiple locations. We have also initiated discussions with several large regional health systems who expressed interest in placing MelaFind in many or most of their network locations. We are actively pursuing discussions with these groups and planning pilots with the goal of full penetration within one or more of these networks. We are pleased that the networks mirror our national rollout, that is they reside in states that we have already began to penetrate. On October 23, one of our newest customers, Dr. Glynis Ablon of Manhattan Beach, California, appeared on the TV show, The Doctors. This is the third major national TV program, including The View and Good Morning America, that has featured MelaFind since launched. On October 30, the Cleveland Clinic published its list of Top 10 Medical Innovations for 2013. The candidate technologies were identified by Cleveland Clinic staff from every major field in response to the question, what innovations or game changes in your field and will have the biggest impact on health care? Products and technologies on the list are considered by the judges to have significant clinical impact, high probability of commercial success and significant human interest. Based on continued high levels of interest and demand, recognition that MelaFind is a breakthrough product and the accelerating cadence at which we have been signing user agreements and installing systems in the field, we believe we remain on track to achieve our stated goals in the U.S. and Germany for the first 12 months of commercialization. That is by March 31, 2013, having signed user agreements in place for 200 systems in the U.S. and 75 in Germany. Based on experience in the third quarter, we expect that over 90% of the systems will be installed and revenue recognized by March 31, 2013. As we look to 2013, we expect to continue our trajectory of MelaFind placements and expect to place 50% more systems in 2013 versus what we placed in 2012. We will continue to optimize our sales, installation and training model and look to leverage our experience, future learnings and customer momentum in 2013. We are now beginning to focus on practice-based patient outreach and regional and national patient mobilization awareness efforts, which we are confident will increase awareness, demand and usage for the remainder of the first year of commercialization and beyond. A number of other important activities occurred in the third quarter. For instance, the creation of a series of videos that explain the origins of MelaFind, the precision manufacturing of MelaFind, dermatologist's validation of MelaFind and the impact of melanoma on patients. Several additional videos are in production, including the ease of use of MelaFind and the peer-to-peer medical utility videos that I discussed earlier. All videos will be distributed in the fourth quarter. These are designed to be viewed by dermatologists and patients and most are suitable for dermatologists' websites and to use in their waiting rooms. We are now working on these in conjunction with Practical Dermatology, a dermatology journal that is distributing the videos to dermatologists through the Internet and hosting them on their websites. We will also make the videos available on our website. We continue to generate new data that are shown as posters at medical meetings and subsequently published as papers. We look forward to the submission and publication of those -- of these over the next year. In the third quarter, we received final approval from FDA for the post-approval study, which was initiated at one clinical site this morning. The study has been posted on ClinicalTrials.gov if you are interested in more details. I will now turn the call over to Richard Steinhart, our Chief Financial Officer. Richard I. Steinhart: Good afternoon, and thank you, Joseph. Total invoicing to our customers in the 3 months ended September 30, 2012, was approximately $132,000. Of which $69,127 was recognized and $62,902 was deferred, bringing deferred revenue reported as of September 30 to $150,876. This is compared to no revenue for the same period in 2011. Revenue associated with the 14 user agreements signed but not installed in the quarter will be reported in the fourth quarter since we do not book revenue until the system is actually placed in a customer's office and the doctor is trained. Now if we did book a sale upon signing as opposed to installation, recognized revenue for the third quarter would have been roughly $87,000 and deferred revenue as of September 30 would have been approximately $200,000, which would have been higher than the second quarter. Recall that in the second quarter, recognized revenues were $75,757 and as of June 30, deferred revenue was $87,974. Just as a reminder about recognized and deferred revenue. We have what the accountants call a contract with multiple elements of delivery and must defer a significant portion of our placement fee, despite the fact that we generally do receive the entire cash payment on installation. As a result, deferred revenue reflects the timed recognition of the installation fee revenue over the term of the user agreement, which is usually 2 years. Gross profit for the third quarter 2012 was a loss of $500,000. Research and development expenses for the third quarter were $1.4 million versus $2.4 million reported in the same period last year. The decrease in research and development expenses is primarily attributable to the reallocation of certain expenses to properly reflect commercial operations and reduced research and development expenses at our contract manufacturer, Askion, in Germany. As we announced in October, we placed a multi-million dollar order from MelaFind systems that will ensure supply through the first quarter of next year. General and administrative expenses were $3.5 million for the third quarter 2012 versus $3.7 million reported in the same period last year. The slight decrease is a result of several factors. First, there was a reallocation of certain expenses from research and development into general administration to properly reflect commercial operations. Secondly, stock-based compensation is approximately $1.7 million below the comparable figure in 2011. Approval of the MelaFind PMA in 2011 resulted in the vesting of a significant member performance-based options in its correspondingly large expense. Without the reallocation of the research and development expenses and the stock-based option charges, general and administrative expenses would have increased approximately $400,000, which was the result of the expansion of our sales force, incremental marketing costs and an increase in indirect costs associated with the placement of MelaFind systems in the doctor's offices in the U.S. and in Germany. Our net loss for the third quarter 2012 was $5.4 million or a loss of $0.17 per share versus a reported loss in the third quarter of 2011 of $6.1 million or a loss of $0.24 per share. At the end of the third quarter, the company's cash and cash equivalents were $13.3 million. We have selectively been using our asset market funding vehicle in order to reduce our burn rate. During the quarter, we raised about $3.4 million through this vehicle. It is important to point out that we continue to be focused on expense control despite significant ramp-up and expansion activities. We continue to balance the need to invest in building our market opportunity and revenue growth with a keen focus on controlling cash expenditures. I'd now like to turn the call back to Joseph for concluding remarks, and then we will open it up for questions. Joseph V. Gulfo: Thank you, Richard. So we're pleased to report the many achievements we have reached in the third quarter, most notably, the heightened activity of our commercial launch in the U.S. and Germany, which are succeeding as expected in accordance with our plans. We are looking forward to an expanded and accelerated rollout of MelaFind for the remainder of the year and into 2013, and putting the device into the hands of an increasing number of dermatologists. We will continue with our delivered approach as we work to increase usage and ensure the product's long-term success. In conclusion, we are confident in our people and the power of our strategic plan, and we continue to execute with passion and purpose. We will now open the call for questions.

[Operator Instructions] Our first question comes from Dalton Chandler from Needham & Company. Dalton L. Chandler - Needham & Company, LLC, Research Division: So your objective is to get 275 signed agreements by the end of March. So if I've done the math right here, you have 99 in hand, you have 41 out, and you need to -- another 135 signed in roughly the next 4 months. So the question is, do you have those 135 identified, or where do you stand in that process? Joseph V. Gulfo: Well, we have a substantial sales funnel, and we're very, very confident in achieving that number. And you could see with the increased pace -- and thank you for picking up on all those facts, the same numbers for the end of the quarter were 45 placed, another 14 signed contracts out -- I'm sorry, another signed contract in hand and 16 contracts out for a total of 75. So in just the 1 month and a handful of days of November, that total number 75 jumps to 140. So with the increased number of sales reps that we added, both in July, came onboard in August and especially, at the end of September, and the SOS, the system operations specialist team that does the training and installs, so the sales reps sell, you can see a market jump in the activity. Dalton L. Chandler - Needham & Company, LLC, Research Division: Okay. And what happens between the time when you send an agreement out and you get it back? Is the customer interacting with you, asking a lot of questions? Are they doing internal deliberations? Just what happens there? Joseph V. Gulfo: A variety of things. Sometimes, we'll hear from their lawyer about certain aspects of the contract. Other times, they're showing it to their partners, so that they see -- they definitely want to do it and they're just getting buy-in from their partners, and then, the normal scheduling things and whatnot taking place. So there's not really much back and forth about the science, about the medicine of the products -- of the sale. It's really more about logistics. We don't -- and the contract itself. We don't put a contract out, for example, in the initial package of information, right? We only give a customer contract when they basically say they want one, right? Significant interest. And that's why we have that 100% conversion rate. And in smaller practices, it will take a couple of weeks. In some larger practices, like there was one medical institution that took a couple of months. There's one that we gave, I think, in June and it's still out, okay? And this -- the dermatologists said they want it and it's going through the review committee at a major medical institution. Dalton L. Chandler - Needham & Company, LLC, Research Division: Okay. And you have touched on this a little bit, but just on average, what is the amount of time between sending an agreement out and getting it back? If you... Joseph V. Gulfo: Don't know. Don't know. I think the quickest has been 1 day and the longest so far has been since June at that university center, right? So let's call it 4.5 months. Dalton L. Chandler - Needham & Company, LLC, Research Division: Okay. And then just moving onto a different topic. You said you'd ordered systems from Askion to get you through the first quarter of next year. Presumably, after you get through that quarter you're going to really try to ramp up the placements. So what is the plan after the end of the first quarter? Richard I. Steinhart: Well, we basically have a plan for the year for that, Dalton, and we will essentially put out purchase orders quarterly based on demand and where our budget is. So what you saw was certainly the first of that for next year, and that will continue.

Our next question comes from Scott Gleason from Stephens. Trey Cobb - Stephens Inc., Research Division: This is Trey Cobb on for Scott. First, Joe, just to stick with the system placements. How should we gauge kind of the physician interest level to date? You guys obviously had a step-up in system placements and orders over the past months. Are you seeing a pick-up in interest and how should we think about that trajectory going forward over the next few quarters? Joseph V. Gulfo: Well, we're -- when I say we're executing to plan, this is what I'm getting at. We purposely, in the beginning, did not want to put many out, and we didn't. We then wanted to put a growing number out and we hired accordingly more sales reps and scaled up other activities that generate demand. So I would just stick to our number of 200 and look to how many more we need and allocate that over the ensuing months, realizing holidays and whatnot, right? So I don't know if we're going to have another October, for Christmas for December, but we expect that kind of level of demand related to the number of the practice going forward. Trey Cobb - Stephens Inc., Research Division: And then just to make sure I heard you right in your commentary, you're already seeing additional system orders from existing customers? Is that right?

Yes. Trey Cobb - Stephens Inc., Research Division: So are these going to, I guess, additional sites or some of these going to actually the same sites where the... Joseph V. Gulfo: Yes, we -- these are going to additional office locations. So we have not yet -- okay, with one exception, one university center that basically has all the partners on one huge floor. They have 2 basically in the same location. The others have been in separate physical locations. So what we have not yet seen -- what we have not seen yet is a group ordering another MelaFind for the room right next to the one the current one is in. That will happen, and I'm confident that will happen when usage goes up, okay? And we are only just beginning to move usage to the priority level that we put placements at, of course. So stay tuned for when I report that we seen that. Trey Cobb - Stephens Inc., Research Division: Okay. That was helpful. And then sticking with utilization. Maybe if you could talk about trends to date for those systems that have been out in the field for a while. How quickly are you seeing the physicians ramp from that one use a day to multiple uses per day? It seems like from a few of the offices we've talked to, there's really not much ramp-up. They're just going straight in, and they're seeing 3 or 4 uses a day pretty quickly. Just any color you can provide there. Joseph V. Gulfo: Yes, we don't have enough global numbers yet. We have some really good anecdotes, but overall, certainly, I would say there's one a day overall. The other thing to realize is that in the initial rollout, we really focused, as we said we would on KOLs, key opinion leaders. And these are the folks that are very, very smart, can get the product, see its importance to the disease and all that, but they don't practice a lot. They are not in their offices a lot. So I think, when once we have a little more time, where we now have it in the hands of people who practice a lot, I'll be able to answer your question more intelligently. I just, today, was with a customer who loves MelaFind and uses it several times a day. And we didn't do anything special with him, he just got it. He's one of the ones you just talked about who just got it and ran with it. So stay tuned. We clearly have palpated a need. What we've observed with a number of doctors is they try it out themselves. They want to convince themselves that MelaFind is what we say it is, and looking at the past reports and from their first experiences, really trying to figure out how best to use it. And that's where, I think, we can do a heck of a lot better. And these peer-to-peer videos from other doctors who have gotten themselves to that medical conversion or from talking to one of their peers got themselves there, we want to expedite that. And I think that's the real key. Once we have that medical conversion, we could really then foster the usage. I remember speaking to one KOL at the American Society of Dermatologic Surgery meeting and I asked this person, I said, "So what do you think of MelaFind?" "I absolutely love it." And this person doesn't use them a lot. Are you kidding? And he just told me some great clinical story and the whole bit. And I said, "Well, how do I get you to use it more?" "Well, Joe, I just lost a partner, I'm doing this, I'm doing this, and I have a TV show." And so it's very interesting that the KOLs -- we can't expect the KOLs to be the real big users, okay? So we're living that firsthand. However, we have can have the KOLs help us in teaching others how to get to their medical conversion, and that's what we're going to do and roll that out.

Our next question comes from Josh Jennings from Cowen and Company. Joshua T. Jennings - Cowen and Company, LLC, Research Division: I guess, just first, you mentioned that you've had some interest in some regional health systems. Can you just talk about how far along you are down, in terms of discussions with them, and what type of system placements we could potentially see in one regional health system? Joseph V. Gulfo: I -- I mean, sure, I can. But I don't know if I should, Okay? So I just like to be honest. Joshua T. Jennings - Cowen and Company, LLC, Research Division: I guess, just to ask another way, can this potentially help you achieve your guidance of 200 systems in the U.S. within the first 12 months of commercialization? Joseph V. Gulfo: Absolutely. And none of those are in the numbers I already gave you. None of the big number placements where one bolus -- we're in the 140 that I gave you. Joshua T. Jennings - Cowen and Company, LLC, Research Division: Great. And then, just -- if you could just -- I missed the first part of the call and I apologize. I was stuck on another earnings call, but can you just walk us through the step down and recognize revenue sequentially. You had 20 systems that were installed in the quarter, is my understanding but then the revenues came in just a little bit shy of Q2. Is that -- is there any pricing issues or is that all just utilization? Joseph V. Gulfo: First of all, if I may, because you came on a little late, if the 14, we have 14 systems that we have signed contracts in the quarter for, but we didn't install them. So we don't count that revenue, okay? So if we did install them in the quarter or if we did book revenue on receiving the signed contract, you would have had more, you would have had higher recognized revenues. But Richard, could you please fill in Josh with the... Richard I. Steinhart: Revenue recognition for the U.S. systems hasn't changed very much from what we've been doing. So we recognized 20% to 25% or so of the amount up front and the balance over the life of the contract, usually 2 years. So it's really just a small amount of the contract placement fee that we recognize in the -- once the system is installed and doctors trained. And then beyond that, you would recognize that the revenue for the box of cards that we would sell to the doctors. Joshua T. Jennings - Cowen and Company, LLC, Research Division: If you look at the number of revenue generating systems that were installed in the quarter, that was higher in Q3 than Q2, correct? Joseph V. Gulfo: It's about the same. Richard I. Steinhart: Yes, exactly the same. Joshua T. Jennings - Cowen and Company, LLC, Research Division: So was the sequential downtick all driven by utilization levels? Is that how to think -- I'm just trying to justify the increased number of systems in the field but yet just slightly decreased revenue recognition in Q3 versus Q2. Richard I. Steinhart: I think there were a combination of factors, Josh. In Germany, for example, we don't get a fee up front. It's typically just a monthly fee. So that was a little bit lower and, I think, in the prior quarter. And then there were a whole series of different things in there that get very detailed and I don't think we need to go through on the phone, go to on the call, but there's a whole series of different issues.

Our next question comes from Greg Chodaczek from First Analysis. Greg Chodaczek - First Analysis Securities Corporation, Research Division: Just a couple. Joseph, you've talked about the time from signed contract to install, what's the average time? I think you gave a big range, but can you narrow that down, saying it takes an average of 5 weeks or something from that signed contract. Joseph V. Gulfo: I can't. The best I can give you is that the 14 that we ended June -- excuse me, September 30 with, all 14 of them were installed in the first 3 weeks of October. Okay? So that's the best average I can give you, that's the one I know. Also, I'll tell you as we -- one more thing, we did install 10 in a three-day period. Greg Chodaczek - First Analysis Securities Corporation, Research Division: And what's the bottleneck? Is it everything? Is it the derm practices? Is it not enough people? I'm just trying to figure out why is that changing and why is it different? Joseph V. Gulfo: It's all scheduling. It's scheduling at that point. It's -- the doctors not in. The practice champion has to be there, the person on the install we need to do the training. Or the FDA-mandated training. We do that all at once. We don't want to be making multiple visits to the doctor's office. So it's really logistical coordination, more on their end than our end. Greg Chodaczek - First Analysis Securities Corporation, Research Division: Okay. And I'm going to go back to one of Josh's questions. Sequentially, your revenue was down. So quarter-over-quarter, your revenue is down. You installed a similar amount of MelaFinds quarter-over-quarter, which means, now, you have more MelaFinds out there at the end of Q3 than you had at the end of Q2. So you should have more consumable revenue than you had in Q2. Joseph V. Gulfo: Yes, but was summer. I was, as I said in my comments, the usage over the summer was [indiscernible]. So they have that. The other -- one of my colleagues here is reminding me, we had a couple of placements -- we had a couple of educational placements in there. So that's really the difference. Greg Chodaczek - First Analysis Securities Corporation, Research Division: Okay. So you have -- you're in the beginning of the install curve here and depending on where those installs go, it could change your revenue numbers? You can't draw a straight line? Joseph V. Gulfo: I think, at this stage, yes. At these low numbers and where, of installations, you can have that kind of phenomenon we just did. Once the usage goes up, I'm sure that, that would mute any of the variables there. But I really want to, again, focus you on that activity in the quarter having those 14 in hand and then installing them all and recognizing the revenues within 3 weeks is something we just can't forget. Greg Chodaczek - First Analysis Securities Corporation, Research Division: No, I understand that, Joseph. And when MelaFind is installed, you have the derms get a box of 25 cards and then when they reorder, that's a box of 50? Joseph V. Gulfo: Yes. Greg Chodaczek - First Analysis Securities Corporation, Research Division: And I know the answer is going to be, it’s all over the board, depends on if it's a KOL or if it's a doctor on the Upper East Side, but how soon until they reorder after that first initial 25 box? Joseph V. Gulfo: It's interesting. We've had cases where a doctor will buy a box when they buy the system. We've had examples of that. It's at least a month, usually. They go through what they have. They start focusing on it. Our sales people go back in to engage them. So I'd say a month or 2. Greg Chodaczek - First Analysis Securities Corporation, Research Division: Just a few more and hopefully they're quick. Of the 275 at the end of placements, at the end of Q1 2013, if I do the math right, based on your 90%, that's 247 generating revenue by that time? Or thereabouts? Joseph V. Gulfo: Yes, it's as if 0.9, right, x 275, is that number, yes. Greg Chodaczek - First Analysis Securities Corporation, Research Division: And then for -- I guess from April 2013 through March '14, you're saying you're going to place another -- if I get the numbers right, another 412, that's what you said, based on a 50% increase. Joseph V. Gulfo: Right. 1.5 x 275 Richard I. Steinhart: Round number, that's right. Dalton L. Chandler - Needham & Company, LLC, Research Division: And Richard, can I back into the consumable revenue based on the numbers you've given us on -- not placements, but generating revenue based on the $2,000 upfront that you're recognizing, based on the number of machines placed that quarter -- I shouldn't say placed, but generating revenue that I can come up with a consumable number? Is it pretty simple like that? Richard I. Steinhart: No, it would be hard because there's some variable pricing in Germany, as I said, and a couple of the systems were done on discount that we gave at the Summer AAD conference. So there's some variety in the pricing in there that would make that a little difficult to do. Greg Chodaczek - First Analysis Securities Corporation, Research Division: Okay, 2 quick ones. You talked about July and August. You think this seasonality happens every year? With derms? Joseph V. Gulfo: I don't know. I will tell you, this is anecdotal, okay? We haven't studied these, we haven't looked at trends. We have heard some people tell us that this was the slowest year they've seen. This is sales reps, our own, as well as when we're at the meetings. So this was anecdotal again, I have no data, but just the feeling this year was -- there was less activity over these summer months than previously seen. Greg Chodaczek - First Analysis Securities Corporation, Research Division: And this is my last one and I apologize to anybody who’s in the queue behind me. Any idea what percentage of MelaFinds out there right now, as of the end of this past quarter, are in the hands of KOLs compared to a typical dermatologist? Joseph V. Gulfo: I don't know. I'd say at least 20 % are KOL. Actually it might -- one of -- my head of commercial is telling me, no, even more than that.

Our next question comes from John Sullivan from Leerink Swann. John L. Sullivan - Leerink Swann LLC, Research Division: A couple of quick ones. First of all, a couple of questions here have been around bottleneck and whether there's -- whether there are bottlenecks in the process. I think of your process, past manufacturing, as selling, contracting, installing and training. Is there one of those 4 that you would characterize as more of a bottleneck than the others right now, given your own capacity? Joseph V. Gulfo: No. And I don't see a bottleneck. I see scheduling. So if I seem defensive but I wouldn't call it a bottleneck. John L. Sullivan - Leerink Swann LLC, Research Division: Okay, great. Can you just talk about how many sales guys you have on quota at the company today and how many you might anticipate at dates in the future? Joseph V. Gulfo: Yes, we have 7 right now in the U.S. and we'll -- I said previously, that by March 31, 2013, I could see that number 12. And in Germany, we've had -- we have 3 basically now, we're adding 2. And I could see that number, I said previously get to, by March 31, 6 to 8. John L. Sullivan - Leerink Swann LLC, Research Division: The 3 that you mentioned for Germany, includes the 2 that you say you're adding right now? Joseph V. Gulfo: No. John L. Sullivan - Leerink Swann LLC, Research Division: So 3 now, adding 2 more and thinking, by the end of March, you could be at... Joseph V. Gulfo: At least 1 to 3 more. John L. Sullivan - Leerink Swann LLC, Research Division: 6 to 8 total, something like that. Okay. Can you talk for a minute about the user experience. I get these questions around utilization, but can you talk about whether clients are -- whether your clients are having success -- having success, clinically, with the system? Can you give us some sense of how docs are responding to the system, once they start using it? Joseph V. Gulfo: Yes. We just made -- we have a lot of raw footage from at least 10, if not more of our -- of users, who have had their medical conversion. And we're hearing things like, we just got a call yesterday from someone. They had a lesion that didn't look all that peculiar to them, didn't want to do a biopsy, put MelaFind on it. MelaFind was high and they looked at other aspects MelaFind provides, and decided this is really concerning. And they did a wider excision than they normally would, based on MelaFind, and it was indeed a melanoma. And they were thrilled that they did, basically, an excisional biopsy, not just a regular biopsy that could risk leaving disease behind and not even needing now to treat due to the cure at inception. All right? That was a story that just got called to us yesterday. We hear stories of doctors detecting melanomas they wouldn't have detected. I had a -- I just was with another user today and he told me that he has a patient that he follows very, very closely and he put MelaFind on -- he has done a physical exam on her, Day 1, told her to come back. He wants to do another one assisted with MelaFind. Put MelaFind on 5 lesions, 2 where high, one was a high grade dysplasia, one was a melanoma; 3 were low. And it's just a great experience. So we're hearing that they are beginning to use other aspects of the system, looking at the lesion below the surface and how disorganized it's appearing. They're beginning to experiment more with the product, not just the output of high, low. And we're hearing really great things. We've heard another doctor tell us that it really helps them now. And now he just puts it on every lesion he biopsies because he wants to know what MelaFind thinks of the lesion, "to help better interpret the path report that comes back". Do I need to re-excise if there's a margin on the dysplastic nevi or not? Well, gee, let me look at what MelaFind's analysis under the surface really showed me, what is it saying to me? So, this is why we ran off to make these videos and why we will, ultimately, have a roundtable of users to chronicle all these pros and pitfalls, so that other people can learn how to use it. So one of the things that really impressed me in this process, so far, which I didn't realize, is they practice very differently. Very differently. A gentleman I was with today, practices very differently than the person who told me the way they use it from the one who called me yesterday with the story. So what we're landing on is, we're trying to get down to these archetypes, I have used that word in the past, but there's even archetypes about, not only their practice is, three-person practice, 5 offices, 4 PAs or one-person practice and one nurse, so there's practice archetypes but there's even methodological practice archetypes, the way they approach a patient. So I can tell -- oh, the guy I had lunch with today, right? Half the time he uses it, he gets the low reading, half the time he gets the high reading, okay? So I can tell, he's a cutter. He's a guy who doesn't -- he just takes off anything that's the least of concern to him. I can tell other people who tell me that, "Gee, MelaFind seems to be high on most, if not all the lesions. " Okay, this guy is not cutting off, probably missing melanomas at when we could catch them earlier. So I could just tell by what they're telling me their experience, so far, MelaFind is, what kind of practice they're in, and then I can I guide them. We can guide them. We can say okay, so you can have great confidence in a negative than not. Because the way you're using MelaFind is, you just won't -- you can rely on it not to make you do unnecessary biopsies, than more than you're doing now. Or "Doctor, gee, you really could use it more because you're probably letting some early-stage melanomas walk out the door." So we need to -- we've appreciated the need to bottle that and get it out to people, and help them realize what kind of doctor are they and their practice style and, given that, how is this tool most helpful to them. And only when they have their medical conversion do we start doing things to get the usage up, right, and we're only starting to do those things now. We've purposely wanted to wait. We've seen organic, how they do it on their own, but we didn't want to get them offering it to all their patients or doing things that would make the patients ask for it without them knowing what to expect from the tool. That would be a prescription for disaster. John L. Sullivan - Leerink Swann LLC, Research Division: Great. And then my last 2 questions, are just -- can you just talk about the decision to raise the price of the system and how you arrived at it and how it's being -- what sort of experience you're having with the price change? And then secondly, as you go through your sales process, is there any pushback from clinicians anticipating problems in the reimbursement areas, specifically the lack of reimbursement for use of the -- patient reimbursement for use of the MelaFind system? Joseph V. Gulfo: Sure. So number one, the price increase. Well, after you're in the markets 6 months, you can no longer use the word, new, from a regulatory point of view. So our marketing team said, with that you take a price increase. And we did. And people haven't batted an eye. So that's why we did that. And then, reimbursement. So sure, there are times we talked to a doc and they don't feel that this is something that would be -- they'd be successful in their practice. The overwhelming majority of the time, reimbursement simply is not an issue to the doctors. So there are some -- there is one health system we're talking to that wants to do a pilot with us and we'll be setting that up where that model wouldn't work, the price per patient model wouldn't work. We'd have to come up with another scheme for them that would allow them to use it, basically, much more widely but at a different type maybe lease arrangement or something. So we're running into that question, not that much. And in places where we really would want to be, we're going to adapt, we'll work with them to adapt that model. Do you want to add anything to that, Richard? Richard I. Steinhart: No, I think that's right. That's really what we're playing into.

Our next question comes from Steve Brozak from WBB Securities. Stephen G. Brozak - WBB Securities, LLC, Research Division: There's one item here that I'd like to go past the clinicians because, obviously, the end-users are really the patients. What kind of color can you give us in terms of what the patients are seeing? Because obviously, what you sent out by email, there was a -- on the publication side, there was a -- obviously the trial that 20% elected not to biopsy and considering that these patients, they're going to be some -- fair skin people are going to be some frequent flyers in terms of being biopsied and, obviously, that's, in some cases, can be pretty traumatic. So, what kind of insight are you starting to see on that? Because, obviously, not all biopsies are created equal. And when you're dealing with facial biopsies versus the rest of the body, you got other considerations to think about. And I'll have one follow-up question after that, related to the patients. Joseph V. Gulfo: Yes. So we, again, we don't talk to the patients directly, right? So it's hearing from the doctors. And routinely, we hear, patients love this. Patients want this done to them. They feel that the practice is giving them more attention. That -- it's funny -- just please hold for a moment. Rich, I can't read your writing. Why don't you just say it out loud. Richard I. Steinhart: The money manager -- went to one our melanoma... Joseph V. Gulfo: Oh, thank you. Okay. So here is a fund manager that we've known for years, called me up and he said he just went to a doctor, and the doctor put MelaFind on him and he very much enjoyed it. Number one, he was thrilled to see it because we had lost contact with him, but then he asked the doctor what the doctor thought of it. And he said the doctor went on for 5 minutes about how this is, how they use it, what price did that doctor charge? Or was... Richard I. Steinhart: $250, $225? Joseph V. Gulfo: And this person is charging more than we've heard other people say. So he was thrilled to have it done to him and he reported that the doctor went on and on about it. Now it's interesting -- this does not answer your question, but it brings up a point, and I'm glad Richard pointed it out to me. One of the things that delighted me the most with that story was that I never met that doctor. Our head clinical person who ran the pivotal trial never met the doctor. And our new sales rep, who isn't among our most prolific, sold it to that doctor. So what I hung up saying is, my gosh, we have a very scalable product here. Miss Roy or I don't have to meet every patient, every doctor. So that was good. So other doctors routinely tell us, patients very much enjoy it, love the additional attention. We made -- when the doctors asked us for more features of it and we baited these features, when we showed them the novel images MelaFind can provide and other things, you had a number of doctors tell us, "You guys, give me that. Patients will love that." And sure enough, the feedback we got when we first started rolling that out, was from a doctor who told me, "I have very highly intelligent patients. I have a guy who works on Wall Street, I have a physicist patient, and they just loved it. They just loved watching it. One of the customers called me and said, 'Gee, could you have those images, those things that the machine is doing, you have it come up sooner.'" Because there's a little bit of a delay on the screen and the patients are just looking at the screen, waiting for the next thing to pop up. So from these kind of anecdotes, Steve, we're hearing that patients very much like it and its corroborating what we've personally experienced on the pivotal trial. Stephen G. Brozak - WBB Securities, LLC, Research Division: And following up, because, obviously, I've mentioned you're going to have -- obviously, the clinicians are going to be using this for patients that they are more involved with than others. What's your modeling in terms of the frequent flyers, like I said, that are going in, a fair-skinned person that's going to be coming in and that is -- how will you go out there and what's your plan to address how clinicians deal with that person? Because obviously, these people are continuously coming in to the office because obviously, they don't want a situation where something looks funny today, and tomorrow, it's a real problem. They've all got stories like that. So what's your approach -- what's your planned approach for the treatment of those types of patients and I'll hop back in the queue after that. Joseph V. Gulfo: I want to clarify the question before I answer something you didn't ask and waste the time. So what are you -- can you repeat what you mean about what's our approach to a doctor who is seeing the patient, what? Frequently? I don't understand. Stephen G. Brozak - WBB Securities, LLC, Research Division: Yes, there's going to be -- there are going to be some patients that are obviously going to be in the doctor's office, let's say, every 6 months for continued monitoring, because they just happen to fit a certain profile, and/or they just -- they caught something soon enough and these are people that are not going to be the normal dermatological patient. Joseph V. Gulfo: So this is an interesting question. So one of the models we thought about when we started was the, basically, health club membership model. That kind of patient, you would buy a card or an ability to use the system frequently over a period of time rather than just one shot. And we shied away from that and I tell you, we haven't had requests. The doctor I was with today told me that he has a train wreck patient like that. Very, very, fair-skinned, covered with very, very dark spots. Sees this patient every 3 to 6 months and this patient just bought 2 cards. Wanted him to put it on as many lesions as he felt needed. So that's something we have our eye on. I think there's certainly a way we can have a different program for a patient like that and if it helps the doctor practice better medicine and we can do it, why wouldn't we? So we have our eyes and ears open on that.

Our next question is a follow-up from Dalton Chandler from Needham & Company. Dalton L. Chandler - Needham & Company, LLC, Research Division: Just real quickly, it looks like your cash balance is down about $4 million quarter-over-quarter and I think you said you also raised about $3.4 million which implies somewhere around a $7.5 million burn. Is that accurate and where do you see that going as you continue to ramp up here? Richard I. Steinhart: Yes, that's about right, Dalton. Remember, we're buying equipment. We're buying the MelaFind units and putting them out. And we'll continue -- we've hired some new people, we've hired sales reps, as Joseph talked about, we hired some of the technical support people in the field and whatnot, so that's kind of plateaued at this point. We will continue to buy units and use the ATM appropriately. John L. Sullivan - Leerink Swann LLC, Research Division: So you don't really expect much of an increase off of this $7.5 million level? Richard I. Steinhart: Well, I think that's probably a good number for the next few quarters.

I'm showing no further questions. I'll will now turn the call back over to management for closing remarks. Joseph V. Gulfo: All right. Well, number one, thank you, everybody, for staying on as long as you did and the interest you're showing. We're very excited here. We're at an inflection point in our activity with our infrastructure, to enable it, and we're beginning now to move, to elevate to a higher priority, the system usage, which is really how we build our business. So very exciting times for us and stay tuned. Thank you very much.

Thank you. Ladies and gentlemen, that does conclude today's conference. You may all disconnect and have a wonderful day.