Will Moore – President and CEO Susan Bruce – Executive Administrator Jim Mackaness – CFO and COO.

Joe Munda – Sidoti & Company Larry Haimovitch – Haimovitch Medical Sam Bergman – Bayberry Asset.

Greetings, and welcome to the IRIDEX Corporation Third Quarter 2014 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr.

Will Moore. Thank you, Mr. Moore, you may now begin..

Thank you, operator. Good afternoon and thank you for joining us to discuss the results of third quarter of 2014. My name is Will Moore, and I am the CEO of IRIDEX. I am joined today by Jim Mackaness, our CFO and COO.

Jim and I will be delivering some prepared remarks related to the quarter and to the business and then we will open the floor for questions. Before we get started, Susan Bruce will read the required Safe Harbor statement.

Susan?.

This conference call will contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Act of 1934 as amended relating to global and domestic market conditions; demand for the company’s products and market acceptance of the company’s new products such as MicroPulse enabled laser devices, ExCel delivery devices and the XR Probes, and the impact of these new products from the company’s business, trends in the global healthcare marketplace with respect to the treatment of eye diseases, such as diabetic macular edema and glaucoma, development of new products and new applications for existing products, the company’s growth strategy and growth opportunities, including acquisitions, technology investments and strategic relationship, pricing of the company’s products, the company’s operating expense controls and cost reduction programs, and the impact of these controls and programs on the company’s financial results.

The company’s share repurchase program, the company’s financial outlook and performance in the remainder of fiscal 2014 and future periods, regulatory developments and approvals for company’s products and the impact of sales cycles, international currency fluctuations and other industry like factors affecting the company’s business.

These statements are not guarantees of future performance and actual results may differ materially from those described in these forward-looking statements as a result of a number of factors.

Please see a detailed description of these and other risks contained in our Annual Report on Form 10-K for the fiscal year ended December 28, 2013, filed with the Securities and Exchange Commission. Forward-looking statements contained in this conference call are made as of this date and will not be updated..

Thank you, Susan. So the first nine months of 2014 we delivered on our goal of double-digit revenue growth. In the third quarter we generated $10.1 million in revenues, which is a record for Q3 and the fourth consecutive quarter with sales above $10 million.

To-date the growth is going to result for strong demand for our major councils, both in the U.S. and internationally. We believe this strong demand will continue, especially given the growing interest, both domestically and internationally IRIDEX’s proprietary MicroPulse technology and our new patent generating delivery device.

Legacy laser sales are driven by two factors, the replacement cycle purchases in the developed world and expanding healthcare coverage resulting in new sales in the developing world.

We believe that the IQ family of MicroPulse lasers are TxCell [ph] are allowing IRIDEX to win increased market share to develop and to stimulate new demand in the developing world markets. Together these factors help IRIDEX increase laser sales by more than 20% in Q3 versus the prior year.

I’m going to stop now and return after Jim’s remarks to provide information regarding our upcoming glaucoma market introduction. With that, I will turn the call over to Jim to discuss the financials in more detail.

Jim?.

Thanks, Will. As we noted in our press release and in Will’s comments our revenues for Q3 2014 of $10.1 million were a record for our third quarter, and were up 6% from Q3 2013 revenues. And it’s worth noting that Q3 2013 revenues were up 21% from Q3 of 2012. The business continues to display underlying strength in both domestic and overseas market.

Total system sales in Q3 2014 were $5.5 million, up 17% from $4.7 million in Q3 2013 with year-over-year increases both domestically and internationally.

The summer months can be a little soft for capital purchases but with Q3 behind us, we can now see that for the first nine months of this year, we have seen overall systems sales increase $3.5 million or 26% compared to the first nine months of 2013, and we can see that this growth is being driven by demand for our MicroPulse Lasers.

In the first nine months of this year we sold 31% more MicroPulse Lasers than we did in the first nine months of last year, and currently one in every three lasers we sell is a MicroPulse enabled laser.

In addition, the demand for MicroPulse Lasers pulls with it the demand for TxCell scanning delivery devices and currently 50% of our MicroPulse Lasers are sold with a TxCell scanning delivery device.

Recurring revenues were $4.6 million in Q3 2014 compared to recurring revenues of $4.5 million in Q3 2013 and we did have a onetime sale of $200,000 of agreeing to consumables to one of our distribution partners last year. Excluding that our recurring revenues still remain constant between the two periods.

We do continue to experience strong competition in our historical base. The addition of the independent sales force focused on the ASC here in the U.S. has helped to mitigate this strength and the recent addition of our patented XR Probe gives us a new product to win new business.

We’ve already seen four new account wins since the launch of the XR Probe as AAO earlier this month. Overall, gross margins in 2014 third quarter continued to move in the right direction. We came in at 50.9% above our second interim [ph] goal of 50%, this compares to 50.0% in Q2 and 49.6% for Q3 2013 and indicates a good trend.

This is particularly noteworthy because our gross margin is impacted by our strong system sales, especially the international distributors where margins are more constraint. We are already beginning to reap some of the benefits of the IQ cost reduction program in which we have been investing and anticipating more benefit in 2015.

Our long term goal as our product mix including a high percentage of consumable products and is rebouncing towards consumables together with the full benefit from the cost reduction program, and increased production efficiencies associated with revenue growth, a part of our plan to achieve our longer term target of 55% or better.

Operating expenses for Q3 2014 were $4.5 million, up from $4.1 million in Q3 2013, but down from $4.9 million for Q2 of this year.

The growth over last year reflects of a rise in investments, both commercial and product development, and the both near and long term strategies to continue growing our market share and to take advantage of opportunities in both retina and glaucoma market. And the redemption from the preseason quarter shows some of these programs coming to an end.

Specifically, as we’ve noted over the last couple of quarters, R&D expenses increased due to the cost reduction program for the IQ platform, and the development efforts on the new glaucoma product offerings amongst other thing. And we indicated these products were finite in nature and would benefit both, the revenue line and gross margin.

The good news is that we’re already seeing some of the margin improvement as a result of the cost reduction program for the IQ platform and the majority of investment is behind us. We had originally targeted the cost savings of $2000 per unit and we raised that target to $2500.

We are already benefiting from a $1000 per unit savings and anticipate the additional $1500 to come online towards the middle of 2015. And that on current unit volumes this program will enhance our gross profits by over $0.6 million on an annualized basis.

Operating income in 2014 third quarter was $0.6 million compared with operating income of $0.7 million in last year’s third quarter. Net income was $0.5 million or $0.05 per diluted share for the third quarter of 2014 compared to the net income of last year’s third quarter of $0.5 million or $0.05 per diluted share.

Looking ahead to the full quarter of 2014 we’re projecting revenues between $10.9 million to $11.2 million compared to revenue of $10.6 million for 2013, and this could possible represent our first $11 million revenue quarter.

Gross margin is anticipated to come in between 49% and 51%, and operating expenses are expected to be between $4.7 million and $4.9 million. During the quarter we purchased 146,000 shares at an average price of $7.98 per share, and at the end of the quarter we had $2.2 million left to invest. And with that, I’ll turn the call back over to Will.

Will?.

Thank you, Jim. Over the past year or so we’ve spent most of our time with investment community and our quarterly calls talking about MicroPulse, our proprietary tissue-sparing laser technology. MicroPulse has undoubtedly become an established part of module landscape.

[indiscernible] gains content with safety record along with outcomes and using it as a first line treatment for a variety of ophthalmology disorders such as retina and more recently improving the outlook efficiency in the expected meshwork to reduce IOP and glaucoma.

Today we would like to provide a glimpse into our future product offerings in Glaucoma. Let’s start with the opportunity. As many of you may know glaucoma is a degenerative optic nerve condition which is reflected by elevated intraocular pressures or IOP as major more than 50 million people.

The cost to society and global healthcare systems from the effect of this disease including major cases of blindness are meet. It is one of the leading causes of blindness and unfortunately growing at epidemic pace worldwide.

Glaucoma is, at present, incurable and therefore treatment protocols focus on delaying or temporary causing the progress of the disease. Elevated IOP is caused by either increased inflow of fluid into the eye or decrease in outflow.

IRIDEX currently offers two products that can be used in the treatment of glaucoma, our IQ 532 MicroPulse Laser, addressed to the glaucoma market in 2012 for trabeculoplasty or MLT which is used to improve outflow in our G-probes which is used to reduce inflow.

These two products put us in front of glaucoma doctors around the world and it’s these doctors who have made us keenly aware that more and better solutions are needed in the market. In the early stages of glaucoma treatments, the doctor would usually prescribe medication in the form of eye drops.

These treatment work but for many patients the issue is compliance, the drop cannot treat the illness when a patient forgets to use the drop or does not administer the medicine as prescribed. The next stage of treatment is often used in lasers such as an IQ 532 MicroPulse to improve the outflow in a trabecular mesh network.

In those cases, where the trabecular mesh work losses its ability to drain surgery becomes the next option. Unfortunately trabeculectomy has a high complication rate with one year of post-surgical procedure. When the condition reaches the late stage there is no other choice but to reduce the inflow.

When you talk to doctors that treat glaucoma patients it is very common to hear deep dissatisfactions with the available treatment options, drop worse but not compliance to disease progression and the need to supplement with other treatments. We believe that enormous market opportunity lies in the space between the meds and the surgical procedures.

This is the target for our new Cyclo G6 MicroPulse laser with a proprietary MP3 probe. Our provocative early data indicates this MicroPulse procedure may improve outflow much the same way as meet.

Data has been submitted to the American Glaucoma Society which should result in a poster or presentation at the end of the society meeting, February 26, 2015 to March 1, 2015 in San Diego. From a regulatory standpoint, we will file a special 510-K with the FDA tomorrow, Friday, October 31st.

A special 510-K has been passed and expedited review process typically 30 days and our product development operational teams are gearing up which should allow for introduction of the Cyclo G6 laser and MP3 probe in early 2015.

The Cyclo G6 glaucoma laser is expected to be an important part of the next business evolving to a more procedural base model. Our introduction of sophisticated single use probes will result in higher revenue base on a number of treatments provided versus the number of councils placed.

Result for this change in model will be more predictable reviews that track with adoption of the technology and utilization of the system. As we reminded you last quarter, we are still a small company with significant upside with specific exposure to international and system sales cycle do still exist.

The impact of those factors will continue to create lumpiness in our revenue lines but we remain committed to profitable operations, even during those periods such as now when we are developed again releasing significant new product offerings. Finally, it’s been a long time since we discussed business development.

We have been focused on gaining leverage in our existing product platforms and innovation in the glaucoma space. As those products come to market we expect to turn them more over our attention to a number of potential opportunities outside of the company.

We now have a larger sales force and are represented in the broader slides of the ophthalmology marketplace. It makes sense to seek out technologies that can be complementary to our proprietary technologies, to better leverage our selling network.

Don’t look for any major announcements between now and early next year that is important to mention, that those efforts are active and we hope to identify opportunities that deliver growth and value to the company. I want to thank our employees and distribution partners around the world for their hard work.

With that I’ll turn the call over for questions, and please one question with a follow-up question and then requeue.

Operator?.

(Operator Instructions) Thank you. Our first question is from the line of Joe Munda with Sidoti & Company. Please go ahead with your question..

Good afternoon Will and Jim, congrats from the quarter..

Thank you..

Jim, maybe you can help me out here, system sales up 17%, consumables down about $200,000 year-over-year, yet gross margin seems to be improving at a rapid rate, I mean not an incredibly rapid rate but a nice bumpier 130 basis points year-over-year.

Can you quantify what the cost reductions were as it impacted gross margin, as well as some of the margin on the systems that you saw? Thank you..

Okay Joe, I’ll try and do my best. I think you can just take the recurring revenue as constant in the sense that it’s little bit down on the revenue growth but the pricing within that and the cost within that side of the businesses remain constant, so it really hasn’t moved anything on the margin.

So the margin improvement really has been worked out through the systems. I don’t know if I have it to the specificity you’re looking at but I would say then what really happened was as we brought micro posted the forefront, we have continued to gain pricing power within the MicroPulse on the laser itself, so that has allowed us to walk the ASP up.

It has been compounded by the fact that we have as I mentioned started to take some of the cost out. So those two elements have both have a net positive.

And then we launched the TxCell, we had a TxCell V1 has been very successful with the initial TxCell V1 was a little bit heavier because we really wanted to get into the market timely and with the launch of the TxCell V2 that similarly had some cost reduction and we’ve also walked the price of the TxCell up.

So it’s really been a situation of continue to get better margins with better pricing and cost reduction on the complete MicroPulse system, the laser and the TxCell..

Okay.

And then as far as a follow-up it goes, I’m not sure our consumables down then if you’re selling more systems, usually wouldn’t consumables sales track faster than system sales? Am I missing something?.

I think the easiest way to think of it is the growth in the MicroPulse sales is focused on the clinic side of the equation. So the systems that are being placed in the clinic have proven the growth and not systems that pull the consumable probe.

So what we see is we’ve seen a lot of consistency on the continuous wave probe side of the business but growth coming from MicroPulse being sold into the clinic which is just a capital sale of this time..

And there is no corresponding consumables behind it?.

Not on the MicroPulse in the IQ platform today sold for retinal conditions. It’s a takeaway to little bit to what Will was mentioning about us looking at the glaucoma part of the market where we do see an opportunity for a consumable attached to a new MicroPulse Laser..

Okay, that makes sense. Thank you..

You’re welcome..

And next question is from the line of Larry Haimovitch of Haimovitch Medical. Please go ahead with your question..

Thanks operator.

So following on Joe’s question, Will going back to looking at glaucoma product line, I remember when you were at Nelcor [ph] one of the things that drove that company to do so while was drain modest piece of capital equipment but tremendous use of disposables, it sounds like perhaps what we’re doing here is, we’re going back to the future with aero decks [ph] and following that model.

Do I read that right?.

Yes, you read that right.

In a different way to the previous questions that Joe had just asked, that surgical laser business is highly competitive and there were disposables who were attached that we were doing quite well, and then we moved into the MicroPulse and Jim and I spend a lot of time talking to engineering and doctors and said we got to find a way to capture that procedural volume because the locations where treatments is not growing but maybe in 3% to 5% range but the procedures are growing in double digit range.

So engineering went to the drawing board and came up with this ability to create a cathy [ph] disposable for glaucoma, and it is exactly what you’re talking about. Doctors will be rewarded by making decision on this clearly and expensive laser and sorry, but I can’t talk about pricing until the FDA is approved.

But then we will be rewarded by having a continuation of that sale for years to come. And it set up in the same manner which is there is a proprietary technology, this technology that prevents other from plugging into our [ph] so that we will be the only that use our probe on our new lasers..

And Will, hopefully overtime that will lift the disposables again because when I look at your last two, three, four quarters, I see tremendous progress on the capital equipment side driven by MicroPulse but a lag in disposable revenues which I guess are roughly half the business.

So we’re not really seeing the full benefit of how well you’re doing with the MicroPulse business because we’re seeing the disposable business kind of drag down the overall corporate growth..

I think that’s correct.

I mean, we’ve been trying to talk about MicroPulse and how to look at it so that people can see the real value at the air deck, and I think Jim has done a good job on this call to be able to separate legacy lasers from MicroPulse Lasers, the surgical retina person from the medical retina person, and when we do that we look at the medical retina side where we’re signing a clinic and that is growing in the 20% 30% range while we’re seeing the other side, the replacement cycle in the hardware being relatively flat and we see a little aggregation in the disposables.

Now what we’re looking at I think going forward is, we did a good job and Jim did a great job on getting the pairs in mind into our house. And now as we come out with the glaucoma product with [indiscernible] we’re not only going to have 10 sales people, we’ll have closer to 30 sales people selling the new product..

Great. One quick question for Jim and I’ll jump back in the queue.

On the buyback, I see you brought 146,000 shares, how many shares remain in the buyback Jim?.

We have $2.2 million left to invest..

Okay.

So obviously there is plenty of room here considering where the stock price is for you to – well, that works out to around 300,000 shares I think, correct, something like that?.

Yes, I’d go with that..

Okay, I’ll jump back in queue. Thanks guys..

Thanks..

Thank you..

(Operator Instructions) The next question is from Paul Set, a private investor. Please go ahead with your question..

Yes, thank you very much. I have two questions, I will ask one and get back in queue. I wondered the strategy since your was the lowest of distribution channel by putting other non-competitive products in the channel.

I’m wondering how that is working and if there is further opportunity?.

I think I’m asked this as well [ph] and I’ll try to answer your question. The strategy has always been to look for products that are complimentary. We did the business with – there has been a couple, one we did the business with retinal lab, we’re doing quite well, we have a great partnership with Alcon that sells lot of that product for us.

We’ve got another project with [indiscernible] that project is still under development, and then we did the agreement with Peregrine which brought us the disposable probes.

As into my prepared remarks I said we have now reached the point where we’re comfortable with our sales force, we’re comfortable with momentum on MicroPulse, we’re comfortable with the introduction of the new glaucoma series and so Jim and I are beginning to go back to that strategy of finding additional products that we could put into the system.

We’re not talking about large acquisitions, we’re talking about complementary, we call it filling products that make our salesman more efficient..

I understand that but I laud you for it because you’ve got an expensive channel in terms of your worldwide distribution and I’m sure it helps it overhead..

Many times we can make the sales people more efficient like that and we’re looking at that and I think you will see that, maybe you recall that fuller load as we get ready to come out with the brand new product that’s going to take us lot of time, and we went from 10 sales people to close to 30 over the last year in preparation for the new glaucoma product coming online..

I’ll get back in queue, thank you..

Our next question comes from the line of Sam Bergman, Bayberry Asset. Please go ahead with your question..

Good afternoon Will and Jim, nice quarter..

Thanks Sam..

Thanks..

I have a couple of questions, one we got the tenders in the third quarter versus the second quarter, can you tell us if there were any in compare to the activity of tenders in the second and third quarter versus second quarter?.

The tender activity was pretty mild and there was nothing of any real significant that we delivered in the second quarter and third quarter, I anticipate larger ones as we move to the fourth quarter.

So those are hitting the $10.1 million, next start, and now you’re really getting into what we call as lumpiness, and we get a tender of 10, 20, 30 and it changes the dynamics real fast.

But I think what we’re trying to say there is the stability of our business in the $10 million plus there and now we’re looking at maintaining that and adding on top of that some tender activity..

So are we saying that there is a backlog going into the fourth quarter of MicroPulse products or not?.

We’ve really never commented on backlogs before and I think the answer for us on this one Sam is that we feel very confident on our business at this point in time..

And regarding tenders or RFPs, have there been any RFPs with your company specifies product or not?.

Yes, there have been a few of those of substantial size, those generally take long time from the time request from the time that concerns into a tender, with time it turns into a shipment but we are seeing some tenders coming in that are requesting MicroPulse specifications only..

Do you have any idea when we could expect those RFPs to become orders?.

Well, I’m an optimistic guy and I’m going to say Jim as many times I receive one of those we’re talking about six months to nine months to maximum a year before we see it. So I think it’s a good sign for 2015. We’ve been working on some in the past and there might be one or two that comes about over the next quarter or two..

If one day it do count, is there an add-on to production or can production handle those larger orders?.

Well production can handle it, it’s one of the reasons why we’ve done the outsource project to reduce the cost and have them help build. So we have flexibility in the system. I think Jim has done a great job working with sales to improve communications, so understanding when these orders will arrive so that he then can spend time with production.

So we’re not bloating inventory but being able to build in time so we could shift. I don’t see any real issue. If we start talking about a quarter that goes from $10 million or $11 million to $30 million that’s a problem but when we start talking about these growth rates we’re talking about now..

And just one question on the glaucoma product, how much large is that market for lasers?.

We know there is over 55 million in the world that are affected.

We’re talking about thousands of doctors around the world, and this product will start out as a ASC surgery center hospital type product, and I also done as marketing and I think the real answer to that Sam is we’ll now get into a point with the FDA authorization that can talk about pricing and things of that nature, I can give you better clarity..

So you’re expecting FDA approval by the end of the year, is that what you’re expecting?.

Yes. This is a 510-K special which I will applaud our regulatory person for working with consultants in the outside. This is not a PMA, it’s just a 510-K but it’s special because of the hard work with MicroPulse that it’s a review process that has accelerated and it’s a 30-day window.

And so I’m going to assure today that everything is done and it’s going in the mail tomorrow to the FDA. So I would expect sometime early December we’ll have the ability to have the approval..

So when you said you have a largest sales force to sell that product, it’s up to 30 now, should we expect it only to be that sales force or do you feel that there is more growth to come if you align yourself with another partner?.

Well I think at this stage of the game when you come out with a brand new product like this and as Larry talked about the cathy disposability [ph] it is really important that the first few physicians, maybe hundred, are using the device with great education and understanding how it works and you eliminate what I’ll call content errors.

And therefore when they use it, it works every time. At that point of time you start thinking about expanding if you can handle it, handle the demand with your sales force. I think with our 10 direct people and pushing them 16, 18, 20 independent that’s enough for the U.S.

to begin with, and that’s where we’ll start and then we’ll introduce to the rest of the world sometime in middle of the year and there we have 70 plus distributors, well I can’t begin to count how many sales people involved there.

So I think we’re okay but products like what we have – and for a company like ours it’s $40 million I think your question really is, could somebody bigger like Alcon [ph] just can get some more than we could, the answer is probably yes..

Okay.

In the last show you were at the AAO, what kind of excitement was probably in books on that product, what were you hearing?.

On the glaucoma product?.

Yes. I know you couldn’t show it….

Glaucoma product was under locking fee because of the FDA situation, we do have approval already on the probe but away from the box so you can’t show it, you can’t price it.

So we had two people from marketing that were there answering questions to Glaucoma doctors looking for perspective clients that would use more than a 100 probes a year, and the response is pretty good..

Sounds great, thank you very much..

Thanks..

The next question comes from the line of Sam Man, Man Investors [ph]. Please go ahead with your question..

Good job, gentlemen..

Thanks..

It sounds like we’re onto a big, big great fruit [ph] by the way. But my question is, docs make a lot of money on a procedure and sometimes sell the drug, so a procedure becomes even if it expectedly that used [ph].

So my question is, is there ways and of disposable that will go with it, that will save a lot of money for the people that will be used on.

So my question is what is your market research or your talking to docs, what is the feedback on the drug profitability for docs versus using our system, once it gets through beta testing or what I would call doctor approval..

Well I’m at a little background, your question because we plan to these spaces, retina and glaucoma, there is two distinctive things going on with what it said.

In the retinal side, I totally agree with you, doctors use injections, meds, whatever you want to call it and they make money doing that and to the tune of our government spending $1.6 billion a year in those types of injections for DMEA and AMD.

When you come to glaucoma, it is completely different, these are prescriptions that are given out or script, the doctors do not make money doing that. Sorry, Sam, go ahead..

They don’t handle the drug?.

No, they do get their office visits and the patients comes back and the standard process is glaucoma usually is a disease that affects people 70 or 80 years old which becomes difficult to take the drugs that’s why the compliance is such a big issue, patient comes in, they pressure up, they’re given the meds, they come back again, their pressure is up, the doctor asks are you taking your meds, well, I tried to, this goes on for a while until that pressure builds to a point that doctor has to intervene.

What we have targeted is using a laser at a very early stage in this process when the doctor begins to lose compliance and the pressure builds.

Now in the very beginning stages we’re going to be in a place right before Laser Trabeculoplasty or surgery, as overtime it’s our viewpoint that the doctors will push this regiment of this treatment to an early stage for a variety of reasons.

What we have seen with our studies is that MicroPulse does not cause any damage and it allows for repeatable action and it does not present the doctor from doing further procedures as the glaucoma progresses.

So we don’t have that same issue that we have in retinal where your argument – you’re selling the doctor why to use MicroPulse versus doing the injections and there is patient benefits as you described but there is income issues, it’s not the same in glaucoma..

Okay. So in glaucoma, just let’s say on glaucoma, quickly, is the patented process in other words they would have to come back or retreatment overtime, a friend that’s had glaucoma for ten years now and is on the drug.

So is there a repetitive procedure and disposable usage in this process? Your process, our process?.

In my opinion, at this point in time and in talking with a few doctors, as the process – as the MicroPulse procedure is used and the patient’s ability to have improved outflow, decreases, they will do it again.

Once they reach a point where the timeframe of having to do that over and over again is too short, they will move to a more advanced type of treatment.

So the idea for us is sure, patients comes in, presents themselves, they might have a MicroPulse treatment for glaucoma two or three times before they get to a different laser treatment for trabecular mesh network..

Okay. So you did work with the National Health Program in – I remember with the MicroPulse system.

Is this a procedure since that would save them money that could go through the – what this national programs relate and that’s by a procedure?.

I’ll let Jim answer that since he is of British decent..

I just have always one more question..

I will answer it, I’m not going to speak from any position of authority because – but I would answer it this way which is within the national health system, we do have – it’s one of our best markets for our existing glaucoma probe and I will suggest its two reasons.

One is because within the UK they do mandate single use and so that does mean our existing product is only used one time.

The other thing is I don’t think it gets back to other points down about economics which is even though the G-probe is very late stage proposition, they do recognize the economics of trying to deliver a cost effective treatment to a vast majority of patient.

So based on that and based where we’re going, I think you’re right, this could be something that is compelling to healthcare systems that look at that economic trade-off. So yes, we would like to try and take it there to see if we can’t get similar success to G-porbe..

Okay.

And that’s the time table that’s reasonable – whether normal procedure you have experienced and it would be MicroPulse in Great Britain, is the something that takes six months or a year for qualification?.

I think we’re going to really focus on the U.S. in the initial stages because we feel there is a lot of opportunity here when we just need to continue to push what we have in front of us so probably towards the back end of next year before we start to look at the overseas market..

Use of cash is my last question. Do you see the use of cash for other than stock repurchase..

I think this gets back to what Will alluded to at the end, now we sort of move through a lot of these internal projects.

I think we find we’re getting a little bit more mind share and so I think to rephrase your question you’re saying we’re looking to do [ph] and I would say as a lot of this stops to become more executional, I think we’ve got more bandwidth to get back on that and that would be our desire that was a question that came in earlier about leveraging the sales force with that two product so with everyone to get back on that.

[Technical Difficulty]. That people that do not have MicroPulse compete with us on price but as Jim noted in his comments, we’re beginning to get to that point where we can create the price up because the doctors are seeing the benefit of MicroPulse.

So that is getting separation in pricing and differentiation in outcomes between our product and the other legacy continuous lasers. When we talk about glaucoma, we’re back to a point that deals with MicroPulse, this new laser we’re talking about will be one by itself, we’ll be the only ones talking about MicroPulse in glaucoma.

We have not licensed it to other people, it’s just us and so there will be some of that missionary selling going on for a while but that is, there is no competition there.

We do have competition in the area of MicroPulse and the trabecular mesh network with a slip gain [ph] which there is a product called SOT made by a couple of people that competes with our MLT but other than that we’re home free on that as far as competition goes in glaucoma..

That’s very clear, thank you for the answer and thanks to the whole team for another solid progress quarter..

Thank you..

Thank you..

Thank you. At this time I’ll turn the floor back to management for closing comments..

Alright, I want to thank everybody for attending. It’s our pleasure to be able to present the results and we look forward to providing more information on our glaucoma offering as it becomes available. And hopefully we’ll deliver the fourth quarter that everybody is satisfied with. Thank you very much..

This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation..