SecProbe.io

Mail Stop 6010

 July 28, 2006

Hojabr Alimi
Chief Executive Officer and President
Oculus Innovative Sciences, Inc.
1129 N. McDowell Blvd.
Petaluma, California 94954

Re: Oculus Innovative Sciences, Inc.
 Registration Statement on Form S-1
 Filed July 3, 2006
 File No. 333-135584

Dear Mr. Alimi:

We have reviewed your registration stat ement and have the following comments.
Where indicated, we think you should revise  your document in response to these
comments.  If you disagree, we will consider your explanation as to why our comment is
inapplicable or a revision is unnecessary.  Pl ease be as detailed as necessary in your
explanation.  In some of our comments, we may ask you to provide us with information
so we may better understand your disclosure.  After reviewing this information, we may
raise additional comments.

Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure  requirements and to  enhance the overall
disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our comments or on any other aspect of our review.  Feel free to call us at the telephone numbers listed at the end of this letter.

General

1. Please confirm that any preliminary prosp ectus you circulate will include all non-
Rule 430A information.  This includes the price range and related information
based on a bona fide  estimate of the public offering w ithin that range.  Also, in the
next amendment, please fill in the blanks  throughout the filing, and note that we
may have additional comments after you do so.

2. Please provide us with copies of any gra phics or artwork that  you intend to use in
your prospectus.  We may have further co mment after reviewing those materials.

Hojabr Alimi
Oculus Innovative Sciences, Inc.
July 28, 2006 Page 2
3. We note that on your website you referen ce distribution of your products in Iran,
Sudan, and Syria, countries identified by the U.S. State Department as state
sponsors of terrorism, and subject to U.S. economic sanctions.  Please describe for
us the extent and nature of your past, cu rrent, and anticipated contacts with those
countries, whether through subsidiaries, dist ributors, affiliates or  other direct or
indirect arrangements.  Discuss sales or other contacts with the governments of these countries, including government-own ed or controlled entities, and private
parties.  Please also describe any po tential or actual military uses of your
products, other than wound care.

4. Discuss for us the materiality to you of your contacts with Iran, Sudan, and Syria,
individually and in the aggr egate, and whether those cont acts, individually or in
the aggregate, constitute a material investment risk for your security holders.
Please address materiality in quantitative terms, including the dollar amounts of
any associated assets and liabilities, and revenues.  Please also address materiality
in terms of qualitative fact ors that a reasonable investor would deem important in
making an investment decision, including the potential impact of corporate
activities upon a company’s re putation and share value.
 We note, for example, that Arizona and Louisiana have adopted legislation that
requires their state retirement systems to  prepare reports rega rding state pension
fund assets invested in, and/or permits divestment of state pension fund assets
from, companies that do business with  U.S.-designated state sponsors of
terrorism.  The Pennsylvania legislature has adopted a resolution directing its
Legislative Budget and Finance Committee to report annually to the General
Assembly regarding state funds invested in  companies that have  ties to terrorist-
sponsoring countries.  The Missouri Invest ment Trust has established an equity
fund for the investment of certain state-he ld monies that screens out stocks of
companies that do business with U.S.-des ignated state sponsor s of terrorism.
Illinois, Maine, New Jersey and Ore gon have adopted legislation requiring
reporting of interests in, or divestment  from, companies that do business with
Sudan, and similar legislation has been pr oposed by several other states.  Finally,
Harvard University, Yale University, Stan ford University, and other educational
institutions have adopted policies prohi biting investment in, and/or requiring
divestment from, companies that do bus iness with Sudan.  Your materiality
analysis should address the potential imp act of the investor sentiment evidenced
by such actions directed toward companies that operate in Iran, Sudan, and Syria.

Hojabr Alimi
Oculus Innovative Sciences, Inc.
July 28, 2006 Page 3
Prospectus Summary, page 1

Oculus Innovative Sciences, Inc., page 1

5. Please clarify your disclosure in the final two paragraphs of this section so that
potential investors can more readily identify the products  you are currently
marketing, those for which you are seeking or plan to seek regulatory approval,
and the geographic markets for each.  Cons ider presenting this information in
bullet point or tabular format.

6. Please tell us whether all of the sources of  the data cited in the prospectus have
consented to your use of their data an d whether any reports were prepared
specifically for your use.

7. Please revise the “Principal Risks” s ubsection of your summary to present the
information disclosed using bullet points, subcaptions or another more readable format.

The Offering, page 4

8. Please expand your disclosure to address the treatment of shares reserved for
future grants under your 2006 stock incentive plan.

Summary Consolidated Fi nancial Data, page 5

9. Please revise the table in footnote (1) on page 5 and footnote (1) on page 30 to
remove the caption which currently shows the totals of the stock-based compensation expense amounts presented in the individual inco me statement line
items.  We refer you to Section I.C.2 of the 12/1/05 Current Accounting and
Disclosures Issues in the Division of Co rporation Finance, which can be accessed
at http://www.sec.gov/divisi ons/corpfin/acctdis120105.pdf
.

Risk Factors, page 7

10. If true, please add a risk factor that addresses the fact th at your Articles of
Incorporation will authorize the issu ance of 100,000,000 shares of common stock
and 5,000,000 shares of preferred stock, that authorized but unissued shares may
be issued without further shareholder approval and that these shares may be
granted rights and preferences  that are greater than t hose of common shares being
offered pursuant to this prospectus.

Hojabr Alimi
Oculus Innovative Sciences, Inc.
July 28, 2006 Page 4
We may incur significant li abilities . . ., page 9

11. Please disclose whether you are aware of th e Mexican Ministry of Health’s intent
to pursue claims against you.  Also disclose the statute of limitations, if any, that would limit the MOH’s ability to bring claims in the future.

12. Please revise the MD&A to discuss your relationship with MOH.  We note the
first and last sentences of this risk factor.

We are in a dispute with the licensor …, page 12

13. Please disclose the material amount of your revenues from the patent license.  Also, clarify whether the loss of the pa tent licenses may affect sales of your
products outside of Japan.  In addition, file the agreement as an exhibit.

Capitalization, page 25

14. Please revise to remove the caption rela ting to cash and cash equivalents from
your presentation of capitalization.

Management’s Discussion and Analysis . . ., page 31

15. We note your discussion of the need to perform clinical trials on your Microcyn
platform technology and your disclosure on pa ge 3 that clinical  trials will be
“lengthy and expensive.”  We furthe r note your reference on page 18 to
development of a compound with potentia l applications in oncology.  Provide
more details of the specific plans to  pursue commercialization of the your
products and product candidates, quantify the estimated costs and discuss the expected funding/ financing sources. You should also discuss the expected timing
of these events.

Discontinued Operations, page 33

16. Please file as exhibits the agreements with Quimica Pasteur.

Comparison of Years Ended March 31, 2006 and March 31, 2005, page 36

Cost of Revenues, pages 36 and 38

17. Please revise to discuss the specific r easons for the significant gross loss each
period and your plans and efforts to generate gross profit from your products and services. In addition, discuss the expected impact to Oculus Innovative Sciences if
you are not able to do this.

Hojabr Alimi
Oculus Innovative Sciences, Inc.
July 28, 2006 Page 5

Liquidity and Capital Resources, page 39

18. Please tell us how you will account for the warrants issued in connection with the Loan and Security Agreement entered into in June 2006.

Business, page 44

19. Please file the consents required by Rule  436 for the physician clinical studies
summarized in your prospectus.

Overview, page 44

20. Please revise the first paragraph here a nd in the summary to clarify that you do
not have the necessary regulatory approva ls to market Microcyn in the United
States as a drug.

Our Products – Microcyn Platform, page 49

21. Please clarify how each of the products listed in the table differ.  We note, for
example, the varying indications for “Dermacyn Wound Care” in the United
States, European Union and Canada.  Are these different products?  Also, please reconcile your product indicat ion descriptions here with  your disclosure on page
3, which implies that the United States  and European Union versions of
Dermacyn are identical to one another and to Microyn60 in Mexico.

22. Please explain technical terms, such as “stasis ulcers.”

Clinical Trials and Physician Studies, page 51

Completed Trials and Studies, page 51

23. Please specify which of the studies you sponsored and disclose the details of your
sponsorship, quantifying the extent of your sponsorship if possible.

24. Revise your disclosure to identify Dr. Luca Dalla Paola as a member of your
business and medical advisory board.

25. Tell us how you selected the physician c linical studies to highlight in your
prospectus and provide us with details regarding the seven additional studies not summarized in the prospectus.

Hojabr Alimi
Oculus Innovative Sciences, Inc.
July 28, 2006 Page 6
Sales and Marketing, page 54

26. Please file all material agreements re quired by Item 601(b) of Regulation S-K,
including any material di stribution agreement.

27. Please revise the last paragraph of this section to specify th e regulatory approvals
needed and disclose the steps you have taken to receive those approvals.

Other Market Opportunities, page 55

28. Please disclose the amount of material revenues from each of the other market
opportunities, such as the percentage of revenues from veterinary medicine.

29. Please expand the second paragraph on page 55 to identify the leading manufacturer.  Also, file th e agreement as an exhibit.

30. Please expand the third full paragraph on page 56 to specify the regulatory
approvals needed.

Research and Development, page 56

31. Please expand your disclosure to explain what your “L3 anti-viral compound” is
and to provide details of the referenced pr eclinical studies.   Please reconcile your
development of this compound with your statement in the first sentence of this section regarding the goals of your re search and development program.

Intellectual Property, page 57

32. Please clarify the signifi cance of having (i) filed pr ovisional, as opposed to non-
provisional, patent applications and (ii) received a no tice of allowance from the
U.S. Patent and Trademark Office.

Foreign Regulation, page 65

33. Please disclose in greater detail the gove rnment regulatory approval processes for
those jurisdictions in which you manufact ure, market or sell your products,
including, for example, Mexico.

Executive Officers, Key Employees and Directors, page 67

34. Please discuss the business experience during the past five years of Mr. Alimi.

Hojabr Alimi
Oculus Innovative Sciences, Inc.
July 28, 2006 Page 7
Employment, Severance and Change of Control Arrangements, page 74

35. Please tell us how you will account for the additional options that will be granted upon completion of the offering discussed on page 74.

Equity Compensation Plans, page 75

36. Please summarize the material terms of your 2006 Stock Incentive Plan.

Physician Advisors, page 79

37. Please clarify how you compensate your  clinical investigational board.

38. Please clarify the role of the business and medical advisory board and the clinical
investigational board by in cluding specific information regarding their activities
for your company.

39. Please tell us whether the physicians disclo sed in this section have consented to
the description of their role with you.

Related Party Transactions, page 81

40. Please disclose the payments to date to White Moon Medical.

41. Please clarify why all options held by your directors will vest upon completion of
this offering.  For example, was this a term of their original option agreements or
plan?

Change in Independent Registered  Public Accounting Firm, page 93

42. Please revise to provide all disclosure s required by Item 304 of Regulation S-K
and the Exhibit 16 letter from PricewaterhouseCoopers.

Financial Statements, page F-1

43. Please update the financial statements as required by Rule 3-12 of Regulation S-
X.

44. Include updated accountants’ consents with all amendments to the filing.

Hojabr Alimi
Oculus Innovative Sciences, Inc.
July 28, 2006 Page 8
Consolidated Statements of Cash Flows, page F-7

45. We note that the effect of exchange rates on cash of $144, $(127), and $(14) for
fiscal 2006, 2005 and 2004, respectively, are the same as the foreign currency translations on your consolidated statements of stockholders’ equity (deficit).
Please tell us whether you prepared the statement of cash flows for your foreign
operations using the exchange rates in e ffect at the time of the cash flows in
accordance with paragraph 25 of SF AS 95.  Revise as necessary.

Note 3 – Summary of Significant Accounting Policies, page F-8

Accounts Receivable, page F-10

46. Please clarify the nature of the govern ment charge-backs and how these are
recorded in your financial statements.

Note 8 – Accrued Expenses and Other Current Liabilities, page F-19

47. Please tell us the nature of the accrual for stock option rescission.

Note 9 – Long-Term Debt, page F-19

48. We note that you allocated a portion of the proceeds from your debt financings to
warrants.  Please revise to disclose the significant assumptions used to value the
warrants.

Note 12 – Stockholders’ Equity, page F-24

Valuation of Common Stock, page F-27

49. Provide us with an itemized chronologi cal schedule detailing each issuance of
your preferred shares, ordinary shares, st ock options and warrants during the last
12 months.  Include the following information for each issuance or grant date:

a. Number of shares issued or issuable in the grant
b. Purchase price or exercise price per share
c. Any restriction or vesting terms
d. Management’s fair value per share estimate
e. How management determined the fair value estimate
f. Identity of the recipient a nd relationship to the company
g. Nature and terms of any concurrent  transactions with the recipient
h. Amount of any recorded compensation element and accounting literature relied upon

Hojabr Alimi
Oculus Innovative Sciences, Inc.
July 28, 2006 Page 9

In the analysis requested a bove, highlight any transacti ons with unrelated parties
believed by management to be particularly  evident of an objective fair value per
share determination.  Progressively bri dge management’s fair value per share
determinations to the current estimated IPO price per share, identifying all material po