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Superconductor Technologies Inc. (NASDAQ:SCON)

Q3 2013 Earnings Call

November 12, 2013 11:00 a.m. ET

Executives

Cathy Mattison - LHA, IR

Jeff Quiram - President, Chief Executive Officer, Board Member

Bill Buchanan - Senior Vice President, Chief Financial Officer

Analysts

Jon Hickman - Ladenburg Thalmann

James Collins - Van Clemens

Operator

Good day, ladies and gentleman, thank you for standing by. Welcome to the STI Third Quarter 2013 Conference Call. [Operator Instructions] This conference is being recorded today, November 12, 2013.

I would now like to turn the conference over to Cathy Mattison of LHA. Please go ahead.

Cathy Mattison

Thank you, Daniel. Good morning, everyone, and thank you for joining us for STI's third quarter conference call. By now you should have received a copy of the press release. If you have not, please feel free to contact LHA at (415) 433-3777, and we will get that out to you right away. With us from management today are Jeff Quiram, President and Chief Executive Officer; and Bill Buchanan, Chief Financial Officer.

I will review the Safe Harbor provisions of this conference call and then I will turn the call over to Jeff. Various comments regarding management's beliefs, expectations and plans for the future are forward-looking statements and are made in reliance upon the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of future performance and are subject to various risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results may differ from those expressed in the forward-looking statements, and those differences could be material. Forward-looking statements can be affected by many other factors, including those described in the Risk Factors and the MD&A sections of STI's 2012 annual report on Form 10-K. These documents are available online at STI's website, www.suptech.com, or through the SEC website, www.sec.gov. Forward-looking statements are based on information presently available to senior management and STI has not assumed any duty to update any forward-looking statements.

And now, I would like to turn the call over to Jeff.

Jeff Quiram

Thank you, Cathy, and thank you all for joining us today. I will provide an update on our Conductus Wire program and then Bill will review the financials.

During the third quarter we continued to execute on our plan to commercialize our Conductus superconducting wire. We shipped Conductus wire against purchase orders from industry-leading, multinational companies, completing one purchase order and increasing our order backlog. Our drive towards commercialization in 2014 is on track and we have begun taking delivery of various components of our commercial scale Conductus wire production machine.

During the third quarter we raised the necessary capital to execute on our business plan, which is to exit the second quarter of 2014 with the production capacity necessary to achieve positive cash flow from operations in the second half of 2014.

Now I will begin by reviewing our customer activities. Since our last call in August, we have shipped Conductus wire against four stage two purchase orders. Two during the third quarter and two more in the current quarter. As you may recall, stage one testing is when customers evaluate short lengths of Conductus wire to determine if it meets their required technical performance parameter. Stage two customers are modeling their superconducting device performance using our wire and will perform technical evaluations with the goal of optimizing the device format [ph].

In the case of a superconducting fault current limiter, our customers will focus on the performance of our wire through multiple quenching [ph] cycle. In motors and magnets the focus is on how our wire performs in the presence of a high-magnetic field. All the wire being shipped against purchase orders is for stage two qualification testing in the full range of target applications. Including superconducting fault current limiters, superconducting magnets, motors and generators. In addition we continue to see significant demand from new stage one customers as they begin the process of evaluating Conductus wire.

Our plan is to establish a commercial relationship with one or more of our current stage two customers since the next step after completing the qualification testing is to order sufficient wire to bring the device to market. While we have not yet received complete feedback from our stage two customer, we expect to receive several final performance reports soon. We look forward to working with our customers to make Conductus wire the standardized solution for their products. As a result of continued strong market demand for Conductus wire, our customer backlog continues to grow as fast as we can ship product. We expect our current customer commitments to consume all the wire we can produce for at least the next three months.

Now I will give a wire production update. During the third quarter we shipped longer lengths of wire up to tens of meters. We continue to meet and exceed performance requirements for all of our current purchase orders and we remain committed to attaining even higher performance levels in the future. Our pilot machine is fully operational and performing its intended objective of producing wire for customer qualification testing. As we have discussed in the past, wire production and kilometer lengths is necessary to achieve our target economies of scale. As stated earlier, we are beginning to take delivery of various components for our 1-kilometer RCE machine. We expect to have this machine assembled in the first quarter of 2014, putting us on track to exit the second quarter with significant production capacity.

We continue to execute on our plan to achieve positive cash flow from operations in the second half of 2014. In summary, we are pleased with the progress we have made with our customers and technology. We remain very excited about the superconducting wire market and the ever increasing demand for Conductus wire. Our go-to-market strategy includes engaging with large industrial companies and leading utilities at premier industry events like EUCAS and EPRI, which STI exhibited at in September and October respectively. The attendance at these events was impressive and well funded programs to commercialize superconducting devices continue to move forward even as new programs continue to emerge.

We met with industry leaders who are interested in using HTS wire for high-field magnet applications at 30 to 40 degrees Kelvin. HTS wire offers exciting new possibilities for MRI machines already in the market, and also for new solutions still in research by improving wire performance while saving on cooling cost. All the tier one customers have multiple applications including motors, generators and grid devices. These customers are looking for a reliable supplier of wire to allow them to bring their products to market. We along with our customers believe that superconducting wire will serve a key role in the drive to modernize power distribution, transmission and generation methods.

Conductus superconducting wire is uniquely positioned to address three key areas of opportunity in the market. High performance, improved economics and commercial scale capacity. By executing on our Conductus wire program, our plan is to become a meaningful supplier of superconducting wire to meet the current and future market demands. Now I will turn the call over to Bill for a review of the financials. Bill?

Bill Buchanan

Thank you, Jeff. During the developmental stage of our HTS wire program we have continued to sell our wireless products. In the third quarter we have again recorded revenue from our Conductus wire, however the amount is not yet material and our 2012 and 2013 revenue was primarily from wireless products. Our third quarter revenue was $229,000 compared to $1.3 million in the year ago quarter. The commercial gross margins from sales of our wireless products were slightly negative in the third quarter compared to positive in the year ago quarter due to our fixed wireless manufacturing costs.

Total R&D expenses including contract and other R&D expenses amounted to $1.9 million compared to $1.3 million in the 2012 third quarter. About $200,000 of this increase is from our increased HTS wire efforts and the remainder is from a onetime obsolete equipment impairment expense. SG&A expenses were $1.4 million compared to $1.2 million in the year ago quarter. This quarter we recognized an expense of $85,000 for the fair value adjustment of some of our warrants issued in August. This amount will fluctuate quarterly based on several factors including our stock price.

Net loss for the third quarter was $3.5 million or a loss of $0.42 per share, compared to a net loss of $2.3 million or a loss of $0.69 per share in the prior year quarter. The total number of common shares outstanding at September 28, 2013 was 11.6 million shares. For the first nine months of 2013, total net revenues were $1.6 million versus $2.3 million in the same period last year. The net loss was $8.3 million or $1.48 per share compared to a net loss of $8.7 million or $2.71 per share in the prior year.

On to the balance sheet. For the first three quarters of 2013, $6.3 million was used to fund our cash loss and $300,000 was provided by changes in our working capital. We ended the third quarter with $10.3 million in cash and cash equivalents and working capital totaled $9 million. As previously announced, on August 9 we received net proceeds of $10.9 million from our registered direct offering of our common stock and warrants. Based on our current forecast, we expect our existing cash resources will be sufficient to fund our planned operations through at least the second quarter of 2014.

At the end of the third quarter 2013, accounts receivable was $127,000. Current and non-current liabilities totaled $6.6 million at September 28, 2013 and included $4.2 million for the fair-value treatment of our warrants. Before we begin the Q&A session, I wanted to note, we are hosting our annual meeting of shareholders on December 5 at our advanced manufacturing center of excellence facility in Austin, Texas. If you are currently a shareholder, you should have already received your proxy information and please vote your shares.

And now, operator, please open the call for questions.

Question-and-Answer Session

Operator

(Operator Instructions) And our first question is from Jon Hickman from Ladenburg Thalmann. Please go ahead.

Jon Hickman - Ladenburg Thalmann

So one question I think everybody wants to know is, what's the longest length that you have actually produced on your product machine?

Jeff Quiram

I think we have -- I will just have to say, this is to the best of my knowledge, John, I am not sure, but I think it's in the 30 to 40 meter range. It is the longest continuous piece that we have built to date.

Jon Hickman - Ladenburg Thalmann

Okay. And when you say your production will be used for the next three months or you will be able to sell everything you can make. Is that again just -- typically you are doing this, you are doing the production for testing purposes and then you just sell the wire that comes off, that meets the various specs from those customers. Is that how you are doing it?

Jeff Quiram

That’s correct. And again, so many of the applications that are in the middle of the stage two evaluation are for fault current limiters and other devices that require shorter lengths. So in most instances their testing length is in the one to two meter range. That’s the sort of length they are going to need going forward.

Jon Hickman - Ladenburg Thalmann

Okay. So has anybody asked you, like I want to see that you can actually produce something longer or they just are happy with testing the shorter lengths right now?

Jeff Quiram

Well, the folks that or course are interested in us producing longer lengths are those that are going to need significantly longer lengths for their devices. So people that are doing large magnets, people that are doing MRI machines, transmission cable, large motors and generators. Those are all scenarios where they need 500 to 600 meters up to a kilometer of continuous length and so those folks of course are very very focused and very interested in our ability to do longer lengths. Many of the stage two customers today however are doing their grid device applications. They don’t require kilometer lengths.

So I think that the parameter they are interested in is really going to be wire availability. And as we have stated, we need to longer lengths off of the 1 kilometer machine in order to get the sort of throughput that we need to meet the demand. So their interest is more around what's our capacity going to be rather than us demonstrating the ability to do it in really long length.

Jon Hickman - Ladenburg Thalmann

Okay. But that my question is, before someone places an order, are they going to want to see that you can actually do a kilometer?

Jeff Quiram

For the folks that are doing assessing in grid devices, I would say the answer to that is no. I would say the answer to that is no for even some of the folks that are ultimately going to need longer lengths because they recognize the fact that they are going to need to do some work with our wire in the interim before we can give over them [ph] the 600 kilometers they need for instance for 1 kilometer or 1 mile transmission cable. Or the 300 kilometers they will need for a 10-megawatt wind turbine. I think you are going to see some orders for wire that they will just be using in preparation.

But ultimately, yes, those big applications require those long lines and before you get the really meaningful order from like a transmission cable provider, you probably need to demonstrate the ability to do some of those longer lengths.

Jon Hickman - Ladenburg Thalmann

So do you still feel like the near term opportunity is with your, the fault current limiter type.

Jeff Quiram

You know I think we have stated -- I think we have been pretty consistent over the past three quarters or so, or four quarters, that that is really the market that we think is the most attractive one as we look at what we are going to do with our 2014 production. But long-term I think the others will come to the fore and will all consumer a lot more wire than the fault current limiter application. But in the 2014-2015 timeframe, we think that that’s going to be a very meaningful application for us.

Jon Hickman - Ladenburg Thalmann

Okay. One last question. Are you having any discussions with people that might be willing be help you build out even more production to meet their demand.

Jeff Quiram

Yes. We have had conversations with several parties that are really interested in taking it to the next level and accelerate the ramp of capacity, to really go after some of those applications sooner rather than later. I would say those discussions are at various points. But, yes, there are definitely parties that are interested in working to us to see if there is things we can do to accelerate the ramp. Again, a lot of that would occur -- by definition has to occur after we bring that first machine up. Because until that first kilometer machine is doing what we need it to do, you are really uncertain whether you want to duplicate yet multiple times. And so I think that’s the -- there is a point where we will make the evaluation that, yes, this machine is the one we want to duplicate and then I think you can start executing on some of the discussions for adding another two systems, four systems, six systems, and how quickly you do that.

Again, those are all interesting conversations to have. They all have significant implications for how you would finance them and cash that would be consumed putting that capital in place. And those are all discussions that we are having. But that’s more forward-looking view, that’s a late 2014-2015 view, probably, versus what we are executing on right now.

Jon Hickman - Ladenburg Thalmann

So this is kind of like waiting for Christmas? I mean, really excited here. Okay.

Jeff Quiram

Yes. I have not heard it described as waiting for Christmas, Jon, but I know my kids are excited for that. We definitely are looking forward to the couple of presents under the tree and we look forward to opening a few of them.

Operator

(Operator Instructions) Our next question is from Jim Collins with Van Clemens. Please go ahead.

James Collins - Van Clemens

Again, not to beat a dead horse, but are we ever going to make a 100-meter run on the 100-meter machine or are we just going to stay in the 30,40,50. And then we are building the second machine well, how do we know the second machine is going to work if we can't get 100 meters on the first machine? Like those things exist in my head?

Jeff Quiram

Well, I mean, and we have talked about this a couple of times, Jim, it does come down to the -- what we tend -- because in most instances the wire that we are shipping to fulfill orders, nobody is asking for a 70 meter piece of wire, for instance. So the thing that we are doing is, so we continue to take advantage of run we do on this machine to try to understand how it's operating. And we have increased the length of wire that we are doing but we haven't really felt, there has been no compelling reason right now to put that continuous length on there. And there is no reason to not do it other than it's more efficient and we can get more out of it by doing the shorter lengths right now. And so that’s where we are focusing on.

The thing that you need to look at when you do these runs, it’s all about what's the consistency of the film deposition across the zone. And it really doesn’t matter, if you are getting the same film structure, the same performance on wire in the various spots that were encrusted in, that’s the data we need. That’s the data that we use to determine whether this machine is operating properly. We don’t really need to do it on a long piece of wire to draw that conclusion. So I am not sure -- maybe I am not making -- if I am not making sense on that or to some particular aspect of that, do you want me to dig into a little bit more? Let me know what it is?

James Collins - Van Clemens

Okay. Simply then, would it make more sense to make 100 meters and then cut it in three parts and then you have three 33 meter units that you can sell rather than make three runs to make the 30 meters each.

Jeff Quiram

But I guess the point is, there is more wire in every wire, more template mounted in the machine on every run than there is in one continuous piece. Because the thing that we are doing too is, we are trying to -- we take the opportunity to also -- we are trying to improve the performance. We are trying to improve the -- for all of these different applications, they all have different technical aspects that they are looking for from the wire. And so we change the template a little bit. We are trying to deal with a technical requirements that customer B have. Well, if we think there is a better chance of meeting customer B's needs by putting a 10 meter piece of template with slightly different characteristics in it, while also putting template that will meet the needs of customer A at the same time in the same run, that what's we are doing.

So we are testing two things. You are very focused on making sure that the deposition is consistent across the entire zone, but we are also taking the opportunity to try to dial-in the performance for a particular customer needs. I mean the nasty [ph] issue right now is, we are doing all these tier two customers but none of them, none of the needs of all those customers are 100% exactly the same.

James Collins - Van Clemens

Okay.

Jeff Quiram

So customer A wants a slightly different recipe than customer B, that wants a slightly different recipe than customer C. Now as we go forward and once you have chosen, and once we are standardized with one of those customers and that customer is going to be the one consuming all of the wire that comes out of a particular run, well, then, yes, why not go to a longer length and use the template recipe that we know gives these guys exactly what they want and focus on that. But, again, ultimately we know that we can get by with putting in shorter lengths right now because, frankly, nobody needs more than a couple of meters anyway. Well, I shouldn’t say couple of meters, 3, 5 meters some people want. But, again, we can produce that wire for them without assigning a whole run to just a particular recipe.

James Collins - Van Clemens

So it's not necessary to make a whole run to prove that you have to work on a whole kilometer on the next machine?

Jeff Quiram

Well, we don’t need to do a whole continuous run of wire on that machine to know that the deposition of the material across the deposition zone is consistent. We can test that. And so we have done enough work on that machine to satisfy ourselves that we don’t have a significant problem in getting the material equally distributed across the zone. And again, that’s a very significant point. I mean it's not a -- when you are looking at having a consistent amount of material in that chamber, you are using multiple sources. You are evaporating those metal from multiple sources and the way you design the flume and the way you do the -- the way you etch those metals to get them to boil off. The way you do that, that determines the design of the flume and that determines whether you have consistent dispersion throughout the entire zone. We are doing a lot of work on that to make that -- so that dispersion is consistent and, frankly, at this point we are very happy with that.

James Collins - Van Clemens

So therefore by doing that you are, what, 99% confident that you can do a whole meter or a kilometer on the second machine that you are building, the new machine.

Jeff Quiram

Well, yes. But the thing that might happen on that machine, Jim, if the customers that we have, let's say we have two customers. We have customer A and customer B and they are both superconducting fault current limiter customers, each of which needs small lengths of wire. I would say on that kilometer machine you might have instances where we have two different of pieces of wire.

James Collins - Van Clemens

Okay.

Jeff Quiram

Two different template recipes because we are trying to build 300 total meters for customer A and 400 total meters for customer B. So now the only time even in that kilometer machine that you will have a full continuous length of wire will be if it's only for one customer or if it's for a customer that really needs like a 500 meter, or 600 meter, or a kilometer piece of wire. So the customer needs are really what will determine what you are loading the machine I guess is what it comes down to.

James Collins - Van Clemens

Okay. All right. So I guess then there is no plan and it's not necessary to do a full 100 meters. I guess that’s the thing that I want to reassure myself? No, on the 100-meter machine. It works and you can stop at 30 or 40 meters and never need or want to go to a full 100 meters.

Jeff Quiram

Yes, I think the only time that we probably will go that route, Jim, is if we are doing a run and we know it's only for one customer. Or we are trying to prove thing, or we are doing it for a customer that needs a very long length. Needs a 50 meter, 60 meter, 100 meter length...

James Collins - Van Clemens

I guess that now. I guess my final question would be on the, or maybe some anecdotal information on what the competition has shown us. We are going to several conferences. And in terms of their capacity and maybe any big orders. I still can't find anything on the Korean order that the American Superconductor again is allegedly delivering to and with the largest order still never gotten by anybody. Is there any anecdotal information on any of these companies? Whether it's Furukawa, SuperPower or American. What have we run into?

Jeff Quiram

Well, I mean, we get a little bit more exposure to some of the customers at the conferences than you see from what's talked about in earnings report or things of that nature. I would say that we are hearing that we are seeing wireless delivered to the various customers, from various sources. I would say that, I believe that American Superconductor is shipping wire to their Korean customer. They don’t report it. They didn’t report it in this last earnings call but I am pretty sure that they are just from what we have heard and what people are talking about in the conferences.

I know that SuperPower and others continue to ship wire for various applications. I know that there is customers that think they have very very significant needs. We just talked with a customer recently that finished a large project in Europe this summer and believe that there demand in the 2014-2015 are going to be monstrous. Several times what the industry can produce today. So I am not seeing anything that brings into question the sort of numbers that we have talked about. Again, we were approached not long ago from a company that wanted to build a huge magnet, needed a thousand kilometers of wire. And they are talking to us because they can't get 1000 kilometers from anybody and of course they won't be able to get it from us for a while either.

So anecdotally I can just say, Jim, that the requests continue pace. I haven't seen any indication that the interest in the wire is less. I haven't heard anybody saying that the other folks participating in the space aren't shipping any wire. There is comment that nobody is shipping them enough wire. But other than that I would say the reports that we are getting is that the wire shipments continue.

Operator

(Operator Instructions) Our next question is from William Leb [ph]. Please go ahead.

Unidentified Participant

I would like to pursue a couple of things. One, when are saying a couple of presents under the Christmas tree, those probably would be related to the fault meters, correct? If that comes to fruition.

Jeff Quiram

Well, again, as we have stated a lot our stage two customers' evaluations are in the fault current limiter space. So, yes, I would say at least few of those presents are from those sorts of applications.

Unidentified Participant

Okay. So the two people, let's just assume there's two people. Have they gone through enough testing that they say, yes, it works and now we just got to sit down and work it out? I mean are they at the position where they would put it in their fault meter? They have done enough testing that they would say, we are ready to go shortly. I mean are they convinced that this works and that they would be willing to do it from the testing?

Jeff Quiram

Yes. As we stated that stage two evaluation is really where they are modeling their product using our wire to determine whether it will do what they want it do. But we haven't received the final reports on those sorts of activities yet, but we do expect to shortly. And so...

Unidentified Participant

But they give you oral [ph] indications, don’t they?

Jeff Quiram

Yes. I think that’s why we haven't received the final report. But we talk with these guys, it's not like we just ship them wire and then [indiscernible] for a quarter. I mean we talk to them once a week, once every couple of weeks. And so all indications are that the wire is performing the way they expect it. Again, each customer does testing a little bit different than the other, primarily because what they are looking for and the wire performance characteristics are slightly different. So they all do things a little bit differently. In many instances you will have a conversation and will answering questions or talking about issues and they are trying to get to the bottom of something, some wire performance issue, without really telling us exactly what they are doing. I mean we don’t know everything about what their test mechanism is and how they are testing it. And again, I think that’s because many of those -- they view it as proprietary. I think they view that if they told us too much about how they were testing, we would know what they were doing.

So it's a cooperative process where we are trying to give them the information they need to make a decision. But, yes, nobody has come to us and said, yes, we are done testing your wire because it's not doing what we need it to do.

Unidentified Participant

No, but I am saying they were done testing because it does do what we need it to do. We are ready you know.

Jeff Quiram

Goes through a battery of tests. So it's a pretty detailed exercise that these guys go through. Which is why it takes the time it does. And I think you just step through it, right. And, okay, you pass test number one, now we are on test number two. Okay, you passed test number two, you are test number three. We are not really going to even talk about test six until we get there. Because they go at it in a pretty, well-planned linear process on how they evaluate all the stuff. And we are just there to work with them periodically to answer questions. And this is one of the reasons that you see a lot of the wire, a lot of the orders aren't necessarily shipped complete because when they will get to stage four they'd say, no, we would really to look at it a little bit different. Hey, could you put a little bit of different cap layer on it, could you do something also to the wire to let us look at it that way. You see that. And that’s why we make sure that we are trying to be as responsive as we can to these customers as they are going through their process.

Unidentified Participant

Okay. Now you say that once they tested, now they want to make sure you can produce it. Does the two customers that you are talking to and their indications of interest, would they suck up the whole machine or could you accommodate both of them?

Jeff Quiram

Well, that will very much depend on what are those individual customers', what their plans are and what they want to do? So...

Unidentified Participant

But you have an idea of what they are talking about, don’t you, when you talk to each of them? How much...

Jeff Quiram

Yes, we have an idea on what they think that the market demand is and what they think they will be using in the 2014-2015 timeframe. But those things -- those have ranges. And so what we don’t know is when customer 2 decides to go. Are they going to place an order that basically says, okay, our business plan is that we are going to execute on everything we think we are going to do and so therefore we are going to lockup all of your supply, or are they going to order enough for 10 devices for instance, and then wait and see. Because if the first customer orders ten devices, well then you have room for customer B. If customer A comes and orders 750 kilometers of wire, well then you don’t have room for customer B until 2015.

Unidentified Participant

Jeff, you and I have chatted about that second machine and that we should be planning, even though we may not order it or getting the long lead items. Is there any items you are placing for a second machine that have a long lead? Did you ever look into that or where you are at on that even though you...?

Jeff Quiram

We have looked into it. I will say that we not placed any orders for those long lead-time items yet, Bill, but we are looking at it. I mean it's a balancing act for us between -- I mean we are still being very, very cautious on what we spend in our cash. We recognize that we still got a few quarters in front of us where we need to get to the point where we can produce wire. And so we are being cautious. I don’t think we are being short sighted but we are being cautious. So we definitely have looked at that. I think we understand what the implications are. We haven't gone forward and pulled the trigger to spend those moneys yet and I don’t know that we will for the next couple of months. But it's really a function more of just making sure that we are being very good stewards of the valuable cash we have in our hands right now.

Unidentified Participant

Okay. Can you elaborate a little more on the strategic partnerships you are talking about? They are strategic without having any problem [ph] with your competitor customers. I mean what are you talking about? What kind of relationship like you say they may be willing to finance additional expansion? Can you give us kind of a little better idea what you are talking about?

Jeff Quiram

Well, I don’t know how much more detail I want to go into. All I will say is, there have been people that believe they have a lot more potential demand for wire then we are going to be able to fulfill in the next two years. And they are interested in looking at alternatives to figure out ways to shore up what we could produce to give them what they need. And of course the situation that we are in, it's not going to be a built it and hope they come sort of scenario.

Unidentified Participant

Right. If you want it, you finance it for us. We will produce it for you but you put up the money, right?

Jeff Quiram

Yes. We will put up some money or do some sort of structure, or do some sort of arrangement. Whether it be -- again, whatever structure they could take that that will allow us to get the capital, if not from that entity from somebody else and do it in a way that makes sense for us. When I say us, I mean STI and our shareholders. So those are the discussions that we are having. I don’t think I want to get into any more -- there is a lot of moving parts there, I don’t think I want to prejudge any of it right now, Bill, to get into any more depth than that.

Unidentified Participant

Okay. All right. I couldn’t see real well on the press release, Bill, what is your receivables at September 30?

Bill Buchanan

$127,000, I believe in the wireless products.

Unidentified Participant

Okay. I looked at the wrong side. Okay, fine. But you guys are pretty confident that your cash will last you for the next -- through June 30, right?

Bill Buchanan

Yes, we are.

Operator

And we have a follow up question from James Collins. Please go ahead.

James Collins - Van Clemens

I guess I have one final request. Why not make a 100 meter run just for the heck of it, to shut everybody up. And in the announcement that you have made a 100 meter run, I am sure the stock would go up.

Jeff Quiram

Yes, we will look at that, Jim. We should probably talk about it. I would have to say, I don’t know, the only guy who might shut up is you.

James Collins - Van Clemens

Well, I think Hickman was kind of implying the same thing, wasn’t he?

Jeff Quiram

Who was?

James Collins - Van Clemens

Jon Hickman.

Jeff Quiram

He might have, I don’t know. I guess I didn’t detect that. But you definitely have been the one that has been a little bit more focused on that. We will look at it, Jim. And...

James Collins - Van Clemens

Okay. That would be terrific. And you could probably throw [ph] away 60 meters and you may give the 30 meters to the other guy that wants the 30 meter with a particular specification.

Jeff Quiram

Yes. We will take a look at it. And I certainly -- if there is significant concern amongst our investor base that wants to see that addressed, we will look at it. What I want to make sure we don’t do those, is kind of get that activity in the way of continuing to get these tests...

James Collins - Van Clemens

Is it that expensive to make a run like that?

Jeff Quiram

Yes. If you think you are going to end up throwing stuff away, yes, it is expensive.

James Collins - Van Clemens

Okay. What I mean if you could just throw 60% of it away and still sell the other.

Jeff Quiram

Yes. Exactly. So, we will take a look at it, Jim.

Operator

Jeff, there are no further questions at this time, please continue with any closing remarks you may have.

Jeff Quiram

Very good. Thank you all very much for joining us today. As Bill noted, we are hosting our annual meeting on December 5 in Austin. We also plan to present at two investor events in December. The LD Micro "Main Event" in Los Angeles and Benchmark's Micro Cap Discovery Conference in Chicago. We hope to see some of you at these events and look forward to speaking with you again on our next call. Good day.

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