Resonant's (RESN) CEO Terry Lingren on Q4 2015 Results - Earnings Call Transcript

| About: Resonant (RESN)

Resonant, Inc. (NASDAQ:RESN)

Q4 2015 Earnings Conference Call

March 23, 2016, 16:30 ET

Executives

Ina McGuinness - IR

Terry Lingren - CEO

John Philpott - Chief Financial Officer

George Holmes - President & Chief Commercial Officer

Analysts

Cody Acree - Drexel Hamilton

Lou Basenese - Disruptive Technology Research

Jeff Enquist - Silverado Capital

Operator

Welcome to the Resonant Inc. Fourth Quarter Financial Results Conference call. [Operator Instructions]. As a reminder, this conference is being recorded.

I would now like to turn the conference to your host, Ms. Ina McGuinness. Thank you, Ina. You may begin.

Ina McGuinness

Thank you, Operator. Earlier this afternoon, Resonant released financial results for the year-ended December 31, 2015. The release is available on the Investor Relations section of company’s website at www.resonant.com. Additionally some of the information on the news release and on this conference call contains forward-looking statements that involve risk, uncertainties and assumptions that are difficult to predict. Words of expression reflecting optimism, satisfaction with current prospects as well as words such as believe, intend, expect, plan and anticipate and similar variations identify forward-looking statements but their absence does not mean that the statement is not forward-looking.

Such forward-looking statements are not a guarantee of performance and the company’s actual results could differ materially from those contained in such statements. Several factors that could cause or contribute to such differences are described in detail in Resonant’s most Form 10-K and 10-Q and subsequent filings with the SEC. These forward-looking statements speak only as of the date of this release and the company undertakes no obligation to publically update any forward-looking statements or supply new information regarding the circumstances after the date of this release and call.

Resonant's CEO, Terry Lingren is your host today and [indiscernible]. I will turn the call back to Terry.

Terry Lingren

Thank you, Ina. I would like to welcome everyone to our fourth quarter 2015 financial results and company update call. Joining me today are George Holmes, our President and Chief Commercial Officer and John Philpott, our Chief Financial Officer.

To start off, I want to welcome George to his first investor call with Resonant. For over 30 years George has provided executive management and sales and marketing experience to a diverse set of emerging growth technology companies, software, semiconductors, networking equipment and consumer electronics devices. We're pleased and fortunate to have some of George's caliber and acumen joining our senior management team and believe his skill set and industry experience will be instrumental in capitalizing on customer engagements and ramping revenues.

He won't be making any prepared statements on this call, will be available for the Q&A session. We have also continued to expand our technical team. As of today we have 18 members of our technical staff including eight PhD's covering our engineering, physics, algorithms and complex filter design. We've been able to attract key technical talent from some of the industry's lead companies to join Resonant. Without let me move on to business up date. Today I'm going to talk about our new customer engagements as well as our ongoing technology developments. Through these discussions I hope to illustrate our belief that we will be able to deliver designs for difficult bands and complex customer requirements that are about half the unit manufacturing car and roughly half the engineering development of traditional approaches. For those of you are new to our story, we have recently signed two memorandums of understanding or MoUs with two of our target customers. These agreements are significant because they include both up front and milestone payments which validate our customer's commitment prior to signing a license agreement. This is highly unusual in this industry and we believe speaks to the unique value we offer due to the strength of our team and our growing suite of design tools which we collectively call Infinite Synthesized Networks or ISN.

It also bodes well for advancing two formal royalty arrangements with both of these customers. Let me take each of these in turn. The first agreement signed in February is an expansion of the one we put in place last March with a tier one customers. The revisions covered updates to the specifications for the original duplex we had under development and also added a second duplex design or design for new band. Of great significance is that both are non-temperature compensated or non-TC-SAW designs for two traditionally BAW only bands. This customer has existing marketing channels and a large customer base by delivering non-TC designs for traditionally BAW bands we're providing our customer with significant cost and performance advantages. The next step will be to enter into a license agreement before mass production.

The second development agreement signed in early March is with a new customer. We're designing solid duplexers for three separate bands different from those of the first agreement. It also includes up front and milestone payments, this customer has excellent process capability, is growing in this sector and has a customer base that is complimentary to the first customer. We believe that these designs will help accelerate this customers' growth. These five duplexer projects now in development are a mix of demanding difficult bands as well as more straightforward designs. The designs for the traditionally BAW bands illustrate the value we bring to our customers. By realizing them in non-TC-SAW we believe we will allow our customers to market products with BAW performance at approximately half the unit cost. The expectation is that this will have a huge positive impact to their margins.

In addition, we believe the accuracy of our simulations will allow us to achieve the required performance for any of these designs even the more straightforward ones in roughly half the development time. We believe this will be a huge advantage for our customers in a market driven by very tight time to market constraints. Looking ahead, another key driver of complexity in mobile front end is carrier aggregation or CA, mobile devices today must be capable of receiving from two to with many as five bands simultaneously. Experts estimate that there will be 140 worldwide combinations of CA cases by 2017 which will greatly increase the complexity and cost of the RF front-end. Duplexers must only reject a single band. However in the case of a quadplexer the simplest realization of these new CA requirements there are four different frequency bands within each device. Not only must the signal loss be minimized there are now three bands often in close proximity that must meet the demanding rejection requirements of 4G. Today these are very difficult designs and there aren't many companies that can meet the requirements. Therefore these products command very high prices.

We believe our tools and technology allows us to meet these requirements with SAW based designs. In fact we already have simulations showing very good performance for quadplexers on many key metrics. As a result we’re seeing increased interest from potential customers.

Turning to our reconfigurable, or tunable filter project. I believe this remains a tremendous opportunity for us. Over the past quarter our advanced development team has produced initial parts for a filter that reconfigures or tunes between two bands while not a fully optimized design. This prototype demonstrates the feasibility of Resonant's unique design approach to tuneability in the front end. We also continue the development of a filter that is reconfigurable between three bands, through our advanced development efforts we continue to invest in these projects understanding that our current priorities are those engagements and opportunities that have the potential to deliver near term revenue.

Now I would like to turn the call over to John to discuss the financials.

John Philpott

Thank you, Terry. I'm now going to summarize our 2015 year-end financial results compared to our 2014 year-end financial results unless otherwise stated. Research and development expenses for a few 2015 totaled approximately $3.6 million compared with $2.5 million for 2014. This increase from last year was due to the higher costs associated with increase in our head count and the associated increased activity in our various duplexer design projects. General and administrative expense for 2015 totaled approximately $4.1 million compared with $2.3 million in 2014. This increases is associated again with our increase in headcount, stock based compensation expense and legal costs associated with our securities litigation. Our operating loss in 2015 totaled $9.7 million compared with $6.1 million in 2014. The increase is primarily due to R&D costs associated with our greater number of projects as well as higher G&A expenses that were consistent with expected growth and cost of being a public company.

On a non-GAAP basis adjusted EBITDA for 2015 which excludes non-cash charges for stock based compensation and depreciation amortization was a loss of $7.6 million or a $1.06 per fully diluted share, this compares with a non-GAAP adjusted EBITDA loss for 2014 of $4.8 million or $1.06 per fully diluted share also. The net loss on a GAAP basis for 2015 compared to 2014 remain relatively flat at $9.7 million each. The diluted net loss per share in 2015 was a $1.36 was based 7.2 million shares outstanding. The diluted net loss per share in 2014 was $2.16 and was based on 4.5 million shares outstanding.

Our cash and investments at December 31, 2015 totaled $ 5.5 million compared with 13.8 million at December 31, 2014. We believe we have sufficient cash to support planned operations through the second quarter of 2016 and we expect to provide an update on our financing activities in the coming weeks.

I will now turn the conference over to the operator for any questions.

Question-and-Answer Session

Operator

[Operator Instructions]. And our first question comes from the line of Cody Acree from Drexel Hamilton. Please proceed with your question.

Cody Acree

Maybe Terry if we can start there and just talk about maybe any further color that you can give so the first MoU the expansion of foundry relationship, you haven't talked much yet about who the second MoU is with, maybe you can give us a little bit of color as far as where they stand in the food chain and how that agreement might be similar or different from the first agreement?

Terry Lingren

Sure. As you know Cody we always love to give color around our customers so a lot of confidentiality, we’re certainly on the [indiscernible] but the industry as a whole has a high degree of confidentiality. That said the second customer is a filter [indiscernible] branded product and as I mentioned in my remarks we've all been impressed with their process, these are the first designs we’re putting through this fab and they are growing their channels. We believe these products add to - they certainly add to their product roadmap and hopefully will contribute to their growth in the market.

Cody Acree

So the second customer is also a filter fab would you characterize it as larger, smaller than first engagement?

Terry Lingren

It is smaller. The first one that is tier one supplier, the second one is a smaller supplier but growing but they do have many years of experience doing [indiscernible] design. They're not a new entrant.

Cody Acree

And Terry I guess can you talk about the process to revenue from here with those MoUs not the upfront payments but the progression toward actual licensing. Is it a matter of those foundries having direct relationships to the handset customers or would it be necessary to go out and find an intermediary front end module customer that would then would get you into a handset that would get you into the hands of the customers?

Terry Lingren

Both customers have various customers of their own. Typically I don’t comment too much on their customers but both have an existing customer base. And both have slots at existing OEMs. The path to revenue, so the next step is to complete these designs we may go through a few iterations maybe few as one and maybe as many as three and four and then we'll go into a qualification and ramp cycle. As I’ve mentioned on prior calls that could be anywhere from 60 to a 180 days, varied by customer, varied by their customer and varied by their past experience and their own internal process. And then after that they would begin ramping of course they are delivering samples to their customers all during this process and trying to win design slots so that by the time they reach the end of qualification they hopefully already have some design wins under their belt.

Cody Acree

And I guess as you look at that process and you know your deliverables I guess can you give us any sense of when you expect to be able to deliver on these five projects and then maybe talk about, do you expect to have a licensing agreement at that time before, after and then just what are your thoughts longer term on when this might turn into a licensing revenue stream?

Terry Lingren

Sure. The license agreement itself I kind of described the process between the initial engagement with the customer and getting in the mass production, the license agreement really happened any time between the initial agreement and ramping in the mass production. It's often the customers preferences to win - they want to get the license agreement in place. I won't say too much about these two specific customers and their preferences but give you kind of that window as to when the license agreement would take place. We do expect that they will probably the next major milestone in these developments.

As far as getting these into production, we’re not giving revenue guidance, it's still pretty early in our cycle but I think it's - wouldn’t be unusual to have revenues before the end of this year from many or perhaps even all of these.

Cody Acree

Even with the design time to get into a handset knowing that you would have to get a socket that handset would have to get into the market to get volume do you think that’s still feasible to be a 2015 event?

Terry Lingren

I do and I said kind of [indiscernible] and it wouldn’t be unusual to see the revenues this year. What this really gets back to is our ability to design products quickly and we’re seeing that more and more and I might just elaborate a little bit on that. We have been talking most ourselves internally quite a bit on the process that we follow in developing these products and it boils down to kind of free steps and it's obviously very simplified. The first is that we have - we do synthesize these solutions. So we follow the process of network synthesis which is very disciplined but it's really not used in this industry. What that means is that we come up with millions even billions of potential solutions to the set of requirements we’re trying to achieve

Everyone else in the industry as far as I know uses what's called acoustic ladder [ph], they use that one solution. So this gives us the potential to find solution, that’s why we can say we can achieve BAW performance from SAW designs, we find better solutions. The second step is that we put these solutions into circuit models. For engineers with someone with an engineering background on the phone, these capacitors and [indiscernible] very simple elements. It allows us to very quickly go through this huge haystack of possible solutions and find the best ones. Then we go to the third step which are the simulations and we use fundamental simulations meaning that we use fundamental physical properties, materials, line width, density so kind of things again which is not done which is in this industry to our knowledge and so it allow us to get very accurate simulations. What that means is that we take fewer turns through the fab to reach the desired performance. We believe on the order of half the number of turns for given design.

Cody Acree

And then just two, one for George, one for John. George I know you’ve only been there just a short while but I guess what is your case I guess what are your plans and what are you digging into first as your priorities?

George Holmes

Let me touch on one quick thing before we jump into that just to augment what Terry said. I mean you made a comment as a follow-up to Terry's comment that there is a potential for us to see revenue this year. And it you know will it be feasible for us to see design wins in two sockets at that point in time. I think one of the things to keep in mind is not every design that we're working on is for a new socket. Some of them are for replacement sockets. So our partners actually work and supply products to their customers that they're going after sockets that already exist. So that's where that opportunity exists for us. So there is albeit something that we have to execute upon. There is an opportunity for us to see that kind of revenue this year.

Coming back to the question you asked me what am I working on? Clearly focus on customers, capitalizing on previous experience, customers that we have been working with in the past, all of the major handset OEM's clearly are folks that I have got great relationships with and have a keen focus, are going to be spending a lot of time working with those folks as well as everybody else within the food chain. You know very keen focus on customers, expanding the customer base, then also making sure from a messaging standpoint that I'm working with the team here and making sure we have a very balanced and very process oriented communication strategy and those are kind of the two key things I think I'm going to be working on here over the course of the next six months.

Cody Acree

And John lastly, OpEx given the balance sheet, can you just talk about what your spending plans are for the next few months and was there any - has there been any change I guess really during the first quarter that we have been able to make some maybe some conservation of capital?

John Philpott

Yes I think our spending has been pretty consistent even with the addition of George and a couple other folks that we've added to the company in this quarter. The thing that fluctuates a little bit in some of the legal bills that relates to securities [ph] litigation but that’s winding down. So we have been really consistent around this $2.3 million number and certainly have a little more flexibility as we go in the second quarter here and so I feel pretty comfortable where we’re at.

Operator

Our next question comes from the line of Lou Basenese from Disruptive Technology Research. Please proceed with your question.

Lou Basenese

Just a couple of follow-up to some of the things Cody was asking about. You mentioned for the MoU number one that customer that there was some updates to the specifications. I think originally the timing there for that agreement was to be done by the end of this quarter, Q1? Can you just give us any color on how those changes to the specs have may pushed back the timing or if that's the customer you’re talking about that might only require one more turn?

Terry Lingren

Yes that is the customer that we were talking about. The updates were - the original design was for 3G specs and around the end of the year beginning of this year, us and the customer began looking at the 3G market size and it's declining volumes versus 4G market size and its rapid ramp and decided to update the specs, update the design and meet 4G specs. So that’s what I meant by the update for the specifications.

Lou Basenese

Okay. And then just any color on what's the average turn time now that you're working directly with fabs or making these things a priority?

Terry Lingren

They can't move quicker. It's one of their high priority items; we still estimate about two turns per quarter.

Lou Basenese

And then just it sounds like from your continued comments over the quarter's that the tools, your design skills and capabilities are getting much more advanced. Is there are any bands that you can't design for top, I'm thinking some of the more complex BAW bands that you couldn't previously design before with SAW or TC-SAW that you can now?

Terry Lingren

Yes. We've been looking at that very hard and we think the answer is that there aren't any of the traditional BAW bands that we can't be meet certainly with TC-SAW and maybe with non-TC-SAW. We have spent quite a bit of time recently looking at this. The process has improved quite a bit. The accuracy of our simulations, I mentioned fundamental model and we've really developed those two and working with these fundamental models gives a very accurate simulations. So we can go back and back it kind of cycle through our design from these very accurate models back into quick optimizations and get a design pretty quickly that we know is close to what's required and hence we can reach the final required performance and fewer bad turns.

Lou Basenese

Okay. And just last question - can you provide any information on some of the other opportunities that you have in the pipeline. I know you're busy with the current customers that you have under MoU but I recall from previous calls that there was a lot of interest - if you could just give us some idea of how many other opportunities are out there ones that might be in the near term potential?

Terry Lingren

Yes. First of all I will start off by saying we continue to see increasing interest from potential customers. Ever since the publication of our white paper about nine months ago this interest has continued to grow. The product area I'm really excited about are some of these requirements for carrier aggregation, quadplexers. These are very difficult designs and the more we look into and the more we find that other providers of these parts are having some difficulties achieving the desired performance, hence they tend to command high prices in the marketplace. But they are required, the carriers are requiring phones certainly starting with the higher tier phones by working its way down even in the low tier phones to support carrier aggregation. You know they want to be able to use two bands, maybe even three bands or more on at the same time. It gives them a lot of flexibility around use of their spectrum. So these products, the people who can meet these requirements are seeing very high margins and it's ideally suited to both our tools which I've talked about at some length there as well as the team. We have been able to get some premier filter designers in the industry, folks who are very well known amongst their peers on our team and lots of these people have year's, decades of experience, designing multiplexers, albeit for different things, satellites or base stations but they can apply those many years of experience to these front end problems these are not new problems to solve for them. So between the team and their tools I'm very excited about seeing traction in some of these quadplexers or maybe even hexaplexer type solutions.

John Philpott

Our existing customers also have an interest in continue products down the road to in their product roadmaps.

George Holmes

Just to add on to what John was saying, that was exactly the point I was going to make. As you know the hardest thing or may not know, the hardest thing to ever do is get the first customer. These guys have broken the code on that this quarter and that is absolutely the toughest thing to ever do and once you're in under the covers, it's being able to go expand those customers and take them from 2, 4, 6, 8 different sockets to 10s of sockets within their different product portfolio. It's going to be kind of the lowest hanging fruit for us, an area that we're going to spend a lot of time and focus on to go make sure we happen but as Terry also points out the key thing for us to build a business is to have a broad footprint and to make sure we have a good cross-section of the customer base as our customers and so that's one of the key areas that we’re focused on. So as we go through and analyze the market, look where there is high value opportunities from a product opportunity perspective and how we're going to spend our engineering resources, we’re going to be very, very focused on adding to the customer mix those customers that have access to those devices that we can go capitalize on quickly and then expand the footprint in each and every one of those customers to their cost of sales will be lower.

Lou Basenese

Okay. And I was just looking maybe for some more specifics, I know last call we talked about there was two potential opportunities that were mature enough that you had confidence and may come to fruition and that's in fact what you guys did. Just to know is there one in the next three or six months that you're confident you could cause 2, 3 I mean any willingness to comment on that?

Terry Lingren

We’re always talking with various customers and I wouldn’t want to give much color around those. We’re glad to have George on board, he is really ramping up the effort in this area of developing both our forward looking product road-map as well as the broadening the funnel for the number of customers we talked to.

Operator

[Operator Instructions]. Our next question comes from the line of Jeff Enquist from Silverado Capital. Please proceed with your question.

Jeff Enquist

Based on your own commentary, it sounds like you guys only have enough cash balance to get through since next quarter, so I was wondering what your plans were to raise additional capital if you can get customer financing or if you’re just planning on doing a dilutive equity offering or what?

Terry Lingren

Well as I mentioned we will give update in the next few weeks or next several weeks. But all those are options talking to existing current investors, strategic investors, new investors. They are all on the table for us and we continue to be active on doing that.

Operator

Our next question is a follow-up from Cody Acree of Drexel Hamilton. Please proceed with your question.

Cody Acree

Can you give any color as to the level of the upfront payments?

Terry Lingren

We don’t disclose the specifics of these deals, each deal is different and is very dependent upon the customer, the products, long term potential, all of those. That said, you know these are not going to be large enough to extend our run-way. So you will see the results of some of these initial payments in the Q1 financials and so this will be able to gauge the size of those at least within an order of magnitude at that point but they are not large. What they do do is show our customers commitment, they validate their willingness to work with us and we know they are going to be there at the end of the project also.

Cody Acree

And then lastly, maybe Terry when we were doing some of the initial discussions, and the initial work sounded like you were working with SAW but maybe needed to adjust some of your designs just to - the early design specifically maybe the Skyworks design to TC-SAW, it sounds like a lot of the work now has been centered around SAW specifically. Has something changed in the sense that maybe you've expanded your capability around SAW or am I reading more into that?

Terry Lingren

No things have changed. It's basically a natural outgrowth of maturation of our team and our processes. You know we're getting the point where our tools are better. Our team has grown, we've got more experience on the team and they have now worked on many different designs and so we have a lot more tricks in the bag if you will for improving the performance to the point now as I've said a number of times on the call for this first customer we're doing straight non-TC-SAW duplexers for where there were traditionally BAW bands.

Cody Acree

So [indiscernible] help you with the question here I mean isn't it in the large part also. The commitment of the customer actually helps to that process as well and in fact we've got two committee customers and that collaboration makes our job easier.

Terry Lingren

Sure. I mean working on specs, I mean the specs only gets tougher these days, 4G is tougher but the growth of our tools and the knowledge of the team. I think you’ve gotten to the point where we're more confident going into these that we can use non-TC to solve most of these problems. We may still use a temperature compensated SAW from time to time depending on the requirements, there are still some very bands out there but we're seeing more and more where we can use non-TC-SAW for many of these designs, most of these designs.

Cody Acree

Well I guess one of the reasons that I went kind of down that route is with the heavy pricing volatility in the filter market as you in areas where you might have needed to move up to a TC-SAW base, the delta in some bands, the pricing Delta might have shrunk to a point that there would be a little less room for your royalty payments but it sounds like by moving back into SAW that's open that GAAP. Can you just talk about the pricing in the market and how much room there is for you to save customers money there?

Terry Lingren

Sure. There are always tremendous price pressures in this business and I ran phones within the phone business for 20 years prior to starting Resonant. So I understand that intimately. Obviously non-TC-SAW has a much better cost basis, much lower cost basis and either TC-SAW or especially BAW, that we try to create these designs to get our customers the best advantages they can in a market we obviously want them to win too. Our goal is to give them as much as advantage as we can. I'm not sure I'm hitting the answer correctly.

John Philpott

Well I think it depends on band by band too Cody, so band by band that cost as you know varies but especially these products that go from the BAW all the way down to SAW. There is certainly a much larger advantage and opportunity for royalty there versus some of our more discreet where we’re just doing a SAW improvement to an existing SAW, those costs are much lower and our royalty will reflect that accordingly.

Operator

Our next question comes from the line of [indiscernible]. Please proceed with your question.

Unidentified Analyst

But really just on a high level and trying to envision the year ahead, this is a year-end call and just here we’re March 2016 where we’re going to be in March 2017 with respect to customers, products, IT, OEM partners. Just any other color that you can share that I might have missed in the first few minutes on the expectations for the year ahead and kind of just an overall macro vision where you are taking Resonant over the next 12 months?

Terry Lingren

Sure. I'm going to play on the comment that George made earlier, I'm not sure if you're on the line yet but he said the first win is probably the toughest and it gets that question out of the way of what phones you’re in, what products have you done, from this point we see expanding our relationship with both of these customers as well as bringing new customers into the fold and starting to see how we play into their road maps. I don’t - my comment, I'm excited too about some of the new products coming into the market like quadplexers but it doesn't mean that we will bypass some of the existing opportunities even existing replacement slots and phones that are around now.

Unidentified Analyst

And so as we’re modeling this and we’re thinking of the various different products. It's pennies and nickels and dimes across 10s to 100s of millions of units across multiple products in addition to some of the first five-ish that you're working on?

Terry Lingren

Yes I mean the volumes are just gigantic and still growing on the order of 20% - 21% CAGR per year, the market size. I think that there were over 25 billion, I don't have the exact number for 2015, pushing 30 billion last year and it continues to grow by on the order of 20% per year. So the market volumes are growing tremendously.

George Holmes

And especially on multiplexers, that is just a new marketplace that is really coming on this year on filter world, last year - so the upside there is just really going to be great.

Terry Lingren

The other part of the multiplexers is like quadplexers is kind of two duplexers joined together if you will, a much more difficult design and what my simple description says are seeing very fast rising volumes but they are much more difficult design and hence command much higher margins in the marketplace. We believe they are ideally suited to what we do here at present. I would expect by - and an answer to your original question by the time next year when you see us very well engaged in quadplexers designs.

Unidentified Analyst

And these more difficult designs tend to have bigger margin for us or bigger royalty rates for us?

Terry Lingren

Correct, right. I mean our royalty rates kind of scale with the margin that we enable for our customers.

Unidentified Analyst

And any other talents just on overall meaningful IP developments in this near future? Are we actively filing more patents and protecting more intellectual property that we're developing.

Terry Lingren

Yes. We absolutely are. That number is growing. I don’t think we've given a number in a while but that number is growing daily. We have a very active patent portfolio program, Bob Hammond, our CTO has a long history with the IP development, IP protection, I’ve probably told the story in the past but Bob is one of the few people I have ever known who has taken a patent assertion all the way through a jury trial and won everything. So he knows that whole process intimately and looks at building a patent portfolio from a very different perspective than everyone else in the world. He's teaching some of the IP lawyers that we're dealing with how to build a good patent portfolio.

Unidentified Analyst

It's defensible and you can--

Terry Lingren

Yes very defensible. On the technology development, we have some exciting things that are coming out of the team kind of offshoots from these solutions that we're developing for the more mainline products we’re working on now both the duplexers, the quadplexers we’re starting to get some early insight into as well as the reconfigurable things we're looking at. There are some interesting, advanced technology developments and I will just I will leave at that. We’re putting patents around them, they may have very unique applications in front end.

Operator

There are no further questions in queue at this time and I would like to turn the conference back over to Terry for any closing remarks.

Terry Lingren

Thank you, Operator. In closing I would like to emphasize that we continue to drive our business towards the goal of delivering designs for these difficult bands and complex customer requirements that are about half the manufacturing unit cost and in roughly half the engineering development time of traditional approaches. We continue to add quality new hires to the team. Our ISN development platform continues to expand providing capability to do ever more complex designs more accurately and efficiently including solid duplexers for BAW bands and these quadplexers for the growing needs of carrier aggregation. We believe the dramatic progress has led to the success we've seen with the two most recent agreements. Through this continued we expect to expand these relationships and add new customers and new products before the end of the year.

Thank you all.

Operator

Ladies and gentlemen this does conclude today's teleconference. We thank you for your time and participation. You may disconnect your lines at this time and have a wonderful rest of your day.

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