ParkerVision, Inc. Q2 2008 Earnings Call Transcript

Sep.16.08 | About: ParkerVision, Inc. (PRKR)

ParkerVision, Inc. (NASDAQ:PRKR)

Q2 2008 Earnings Call

August 11, 2008 4:30 pm ET

Executives

Paul G. Henning - Cameron Associates, Vice President

Cynthia L. Poehlman - Chief Financial Officer

Jeffrey L. Parker - Chairman and Chief Executive Officer

Analysts

James Whitten - Laidlaw

Philip Anderson - Pinnacle Fund

John Pietek

Joseph Graves - Private Investor

Operator

Welcome to the ParkerVision second quarter conference call. (Operator Instructions) At this time, for opening remarks and introductions, I’d like to turn the call over to Paul Henning.

Paul G. Henning

Before we get started, I want to remind the listeners that this conference call will have certain forward-looking statements which involve known and unknown risks and uncertainties of our business or our businesses and the economy and other factors that may cause actual results to differ materially from our expected achievements and anticipated results. Included in this respect are the visibility to maintain technology advantages in the marketplace to achieve timely market introduction and acceptance of our products, maintain product company protection, and the availability of capital among others. Given these uncertainties and other factors about our business, listeners are cautioned not to place undue reliance on any forward-looking statements contained within this conference call. Additional information concerning these and other risk factors can be found in our filings with the SEC.

We will begin today’s call with Cindy Poehlman, CFO, who will review the financials, and then Jeff Parker, who will report on the company’s business activities.

Cynthia L. Poehlman

Thank you Paul and thank you to those of you joining us on the quarterly update call this afternoon. As usual, I will spend just a few minutes on the financials, and then I will turn things over to Jeff Parker for an update on our business activity. We reported this afternoon a $0.22 per share net loss for the second quarter of 2008 compared to an $0.18 per share loss for the same period in 2007. Year-to-date, our net loss is up from last year by $0.04 per share to $0.41. The increase is a result of increased research and development expenses as well as an increase in non-cash stock-based compensation expense.

Our research and development expenses increased about $1.4 million from 2007 to 2008 as we increased resources both outside design services and to a lesser degree internal personnel focused on the implementation of our technology and production ready ICs. This work includes the implementation in silicon of the digital portion of our technology, which controls our RF transmit IC as well as the development work related to the implementation of our D2D technology into an RF receiver IC. These designs, which we own will be utilized by our existing customers and we believe future customers as well.

In addition to the increases in our R&D resources, we also saw a company-wide increase in stock-based compensation expense of approximately $0.5 million on a year-to-date basis. This non-cash increase is a result of the expense attributed to both 2007 and 2008 employee equity awards. We ended the second quarter with 14.8 million in cash, which represents a $4 million use of cash for that quarter. Our cash balance and year-to-date cost of operations are tracking along right in line with our expectations thus far.

Many of you have begun asking whether the company will need to secure additional financing through equity or other means to fund our operations beyond 2008. Over the next few months, we will be evaluating our cash needs, taking into consideration a number of factors, including our future cash inflow expectations with regard to both existing and prospective customers. From that analysis, we will determine any action necessary to ensure the company’s balance sheet remains strong and continues to support our initial growth. You should expect an update from us on this topic at our next quarterly call. I’m happy to address any questions you have on the financial results at the end of today’s call, but for now I’m going to turn things over to Jeff Parker for an update on business development.

Jeffrey L. Parker

In our last call I focused on three topics. Your feedback indicated that those topics were helpful in tracking our progress, and so today, I’m going to focus on updates to those three areas that we discussed in our last call, namely, number one, the progress on our technology, both from an intellectual property standpoint as well as the development of the hardware itself. Then I will update you on the progress we’re making in customer relationships, both with our existing customers as well as the pursuit of additional customers. And lastly, I’ll touch on our business model and what we see for the future and the creation of shareholder value. So let’s start with the IT and technology development. Since our last quarter update, we were granted an additional six US patents and our IT portfolio has now grown to include 70 US and 55 foreign patents and we have slightly over 100 patents pending. We continue to make advancements to our technology and thus we continue to file additional patents.

In our last call, we mentioned that we were ranked by the Patent Board’s first quarter telecom scorecard at number 10. We are ranked number 17 in the second quarter scorecard and continue to be the smallest company on that scorecard. Our ranking was based on the merits of the 14 patents we were issued during the three-month period for this Patent Board scorecard and compares with the next-smallest patent holder, Sony Ericsson, who was issued 60 patents and ranked 19, and then Verizon, who was issued 111 patents and ranked 14. As with the last scorecard, we continue to score exceptionally high in the area of science strength, which is defined as the measure of a company’s patent portfolio that is linked to its development of core science.

I continue to believe that the significance of our inclusion in these rankings speaks to the relevance of our IP and to the direction our industry is heading. Our commitment to developing and securing IP in this area will prove to have been a good investment, one that takes years of commitment to build and a result that we believe can’t be duplicated easily or quickly. Equally important to building a valuable IP portfolio is our ability to support a customer base by building the physical components that implement our IP and that prove the efficacy of our technology. So now, let’s turn to an update on the progress of hardware development.

On this topic, I am very pleased with our progress this past quarter. Some of the inertia that ParkerVision has had to overcome to gain enthusiasm for our technology has to do with the challenges that have plagued others in bringing new RF components to market. These challenges created a cautious environment for decision makers considering new approaches to RF systems, especially as the industry that these components are used within has grown to such large volumes. Having overcome this inertia will ultimately be seen as one of our strength especially since our hardware doesn’t suffer from the same shortcomings that have been problems for others.

On the topic of product development that we’ve been creating to support our customer, I’m also very pleased to share with you that we recently expanded our senior staff at ParkerVision. We welcome Domingo Figueredo as VP of Engineering. This role was previously held by Greg Rollins, whose name you may have seen on many of our patents, as he serves double duty as our Chief Staff Scientist as well. Domingo’s arrival enables Greg to focus his energies on continued technology advancements and IP creation while Domingo carries forward on product implementations with the strong team that Greg built.

Domingo’s arrival is timely as the potential of our first two customers along with others that we believe will come soon warrants the expertise that he brings and will help us reach our goal of profitability with greater certainty. In his nearly 30-year career, he has been credited for guiding teams through the development and production of RF components that have been fielded in the tens of millions of units each month, including those that are widely deployed in mobile handsets today through some of the world’s largest OEMs. His experience is a real asset in supporting our current and future licensees. A comment that Domingo has made multiple times since joining our firm is that one of the factors he found attractive in coming to ParkerVision is that our innovations have all the makings of truly disruptive technology, and of course all that comes with that; disruptive technology development being an area that Domingo has real career experience with.

So continuing on the topic of our progress in hardware development, we are on track what we shared in our last update to you, for delivery of volume-producible d2p chips in the fourth quarter to our first mobile phone chipset customer. These chips will not only verify that our technology is superior for handset solutions, but provides the multiple benefits that we have spoken about.

Improving efficiency for 3G voice and Internet connectivity and extending battery life would in and of itself be a great achievement. However, this is accomplished with d2p while using common silicon semiconductor in a competitive form factor, which translates into better size and cost. One last mention I want to make about our d2p chips, is that they also represent what I would call a platform technology, meaning that beyond the 3G application they are designed for, these chips can generate a wide variety of RF waveforms without the designers having to start from scratch each and every time a new RF waveform is desired. This kind of flexibility will also help win over the skeptics who have been disappointed so many times by other RF component development shortcomings.

So now, let’s move onto an update regarding customer progress, both with our existing as well as prospective customers. Our engineering team as well as our sales organization continues to be actively engaged with ITT and ITT continues to invest resources in d2p. As I mentioned in our last update, ITT has a d2p development system in their own lab that enables them to generate various RF waveforms for their own customer support. They have identified the first programs to incorporate d2p and they continue to work on those applications. One very nice synergy that I will mention is that there is an excellent alignment between the chips we will be delivering in the fourth quarter for handsets and some of the ITT’s first applications. We remain confident that ITT and ParkerVision can incorporate the benefits of d2p into government and military wireless communications. With regard to our first commercial customer, who is incorporating d2p in the 3G mobile handset chipsets, our confidence continues to grow as we are moving ever closer to volume chips and the potential for what our companies will soon be bringing to the handset market.

Our commercial customer is very pleased that there have been no slips to the schedule, no modification to what we’ve agreed to do together, and our teams are actively working day to day. The benefits of d2p combined with our customers existing tier 1 and tier 2 OEM handset customers should prove to be a powerful combination for growing business for both companies. As I already mentioned, our volume producible chips for their first 3G application is on track for fourth quarter delivery.

One additional comment with regard to our first commercial customer is that we have also launched a development program that incorporates our d2d receiver technology in the 3G mobile handset chipsets. We expect the first volume producible, d2d receiver chips to be delivered to our customer sometime in the second half of 2009. We are very excited that all of our RF transport technology both d2p and d2d will be incorporated in the mobile handset chipsets.

So now, onto the topic of new customer prospects. As I mentioned in our last update, the progress we are making with our first two customers will undoubtedly have a significant positive influence on securing additional customers. With volume producible chips only a short time away, this certainly helps moderate the risk. My confidence in securing additional commercial customers remains high, and as I’ve said before, we believe these next customer wins are when, not if. As I said in our last call, our efforts remain largely focused on those companies who are shipping in volume, typically measured in the millions, if not tens of millions of units per month. And as I have also mentioned before, the attention to detail by those types of firms is quite thorough.

A couple of years ago, we were on the forefront of predicting that consumers would be dissatisfied with 3G talk times. At that time, our predictions often encountered a wait and see response. 3G networks hadn’t been widely deployed then. Today, it has become widely accepted that 3G operation drains the battery much more quickly than 2G and that consumers aren’t satisfied with the reduced battery life. A good example would be the recent reviews of the new 3G iPhone, which has earned stellar reviews on almost every feature, expect one, the battery life when using 3G.

In general, 3G phones have reduced battery life repugnance suggesting, turn off 3G, only use it when absolutely necessary, or even use Wi-Fi instead of 3G whenever possible. Some reviewers have challenged handset OEMs to get 3G operation on par with 2G battery life, a feat that d2p can achieve right now. Having the confidence a few years ago that the complexity of multimode, multiband handsets, and a 3 and 4G battery life would be challenges that the industry would be looking to solve and would require advanced technology approaches were the belief behind the reason we invested and developed in d2p. Just as I was confident in our investment in d2p then, it is my personal goal and belief that we will secure our next OEM agreement before the next scheduled conference call.

And so now, the last topic I want to discuss with you is with regards to our business model. In our last update, we expressed our belief that we could gain adoption that would put us at a market share run rate by the end of next year that’s in the high single-digits, perhaps low double-digits, as measured against the 3G handset markets. That market next year is forecast to be in the 500 million unit range and growing the following two years by another 50% to around 750 million units annually. Based on our continued progress, I continue to stand by that belief. By the way, it’s our belief that our existing commercial customer can account for a mid-to-high single-digit market share run rate for us by the end of next year with growth potential beyond that. For a little longer term, given the strength of our technology, I remain confident that ParkerVision can achieve share of market penetration that will incorporate our technology into a third or greater of the 3G and emerging 4G handset market. And for that goal to be achieved within the next few years, two or three, with continued growth that will give us the opportunity of achieving our vision of becoming a de facto standard in that important space.

Given a reasonable range of royalty expectation and assuming that ParkerVision has 30 million shares of stock outstanding, I believe this will translate into a revenue run rate that will yield annualized earnings of $2 to $3 a share in pre-tax for the company. If we maintain our focus and continue to build upon our customer relationships, this is the foundation for the kind of value we can achieve. I also continue to believe that there will be some helpful upside to our results that will come from our customer relationship with ITT and that can provide some extra momentum to our growth.

So in synopsis, when I think about the assets of ParkerVision and how we are positioned for growing shareholder value, I consider that, number one, we maintain a multiyear course of developing new RF architectures, which takes years to innovate, protect and mature into implementation, that are appropriate for our target market mobile handsets, a task that in my opinion cannot be quickly or easily duplicated. Number two, we built a stable and growing team that has developed this technology and that has built the expertise on the sales and marketing as well as the engineering front to bring volume producible silicon to the market. A team that has now grown to include a VP with the experience in having fielded RF components in the very highest volume used by some of the world’s largest OEMs, a team that is on track for delivering volume producible silicon in just a short time from now for 3G handsets.

Number three, we’ve secured excellent customer relationships with our first two accounts, one incorporating the benefits of d2p technology in the challenging government and military products and the other that is incorporating the benefits of both our d2p and d2d technologies into 3G mobile phones, both accounts already selling volumes of their products to tier 1 firms in their respective fields. Number four, the market trends in the mobile handset space are clearly moving in our favor. Chipset OEMs want to provide complete solutions from the start of the base band all the way to extend to the antenna. They want to use common silicon semiconductors; they’re looking for ways to simplify the complex RF front end while increasing 3 and 4G battery life. Simultaneously achieving all of those desires won’t occur by just tweaking traditional RF architectural approaches. Our volume producible silicon will soon be available for any combination of 2, 2.5, 3, 3.5, and 4G handset applications.

And last but certainly not least, we have had the unwavering support of many of our investor partners who have entrusted to us their financial as well as moral support and whose commitment we don’t take for granted or take lightly. Rest assured that while we believe we are very well positioned with what we’ve achieved up to this point, we are committed and driven to bring in additional accounts soon who will incorporate our technology into mobile phone handsets.

So, I hope you found this update today to be helpful. Our key to success is to stay on course. As you just heard, we have a great deal to be enthusiastic about.

And now, I’d like to open this call for your questions.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Jim Whitten - Laidlaw.

James Whitten - Laidlaw

First question as a novice, a novice in the technology here. As I read about these new phones coming out et cetera, they are talking that in 3G and 4G with potential demand for so many things from not only cell phones but the other ancillary things, that to put it all out would be a total strain or at this time probably almost impossible to put all what people would want. How do we address that particular situation? Two, in your projections on d2p, do you have any projections how much we would bring in from d2d if it’s incorporated? And my last question is when you refer to volume producible very shortly or on the way, what timeframe are you referring to.

Jeffrey L. Parker

3G handsets which are certainly shipping volumes today using traditional linear transmitters and linear power amplifiers are already providing significantly shortened battery life for telephone calls, voice calls, and for data Internet connectivity. So if you read a lot of the reviews on these handsets today, and I think I mentioned some of them, like on the iPhone, certainly the reviewers like a lot of the benefits of the 3G network, but they are complaining about the need to improve the talktime or the battery life for Internet connectivity on these 3G networks. We helped that a lot by making a 3G phone call talktime or Internet connection to look more like 2G times, and even some of the reviewers have said, “Gosh, just get us to 2G and we’d be happy.” So that was good news for us because, from our calculations, that’s pretty much what we can do with our existing implementation and of course, we’ll continue to push forward from there.

4G is even more challenging than 3G because the complexity in the waveform is even greater and makes the battery life even shorter and so it calls out for even more need for advancement. So think of it as the same problems with 3G plus. How much battery life do consumers want? You can never have too much battery life. So anything you can do to help push that higher, people welcome, and especially if you taking them into more common silicon semiconductors which we do, fewer redundant circuits, which we eliminate, and things like that.

In terms of our volume producible silicon, when I say soon I’m referring to the volume producible silicon that we will be delivering in the fourth quarter to our first commercial handset chipset customer, and it has the potential not only to satisfy their application, but additional application s as well, and we will continue to add silicon Jim to that to continue to advance the capabilities of the silicon and that will just be an ongoing product development kind of activity. But again, what’s nice is that in the fourth quarter, we’ll be able to actually show people, “hey, here’s volume producible silicon,” and it will answer a lot of questions that I think some people have about, “can you guys really do what you say you can” and “can you do it in a practical way.” Other people have obviously been willing to make that leap of faith and others will never want to see that.

In terms of d2d and what it adds, we get a meaningful increase in royalty, I don’t want to go into the exact rates, but from our first chipset customer, we get a meaningful increase in royalty when they ship d2p with d2d. And my expectation is that over time we’ll see a blend of both companies who want to use just the d2p and other companies who decide that they want to use both, and of course, we’ll continue to evolve the technology to keep giving people every reason to want to use both of our technologies because they both can do things together that separately people would find more difficult to achieve.

Operator

Your next question comes from Phil Anderson - Pinnacle Fund.

Philip Anderson - Pinnacle Fund

If I heard you clearly, in your prepared remarks you said that the current cellular OEM customer to whom we will begin to flow product in the fourth quarter this year has mid-to-low single-digit market share in 3G now, is that what you said?

Jeffrey L. Parker

What is said is that based on the customers they currently have, which are both tier 1 and tier 2 handset OEMs and the volumes that they are shipping and what I think they’re going to be doing as they continue to move forward that by the end of next year, I believe, they will be able to get up into mid-to-high single digit 3G market penetration.

Philip Anderson - Pinnacle Fund

And the 500 million unit forecast; is that a forecast for the market for 2009 or is that for 2008?

Jeffrey L. Parker

Phil, that’s a good question. I think it’s 2009. I don’t have those charts right in front of me, right now. I think its 2009, but I don’t recall.

Philip Anderson - Pinnacle Fund

Well, whether it’s this year or next year, if it’s 500 million units and say they could get an 8% share that would be 40 million units a year.

Jeffrey L. Parker

Exactly.

Philip Anderson - Pinnacle Fund

Are they shipping their product into which our technology is incorporated to more than one cellular handset OEM?

Jeffrey L. Parker

Yes. We will be included in one or more platforms that they offer their products and therefore; from previous conversations that we’ve had, we’ve mentioned that typically the way this industry works is a handset OEM will source a platform from a chipset company and then they’ll build multiple models of handsets off that platform and so that’s how they end up with multiple handsets and in this case, they also have multiple customers doing multiple handsets from their platforms.

Philip Anderson - Pinnacle Fund

So this platform into which we are incorporated is, I guess, tweaked, if you will, for multiple customers, just to pull some names out, they could be shipping platforms to Nokia, they could be shipping them to Motorola, to Ericsson, to whomever is out there, which is just basically a branded OEM assembler of components around which they make a cell phone?

Jeffrey L. Parker

Right, these are known OEM names that I think pretty much anybody who knows the handset space would recognize those names.

Philip Anderson - Pinnacle Fund

My last question; how much of the first customers 3G handset business do you think we are likely to get?

Jeffrey L. Parker

You know, it will be a ramp, but I can tell you that we can deliver the type of solutions that I believe we can deliver. I think we will get volume, the majority of their business, and if we are fortunate, maybe we will get all of it. I think it just depends on how quickly they ramp, how much they ramp, how quickly they ramp up the inventory that’s already been committed, and we will continue to advance our own chipset; implementations also continue to make it more and more attractive with the goal of being to earn all their business. And I think that they certainly are in the, I think, they certainly have the attitude of giving us an opportunity.

Philip Anderson - Pinnacle Fund

It may be helpful or appreciated if the company were to announce, when it begins to ship the silicon or when the silicon begins to ship in the fourth quarter?

Jeffrey L. Parker

Yes, we will definitely keep the community updated on. I would certainly consider delivering volume producible silicon to be material. We’ll very likely keep everybody updated on that.

Philip Anderson - Pinnacle Fund

And then if you would think about having a conference call when you sign the next cellular handset customer, the way we did when we had the first customer signing, I think, that would also be appreciated.

Operator

Your next question comes from [John Pietek].

John Pietek

Anadigix recently warned about their shipments for the second half of the year saying that they were going to be down, their 3G power amplifiers, were going to be down about 50% for the second half of the year. What do you think of that and does that have anything to do with what you guys are on in the future contracts or what’s your feeling on that?

Jeffrey L. Parker

John, I don’t really know exactly where their contracts come from or where they were expecting to get that 3G business, so it’s hard for me to really say or comment on why their 3G business is down even though the 3G market I think in general continues to grow. In fact, it was just recently by a number of industry analysts who track the market, slightly increased over the earlier year forecast, so I don’t really know. I just can tell you that we’re very excited about our opportunity to start participating in this market and our goal is to take as much of this market as we can possibly take to support our customers to the fullest because it’s been many years in coming to develop the technology that can do what we do, and we want to grab the market share when we have such an opportunity; so I don’t know why Anadigix is maybe losing some market share.

Operator

Your next question comes from Joseph Graves - Private Investor.

Joseph Graves - Private Investor

Could you give us a little bit of your thoughts on the competitive landscapes specifically as it relatives to ParkerVision’s key advantage in being a truly digital process relative to a lot of other solutions in 3 and 4G specifically?

Jeffrey L. Parker

Obviously we still have to transmit in analog waveforms, so there’s some analog in our circuit implementation, but what’s very significant about our approach is that because we don’t create a radio signal early in the process in our circuit; a typical transmitter system creates a small signal radio transmitter signal then it has a bunch of gain stages to make it larger and larger and larger in power until ultimately it leaves the antenna. So, when you make a signal early in the process that’s already a modulated radio carrier, you have to be very careful that you keep and preserve all of the attributes of that signal all the way to leaving the antenna. In our case because of our digital process we don’t make a signal that’s a RF signal that has to be preserved in its linear requirements until the very end of our process; we kind of flip the process around, and that gives us the advantage of being able to run circuits that don’t have to be nearly as carefully produced and handled as a traditional approach and it gives us more efficiency, gives us greater yield.

One of the things, John, I’m very excited about is I believe when our chips are delivered and people start to see how they actually behave in real products and real volume, they are going to find it’s a very different experience than what they have been used to with these kinds of radio circuits, which are pretty… the yields have to be careful nurtured to keep them high and when you glue together, transmitters and power amplifiers that are produced by separate companies using separate semiconductor processes, that’s quite a bit of art to being able to produce that kind of stuff in volumes. So, I think that not only all the things we’ve talked about will be exciting to people, our efficiency, the common silicon semiconductors, but because of the process of how we make the signal using a more digital approach and something, putting the signal out at the very end of our process and that’s the beginning, the yield and therefore the cost and the time to the factory is going to be a lot more exciting to people than what they are producing today, and I think that it will be another big competitive advantage that we will be able to showcase.

Joseph Graves - Private Investor

So, that’s exciting stuff. So, in theory it works better in the real world than in the lab?

Jeffrey L. Parker

Absolutely.

Joseph Graves - Private Investor

And then just from your conservations with the customers, you have to be getting to the point where, “how much could you deliver”. I mean you are talking about some decent numbers here. So, it’s my understanding that this first customer will actually be receiving chips from IBM’s fab right, is that correct?

Jeffrey L. Parker

We will be using IBM’s fab for the first chips, yes.

Joseph Graves - Private Investor

And so negotiating with other customers, are there any capacity constraints at all?

Jeffrey L. Parker

IBM has good capacity in process that we’ve selected, so I think we are in good shape on that right now.

Joseph Graves - Private Investor

So, there is a possibility that IBM would be the fab in this?

Jeffrey L. Parker

Yes. And one of the benefits for our technology is that it’s fairly stingy with the silicon. Our silicon chips are pretty small, so we get a lot of chips out of the wafer. So, there is capacity for us there.

Operator

Your next question is a follow-up from Jim Whitten - Laidlaw.

Jim Whitten - Laidlaw.

Going back to last spring where you were talking hopefully that we would have this second chip producer out by this time; so I imagine you have a few problems here. Could you just elucidate a little bit about the problems; are they legal, are they technical, is it a problem where we’re a small company dealing with a big company, whatever you can on that. Secondly, when this company is indeed announced, will the name be announced, which seems to be a point of interest for lots of investors? And thirdly, will it be possible that the name of the company we signed in December, once we started shipping in the fourth quarter, will their name be able to be announced?

Jeffery Parker

All of the negotiations I’ve been involved in for this type of technology; ITT first and then this commercial chipset company, they take on a life of their own and they take the time that they take and everybody has their own process. And, you know, all we can do is work it as hard as we can and try to be as accommodating as possible, and because we’ve made such good progress on the actual technology and the chipsets themselves, I think that’s really helpful to us in starting to move some things toward closure. In terms of whether we will be able to actually announce the next account, we would love to be able to do it. We certainly are going to ask for it and we are going to encourage it.

When the day is done, it’s going to be the decision of the company, the next material event. ITT decided it was okay for us to announce their name and I can tell you that through parts of the negotiation they weren’t indicating that, but ultimately decided okay, we will do it. The commercial chipset customer wanted for their own reasons, which are good reasons, which I can’t talk about today but we will hopefully some day. They decided they wanted to not have their name identified and they wanted some anonymity for a variety of good reasons. As far as will we be able to say who they are once they start shipping, I don’t know. We will certainly go and ask them for that. I would think it would be to both parties’ interests. However, if for some reason they decide they still want to remain anonymous, we start getting volumes that ships revenue out of them, ultimately when the day is done, that’s what it’s all about, “let’s bring in revenue and moved this company to profitability and grow from there.”

On the flip side, I will tell you it’s probably not lost on them that with our technology and their chipsets, eventually there are various companies out there that buy handsets, look at novel features, tear them down, open them up, write reports about them and publish them and you probably maybe seen reports on the iPhone. It didn’t take them probably very long since the 3G iPhone was out or even the 2G that people tore them down and wrote reports on them. It wouldn’t surprise me if that’s what happens ultimately with our technology, whether it happens quicker or it takes a little longer, I don’t know. But ultimately, I think it will come out who is the smart, forward thinking company to adopt our technology early and grab that competitive advantage and move forward with it. And hopefully and certainly I will encourage them to put that flag in that mountain and lay claim to that because we will be forever indebted to them for their leadership and I hope that they lay claim to that, but that will be up to them; that will certainly be their decision.

Operator

And it appears we have no other further question at this time.

Jeffrey L. Parker

Well, as I said in my comments, we really do appreciate your continued support and as I said, we don’t take your support lightly or for granted, and we are working feverishly to move this company forward on multiple fronts and to make this the kind of company that everybody has hoped it can be in terms of its growing shareholder value. So, thank you and have a good evening.

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