Resonant Inc.
Q2 2016 Earnings Call Transcript

Published: 11 Aug 2016

[Operator:]

Greetings and welcome to the Resonant Q2 2016 Corporate Update Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I’d now like to turn the conference over to Greg Falesnik from MZ North America, the Company’s Investor Relations. Thank you, sir. You may begin. Greg Falesnik Thank you, Operator. Earlier this afternoon, Resonant released financial results for the second quarter ended June 30, 2016. The release is available on the Investor Relations section of the Company’s Web site at www.resonant.com. Additionally, some of the information in this news release and on this conference call contains forward-looking statements that involve risks, uncertainties and assumptions that are difficult to predict. Words or expressions 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 forward statements. Several factors that could cause or contribute to such differences are described in detail in Resonant’s most recent Form 10-Q and 10-K 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 publicly update any forward-looking statements or supply new information regarding the circumstances after the date of this release. Resonant's CEO, Terry Lingren is your host today and he will introduce the rest of the team joining him. With that, I’ll turn the call over to you Terry.

[Terry Lingren:]

Thank you, Greg. And good afternoon to everyone, joining us live on today’s call. With me today is, George Holmes, our President and Chief Commercial Officer. George and I are in New York City, where we just flew in from Boston. And we were there for the Oppenheimer and Canaccord conferences. Before beginning I’d like to acknowledge the departure of our CFO, John Philpott who has left the company for personal reasons. John was with us with us through the first two years post IPO and we wish him the best of luck in his future endeavors. In conjunction, on August 1, we welcomed Ross Goolsby, of Bridgepoint Consulting to our team, who is now serving as the Interim CFO. Ross has over 25 years of experience in both public and private company finance where he has been CFO, several technology companies including Calxeda, HealthTronics, Valence and SigmaTel. We’ve retained an executive search firm ON Partners to begin looking for a permanent CFO. ON is global leader and technology industry executive recruitment and has recently led successful CFO searches at Tesla, Airbnb and MCORE. Last quarter, we talked about 2016 being a transformational year for Resonant, one in which we would move from being a purely development stage company to one focused on customer execution and engagement. We made significant progress towards these goals in the second quarter of 2016, building upon the momentum we established in Q1. We began the quarter with four main goals, raising capital, enhancing our Infinite Synthesized Network or ISN technology platform, expanding our intellectual property portfolio and obtaining additional licensing deals with existing customers. I’m pleased to say we achieved all four. Most significantly, we’ve expanded the relationship with our two initial customers beyond the licensing deals for five filters that we consummated in the first quarter. We added six new filters to these agreements and now have a total of 11 customer projects under development using our patented ISN technology. We’re working on six filters for seven sockets for our Tier 1 customer and four filters for our Tier 2 customer. These licensing agreements include upfront payments, additional payments upon design completion and of course putting in royalties when mass production commences. We also acquired GVR Trade SA or GVR, a Swiss-based company specializing in the consultation and design of SAW and BAW filters. We expanded our intellectual property and licensing portfolio to over 100 issued and filed patents. We joined the Drexel Micro-Cap Index, which is a positive reflection of our continued progress, helps to create increased awareness throughout the investment community and attract new index funds to the stock. Finally, we began the quarter by completing a private placement that raised $6 million in gross proceeds from existing and new investors including members of our management team and board to extend our runway. I’d like to turn the call over now to George Holmes, our President and Chief Commercial Officer to go through the customer achievements in detail, and speak to our overall commercialization strategy. Afterwards I’ll jump back in to touch on the growth of our team and IP portfolio. And then we’ll summarize the financials before turning it over for Q&A. George.

[George Holmes:]

Thanks Terry. 2016 has been a pivotal year for us, where we demonstrated the power of our technology to building our customer base and not only the number of projects but the complexity of these projects under development. Our progress provides a clear line of sight from how we will transition from being a technology development company to a licensing company. As Terry said, we have four key goals for the quarter, raising capital, obtaining additional licensing deals with existing customers and enhancing our ISN platform, and expanding our intellectual property portfolio. We began the quarter by completing the raised capital through a private placement in April. So now, let me provide some additional color on the progress on customer engagement and the expansion of ISN platform. As Terry touched on in his opening remarks, we have two customers for which we are designing a total of 11 devices. These engagements approve that we are able to secure design mandates for single hard band filters, duplexers in addition to more complex designs such an quadplexers, all of which can be sold either as discreet or integrated into modules. Further they provide validation that our customers are happy with the work we’re doing for them. And believe our ISN plus IP platform solutions that can scale across several products in our portfolio and see the potential for commercial success going forward with us as such a partner. Once signed, this progress is really validating the leverage in our business model, meaning that even though we are working on 10 filter designs, we expect minimal increases to our overhead. As with ever new company and technology, the most difficult challenge is closing that first customer. We have passed that critical milestone. And are now demonstrating the customers who are intimately involved with Resonant in our platform are willing to broaden their engagements with us and are making extensive investment in our technology. These deepened relationships are leading indicator toward customer adoption in advance of revenue. To facilitate future growth, we’re building a strong pipeline of prospective additional customers. We believe we’ve been able to leverage our success to date to build relationships with these new customers quickly. As we have discussed in the past, our customer focus continues to be pure-play SAW foundries, filter manufacturers, or a funding module manufacturers, transceiver reference design suppliers, and handset and IoT OEMs. We are prioritizing these target customers by identifying those with an immediate need. We are highlighting the capabilities to filter manufacturers and SAW foundries as our first priority followed by the module manufacturers, transceivers reference design suppliers, all while marketing our capabilities to OEMs and carriers. We remain intently focused on only engaging with the right players for the right designs. I’d like to provide you with a sense of how a typical customer engagement might look. Customer engagements begin with paper valuation of our capabilities rapidly move to the evaluation of specific simulations for specific designs. The next phase is the negotiation of a Joint Development Agreement, JDA, once signed, parts are designed, fabricated, evaluated against the simulation, if tweaks are needed to maximize performance the designs are adjusted in response. Typically once the simulation and parts produce are closed, the licensing agreement is negotiated and signed. Final parts are then fabricated and sampled to customers’ socket one where the payments begin to be end at typical time from assigned license agreement to first customer shipments is 12 to 15 months. Now let me dive a little deeper into the three most recent customer announcements. In early June, we announced the extension of license agreement with our existing Tier 2 customer. Under the extended agreement, we’re designing, developing and licensing a complex filter that is specifically focused on the support of Time Division Duplex or TDD requirements of the Chinese market. This filter will be designed as a full band low cost SAW filter, which has historically delivered utilizing either BAW or Film Acoustic Resonators, which they’re also called FAR filter designs. We are now designing four products for this customer. On August 1, we secured licensing terms for an additional three designs with our existing Tier 1 customer. The new license terms encompass the development and licensing of our first integrated module design that includes three complex duplexers, the design we utilized Wafer Level Packaging, WLP technology packages in integrated circuit, all still part of the wafer. Resonant conventional slicing the wafer into an individual circuit and then packaging them, delivering advantage of component size as well as production time and cost. This design will meet the technical demand in highest constraints facing not only this customer but the mobile device industry as a whole. On Monday of this week, we announced yet another win with this existing Tier 1 customer, which brings our total number of products we’re designing for this customer to six. The license agreement encompasses the enrollment of a licensing in the integrated module which will include both a duplexer and a quadplexer in a single module. Most importantly this design will dramatically reduce the size of the circuit board. The quadplexer will combine four separate frequency bands for increased data rates into a single miniature package. Quadplexers enable carrier aggregation in which multiple frequency bands are combined for higher data rates which is, the key feature of the LTE advanced communication standard. However, it’s much more difficult to design quadplexers. So, quadplexers’ availability is limited at this moment as consumers’ availability to demand is smaller, lighter and thinner mobile devices with increasing data capabilities, the demand for small footprint quadplexers will continue to grow as well. It’s important to note these latest two announcements are for filters that are specifically being designed for RF modules. Modules are complex parts that integrate filters, power amplifiers and other components. Typically modules are sold to Tier 1 OEM customers. The discreet filters which are not integrated in the demanders and were typically sold to the Tier 2 and Tier 3 OEMs. The fact that our customers are asking us to design filters that will be integrated in the modules signifies our confidence and our technology and our ability to support their Tier 1 OEM customers. The scale of the potential market opportunity for these products we are presenting with these designs is on us. Worldwide annual total available market, 10 for each of these bands, we currently have under our contract ranges from 100 million units a year to as high as 3 billion units a year. As it’s true with all agreements, we cannot disclose the payments or terms due to the confidential nature of these agreements. Now, I’d like to turn the call back to Terry to discuss our recent acquisition, our IP strategy and high level financials for the quarter. Terry?

[Terry Lingren:]

Thank you, George. I’d like to start with our progress in extending our ISN platform and the depth of our team. In early July, we announced the acquisition of GVR, a Swiss-based company specializing in the consultation and design of SAW and BAW devices from its sole shareholder Dr. Victor Plessky for approximately $1.1 million in stock and cash. This broke down to $600,000 in cash and 125,000 shares of common stock. The acquisition was a logical extension to the existing eight-year cooperation between the two companies. During this collaboration, Victor and his team were instrumental in helping Resonant develop an essential and specific component of our ISN platform. We firmly believe they will add tremendous depth of knowledge and continue to bolster our suite of filter design tools and throughput capabilities, thereby further expanding our ability to support licensing agreements for both current and future partners and customers. Victor and GVR have been at the forefront of Acoustic Wave filter design publishing some of the most advanced works in the area for more than 30 years, with over 350 publications and over 200 citations. They’re very well-known across the industry having been instrumental in developing some of the most advanced technique in filter design and authoring some of the industry’s most notable publications. In addition, this acquisition brings Resonant a unique recruiting opportunity of bright young talent from several notable universities throughout the world where Victor has served as a professor including the Helsinki University of Technology in Finland and Universities in Germany, Switzerland, France and Sweden. Victor has joined us as Director of Engineering and we’ve also retained other key GVR technical staff and we welcome aboard. As we’ve discussed in the past, we are a technology company with a strong IP heritage. We remain keenly focused on building upon and expanding our IP portfolio. I’m pleased to report that we now have over 100 patents issued and pending, further strengthening our IP rights and showing the depth and value of our technology and tools. We view this as a significant milestone as it reflects the continued commitment to technological innovation and development, and shows our increased rate of innovation achieving our 50th patent milestone in January of last year. These patents establish a competitive advantage for our technologies. By retaining ownership and protecting our methods and our circuit designs, we can leverage our technology into a strong and sustainable competitive position as a licensing company. It is worth noting that the 100-patent milestone we eclipsed recently does not include any technology from GVR yet. IP and patents will continue to be key cornerstones in how we plan to build our business. Now, I’d like to turn over to some financials and summarize our second quarter 2016 results, which compared to our second quarter 2015 unless otherwise stated. For the three months ended June 30, 2016, we recognized $63,000 of revenue, which represents $53,000 related to the upfront non-refundable payments of $80,000 received from our two customers in the first quarter and $10,000 related to the achievement of one milestone within the development agreement. Research and development expenses totaled $1.1 million compared with $901,000 for the second quarter of 2015. The increase was the result of the increased payroll, benefit costs, consulting costs, and travel and development costs related to the increased activity on our various filter designs under development. General and administrative expenses totaled $1.39 million compared with $803,000 a year-ago. The increase was due primarily to increased payroll and related benefit costs associated with the hiring of two executives, travel expenses associated with business development efforts and accounting costs associated with operating as a public company. On a non-GAAP basis, adjusted EBITDA for the second quarter of 2016 which includes non-cash charges for stock-based compensation and depreciation and amortization was $2.4 million or $0.27 per fully diluted share. This compared with non-GAAP adjusted EBITDA for the second quarter of 2015, of $1.7 million or $0.24 per fully diluted share. The net loss totaled $3 million or $0.34 per fully diluted share compared with a net loss of $2.1 million or $0.31 per share for the same quarter last year. Cash, cash equivalents and short-term investments on June 30, 2016 were $5.7 million. This compared with $5.5 million of cash, cash equivalents and short-term investments at December 31, 2015. In April, we raised growth proceeds of approximately $6 million in a private placement of units with various institutional and individual accredited investors and certain of the company’s officers and directors. We’re using the proceeds from the offering to continue our product development efforts and business development activities as well as G&A purposes. With that let me turn the call back to the operator for Q&A.

[Operator:]

[Operator Instructions]. Our first question comes from Cody Acree from Drexel Hamilton. Please proceed with your question.

[Cody Acree:]

Thank you, guys for taking my questions. And congrats on the progress, maybe Terry or George, if you could talk a bit about the evolution of your licensing strategy, you’ve talked a bit during the quarter about this being somewhat analogous to EDA tools that are used throughout the semiconductor industry. I’m just curious how you think that might impact your addressable market going forward and maybe the breadth of your customer base?

[Terry Lingren:]

Well, I think that it is simply that and evolution of what we’ve been doing all along. It’s actually something that we forecasted from the beginning. It’s come to the point in our evolution I think it’s time to start talking about our tools and ourselves as an EDA platform. Similar to ARM, we are main component, it’s licensing, licensing our designs to our customers which is what we’re engaged with now. These tools also have applicability and in fact fill a hole in the EDA space. The presentation on our website, if you refer to that you can see where most of the EDA companies operate in the digital arena filling sockets and base band sections of the chip. But RF is really where there is not much in terms, in fact anything that we know of in terms of EDA tools. We see our ISN platform filling that gap, this validation right now is licensing these on individual custom design basis.

[George Holmes:]

Yes, great point Terry. And Cody, I think one of the things that we see is by looking at ourselves as an EDA company and looking in further developing out our software platform, which obviously is evidenced by the acquisition of GVR and some of the other work that we’re doing, and then buffing out the balance of our IP portfolio. I think you’ll see definite extensions in both of those areas over the coming quarters. I think what this does is it really unleashes the opportunity with some of the larger filter manufacturers. And that clearly is going to be one of the things that we’re going to be talking to them about as we go forward. Everybody considers what they do is their crown jewels and yet the one key thing that all of these filter manufacturers have is they are design constraint from a people perspective. And the fact that we can actually create an opportunity for them to actually get greater throughput with the same number of people, I think it’s going to be a tremendous opportunity for us in the relatively near term. Hope that answers your question?

[Cody Acree:]

It does. Thank you guys, very much. Could you also may be just expand a bit on the importance of the extension of the license agreements into modules and now even including quadplexers? What these new engagements due to your addressable market maybe the timing of your expected deliverables, I know that you had a pretty quick time to first spend for your individual products. But if you can maybe talk about the breadth of the expansion and then how long it might take to get these products delivered?

[George Holmes:]

Well, Cody, let me take a tack, a run at it this way. I think that the extension does a couple of things. One

[Terry Lingren:]

Yes, I think George hit the nail on the head. It speaks to it’s a real validation of what we’re doing. They’ve looked under the hood and they have reengaged with us, in fact not only reengaged, they have given us some of their crown jewel products we’re designing for their MIDs as George mentioned and for quadplexer. That’s a very, very difficult design that not many people in this industry can do.

[George Holmes:]

This might be a good time to kind of add Cody, I mean, clearly we’ve talked about the upfront engagement fees that we’ve gotten from our customers. And clearly for us that is something that we look at to make sure that we’ve got engagement up and down the management chain to the customer, and we’re not being led down on those path by somebody who thinks that this is a very novel thing they want to work with us a little bit and then we spend resources into ultimately other program. So, from our standpoint, that’s one piece of the puzzle getting them to have skin in the game, means they’ve had a contract that’s been reviewed by their contract folks and done, completely up the chain. The other thing that this means is they’re investing heavily. And while this is not a semiconductor environment, the cost of $1 million to $1.5 million per spin of a chip, it is several hundred thousand dollars per spin and they’re signing up to spin three to five spins per device. So, each one of these companies is actually putting money to work on their side to actually invest with us. And we think that’s a great indicator that they believe heavily in what it is that we’re doing. Hope that helps?

[Cody Acree:]

It does. Thank you very much. And then, maybe just lastly, moving up to something like a quadplexer, there is not many of them out there today. George you mentioned maybe the level of confidence in this, is this, I guess, how deliverable is this, even some of the very large frontend module makers that were struggling with quadplexers and so. I guess, you’re very confident in being able to deliver this, timing and then just you’ve got a limited number of people, I guess. So how are you, how much bandwidth do you have left?

[George Holmes:]

Cody that’s a couple of questions in one question, that’s kind of cheating. But let me try.

[Cody Acree:]

That’s my last, thank you very much.

[George Holmes:]

Let me try to tackle it, I get Terry to help me here. I think one of the things is, I mean, quadplexers, I mean, obviously clearly the gold standard of quadplexer is Avago with their FR process been delivering quadplexers now for over a year now. And all the other major players have been saying that they wanted to get into their space. I think one of the other Tier 1 module manufacturers had announced their quadplexer 18 months ago. And they in their most recent announcement said one of the things, that’s drawing them down is the struggle that they’re having getting their quadplexer into the marketplace. Quadplexers are hard but the good news is, we believe the power of our tools and our ability to simulate and work very closely with our Tier 1 customer, they were going to be able to do this in, again, we believe we will be able to do this in a fraction of the time that competitive solutions are developed in. And most importantly, and our target is to do this in SAW. So it’s going to be significantly more cost effective. Let me add to that and then I’ll hand it over to Terry to cap that question off. You added to the question around capacity and our ability to do all of these designs and the fact that we’re not stopping here by any means. We have a target for the balance of the year to continue to extend these relationships not only with the current customer base. But I mean, I think the thing you should be looking for us to do to really validate those platform is atypical customers that you might see as bringing the play that want to go after this segment of the marketplace because of the growth potential whether that be pure-play foundries, whether that be RFIC companies or companies of that nature, would be great companies to see us partner with, typically atypical for being in the filter business but are on the fringe and definitely in the supply-chain of the RF frontend. So those are the kinds of companies in addition to the ones that we’ve been talking about all along that I think you should look for us to be partnering with. And lastly, to tap off that last component of your question, I think it really speaks to the power of our tool. I mean, we don’t have to brute-force every single design and hope that we get lucky. Our tool allows us to design, synthesize and simulate optimized designs in the millions of different tries at a given design every time when you use the tool to go create a new device. So I think we have the ability to go do things much more quickly. And so we are not design constrained from a people perspective, we actually think we have excess capacity at this point. Terry?

[Terry Lingren:]

I’m going to expand on what George is saying, especially about the quadplexer. And I’m going to give, throw kudos to the team. We have a team that is second to none in the industry. A couple of the guys have been designing parts like multiplexers, quadplexers for decades. The strength of the tool really comes into play when you get that kind of team that we’ve established married to a toolset like this. These guys have come in and after a few months learned the power of the tool and they’re like kids in the candy store. And they come up with these designs we’ve shown some of the quadplexer design simulations on the presentation of our website. So, it speaks not only to the strength of our team but more specifically to the strength of our tools. As far as capacity that’s also handled, that’s one of the things that we drive home with the toolset is continuing evolution of the tools to increase the productivity of these very senior guys. I think that’s also why we look at the potential some day, maybe licensing these tools to our customers or to those segments of the market that we don’t reach or can’t reach.

[Cody Acree:]

Thank you very much, and congrats on the progress.

[Terry Lingren:]

Thank you, Cody.

[George Holmes:]

Thank you, Cody.

[Operator:]

[Operator Instructions]. And our next question comes from the line of Lou Basenese from Disruptive Tech. Please proceed with your question.

[Lou Basenese:]

Congrats on the progress of customers guys. I just a question for you, I noticed this quarter you recognized some design acceptance in milestone payments. Can you give us an idea if they’re all going to be in the similar range, five figures or do some reach into six figures?

[Terry Lingren:]

They’re in similar ranges, similar orders of magnitude. As George said, these license - these upfront license fees are really to get the engagement of our customers, to make sure that they have bought into this all the way up and down the line. We don’t want this to be done somewhere in a [indiscernible] type area. The magnitude are for now similar to what you’ve been seeing some larger, some smaller.

[George Holmes:]

I think the importance Lou - Lou, the importance here clearly is getting as Terry described and as I described earlier is getting the engagement up and down the line at the customer’s executive management team because I mean, we don’t want to just do one design for these guys. We want to do a multitude of designs which means they’re going to be making a significant investment on their side. And that’s really where the investment comes. I mean, you can look at other companies in this Micro-Cap space that there are big challenges. They spend on a quarter-to-quarter basis $1 million or $1.2 per spin of their devices, we don’t have to do that, that’s the beauty of our model. But our customers do have to make that investment. Now, fortunate for us, they don’t spend $1.2 million per spin like you do in semis. It’s significantly more cost effective to spin a filter design.

[Lou Basenese:]

Right, understood. Another question, you talked about in the prepared remarks, the total addressable market. I was just curious I mean, you are not giving revenue guidance, but can you give us some guidance on the potential volumes for the current design you have under agreement if they were successful in getting included in phones? I know they’re for high volume bands, so just trying to get a rough approximation of how many units we might be talking about per year, per month?

[Terry Lingren:]

Well, we’re not giving those kinds of guidance as George mentioned. The bands that we play in, we target the high-margin, high-value bands. One of the slides in our public presentation shows kind of the breakdown of the various bands, duplexers, high-value filters, quadplexers, that we go after. The market today is $8 billion in total, about $5 billion of that are these high-margin products that we go after, and the whole market is growing almost doubling over the next three to four years.

[George Holmes:]

I think what Lou you could do if you want to take a look at it, I mean, you look at the presentation, you look at the types of devices that we’re targeting is all the devices that are in the BAW segment from a band perspective. And if you look in NAVI [ph] and then kind of back into what the kinds of numbers at a TAM level. At the TAM level the devices are running 100 million to 3 billion a year. And that’s the number I threw out in the script during the call. And clearly, when you’re talking Tier 1s, they get a bigger percentage of that, you’re talking Tier 2s, they get a smaller percentage. So I think from our perspective, when you’re talking at the high-end, 3.4 billion units, even a small percentage of a big number is a big number.

[Lou Basenese:]

Right. Last question…

[George Holmes:]

Sorry, we can’t be more definitive on that at this time.

[Lou Basenese:]

Yes, understood. Last question, I think last quarter you provided some guidance on the just the sales funnel, you guys have done a good job of expanding your relationships with existing customers, just curious if you can give us an idea of how many engagements you have, just active discussions not where they’re at necessarily but active discussions with new potential customers?

[George Holmes:]

Active engagements with new potential customers, if you recall, the roadmap of customers that we have in our presentation there is probably 20 guys on the list that matter. We’ve engaged with two. I can tell you that we have active conversations with everybody on that list at one level or another. And because we’re in the market I mean, so we’re talking to everyone. And we’re spending more time talking to the guys that are doing filters and pure-play foundries today because that’s where we believe time to revenue is going to be key for us as a start-up company even though we are public venture backed company, we’re still a start-up, we got to get to revenues, so we’re focused there. But we’re going to be talking to module guys we’re going to be talking to the guys that are both existing big players in the module space, guys that are newcomers and folks that are in the reference design space. And I think that if you had to say where we’re spending 80% of our time, it would be those two buckets. I mean, clearly we want to be out in front of and marketing to the OEMs and even to the carriers for that matter because some of the things that we’re doing from an architecture perspective, we want to make sure that carriers understand and know about. And those would be things that we’ve historically talked about like tunable, triplexers maybe dual pass-band filters and the things of that nature. Those aren’t things that if you had them today would go into a phone there are architecture changes that are fundamental not only from what they can do for the carrier but what they would ultimately do for the OEMs. So we do spend some time marketing at that level. But all of our time and energy is focused on those other two buckets. Hope that helps?

[Lou Basenese:]

It helps. Thanks for taking my questions guys.

[George Holmes:]

Absolutely.

[Terry Lingren:]

Thank you, Lou.

[Operator:]

There are no further questions at this time. I’d like to turn the call back over to management for any closing remarks.

[Terry Lingren:]

Thank you, Operator. In closing I’d like to extend my appreciation to our team for their hard work and dedication in moving the company along the path to commercialization. We had four main goals this last quarter, raising capital, enhancing our ISN technology platform, expanding our intellectual property portfolio and obtaining additional licensing deals with existing customers. It’s because of our team’s great efforts that we were able to achieve all four, making it possible to create designs for our customers using our ISN platform for hard bands and complex requirements that we believe had the potential to be manufactured for half the cost and developed in half the time of traditional approaches. Q2 was another milestone quarter for Resonant. And the opportunities are more compelling than ever. The demand for wireless data continues to grow at a phenomenal rate and there we are at frontend market especially filter demand is the fastest growing area of the mobile device industry. The growth we’re seeing in unit volumes, sales and complexity all play to our strengths. We’ve had a very productive first half in 2016 and have a strong pipeline through the balance of the fiscal year. We plan to continue our support for our current customers with new designs to expand our customer footprint in our focused segments of filter companies and pure-play foundries as well as to explore new partnership opportunities with non-traditional semiconductor suppliers. We’re confident in our ability to achieve these goals and look forward to reporting our progress on them on our next quarterly call. We believe 2016 will continue to be a pivotal year for us and will ignite our future growth. Thank you all for your attention.

[Operator:]

Ladies and gentlemen, this does conclude our teleconference for today. We thank you for your time and participation. And you may disconnect your lines at this time. Have a wonderful rest of the day.