Resonant Inc.
Q2 2015 Earnings Call Transcript

Published: 12 Aug 2015

[Operator:]

Greetings and welcome to the Resonant’s Second Quarter 2015 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 would now like to turn the conference to your host, Ms. Ina McGuinness. Thank you, you may begin.

[Ina McGuinness:]

Thank you, operator. Earlier this afternoon, Resonant released financial results for the second quarter ended June 30, 2015. The release is available on the Investor Relations section of company’s website at www.resonant.com. And we are also using a slide presentation to accompany this earnings call. The length of the presentation is included in the press release; we had also posted the presentation to the IR section of the Resonant’s website. Lastly, some of the information contained in the news release and on this conference call contain 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. Participating on the call from the company today is Chief Executive Officer and Co-Founder, Terry Lingren; and Chief Financial Officer, John Philpott. And with that, I’ll turn the call over to Terry.

[Terry Lingren:]

Thank you, Ina, and welcome to everyone joining us today for an update on our progress. During the quarter, we made meaningful progress across our entire product portfolio. During this call, I’ll be providing you with an update on our strategy of working on designs for multiple products with various customers and I’ll discuss some of the information we’ve provided in our recently issued white paper including the competitive performance delivered with our first [indiscernible] band line. Please turn to Slide 3 of the presentation. The RF industry is going through massive changes, in addition to the both of growth and the demand for filters due to Band proliferation; we are seeing rapid increases and complexity due to Carrier Aggregation and Multiple-Input, Multiple-Output or MIMO. We believe these trends play to Resonant’s strength and design, modeling and novel approaches to dramatically reduce the size and cost of the RF front-end such as tuneability. We have now shown our technology suite Infinite Synthesized Networks which we refer to as ISN can be applied a single band filters to increase state of the art products. ISN consists of software design and analysis tools we have developed over the years, along with the design methods we use. We are now applying it to the more complex problems of tuneability and multiplexing while continuing to grow our single band product portfolio. Please turn to Slide 4. Part of what makes Resonant unique is that we do not rely on a single technology or methodology that could be easily replicated by others. Our team, our tools and our technology have taken years to reach this point and we’re just at the very beginning of creating truly differentiated products. As our growth accelerates, we believe the multiyear lead we have will only widen. First and foremost, we have assembled a truly world-class technology team. Our team includes senior experts with more than 20 years in the RF and complimentary sectors, as well as the few more recent graduates. Currently we have a technical staff that’s comprised of 15 business system engineers, six of whom are PhDs plus two of our executives who also have technology PhDs. As previously stated, we aimed to double our technical staffs to 20 by the end of 2015 in order to increase our development and design capacity; we are half way there at this time. At the board level, I’m pleased to announce that industry veteran Tom Joseph joined our board of directors in July. Tom performed some of the earliest work on some of our resonators during his doctoral dissertation. He recently retired from 13 years at RF MD, which is now Corvo, during which time he worked all the major SAW and BAW manufactures We are very pleased to add Tom to our board and to gain from his deep understanding of the industry. We use our tools and methods from ISN in all four phases of our design process shown here creating colonial design, finding best possible solutions, refining those solutions and finally physically implementing the best ones. There are two main points to understand about ISN, which is under constant improvement, one it is based on the actual physics and material that comprised circuit elements. We believe the most others in the industry use more empirically based models. And two its takes advantage of the continual growth in computing power, by using actual physically based models we get extremely accurate predictions of performance, which translates into to fewer Fab turns and more exact end results. These are both compiling and extremely attractive selling points for Resonant. Together our team and ISN increase the results of the technology that we bring to our customers. Today we've become much more efficient and as a result, we will be able to create an increasing number of future designs in less time. This is the result of the improvement we’ve made in our tools and models over the course of developing our first single-band product, the Band 3 Duplexer and we’ve always been intelligent and ensuring that we protect this technology both the novel solutions we create and unique methods we used to create them. We have more than 70 issued and pending patents and continue to grow our patented state as a strategic part of revenue. Please turn to Slide 5. Let’s first going to our single band designs, product one as you may know is a temperature compensated or TC-SAW Duplexer for Band 3. Band 3 is one of the major spectrum to bands for 4G LTE and will be in use well into the future. Over 400 million of these Duplexers were shipped in 2014 and this is expected to grow to over 600 million this year. We have now completed two generation for this product both with performance, size and costs that are competitive with the best parts available. The first measurements is 1.8 by 1.4 millimeters and the second 1.7 by 1.3 millimeters and referred to as 18/14 and 17/13 sizes in the industry. We have also started to working on the third generation, a 1.6 by 1.2 millimeter part, which will be lower cost and smaller still. The second gen the 17/13 part is now undergoing the Fab’s qualification process, a step that is required prior to design acceptance. We are currently negotiating a license relationship with the Fab; this of course is the same Fab we work closely with over the course of developing our Band 3 design. We and the Fab are working to market the product to a number of potential customers and have sample parts in the hands of a number of them. Please turn to Slide 6. Over the course of 18 months from a standing start, we developed TC-SAW Duplexer one of the hardest bands in use today with performance, size and cost comparable with the best publicly available parts using existing fabrication process. We also dramatically improved our tool sets and techniques for designing single Band Duplexers. This is demonstrated by the fact that over the past quarter, we created the second generation of this design, the 17/13 part I previously mentioned in one Fab term and the performance is actually better than our 18/14 parts detailed in the White Paper. I will talk more about this in the next slide. Please turn to Slide 7. Our modeling tool based on the actual physics of these material circuits, afford greater accuracy and predictability, along with using any Fab’s existing design rules and processes this means reduced development time and greater manufacturing margins, which transit into quicker time to market and lower production costs for our customers. In addition and represented by the graph in the lower left of this slide, we are building tools that allow us to predict high power and non-linear performance both of which are very difficult to do. This helps to ensure our customers with the revenues of our part and helps skew the in consumer increased data rates with cleaner lower noise signal. Please turn to Slide 8. Turning to our second product being done at another Fab, we are now on track to complete this design by the end of the first quarter of 2016. This product will also be a SAW Duplexer where traditionally BAW only Band, which is another one of the large worldwide bands. This product two Fab has significant marketing channels, based on their expectations for the marketability of this Duplexer to RF front-end manufacturers and mobile device OEMs, we are very excited about the sales potential for this design. We expect to finalize licensing terms once the Fab makes the decision to move forward with commercialization. Looking at our choices for next projects, we continue to see growing opportunities because of Band proliferation, phone skew splintering and industry wide constraints on both supply and design bandwidth. We will continue to pursue these opportunities that will bring the most value to Resonant and its shareholders. Please turn to Slide 9, we began the process of developing this prototype tunable filter in December and are still on targeting to complete our design by the end of 2015. Our goal is to present our prototypes to potential customers for evaluation in order to secure a licensing agreement. Our design is based on information gathered from several perspective customers and the receipt of specifications from two of them. We are mid way through the development process having created a number of polynomial variance and many, many possible solutions. Well our goal is to develop a three state filter prototype, we've began with an existing Band 5, Band 8 design that we are in process of fabricating as a dry run, our plan is to uncover possible fabrication, assembly or supply issues before committing to build more difficult three state design. Likewise single band designed the first full tunable design will involve extensive tool development and a steep team learning curve, hence like our single band development projects. We expect to be able to shorten the time to market four subsequent designs. Please turn to Slide 10. We’ve also talked about our tools and their power. Starting with the set of customer specifications, we create mathematical equations containing whether referred to as [indiscernible] polynomial and the field of network sentences vary. From these we generate huge effectively infinite numbers of possible circuit solutions that target a particular set of specifications. This slide shows an example of one the screens or evaluation tool that we use the measures of goodness of each possible solution. Here on showing two of the three bands or states that are filters being designed, for each graph shows the transmission along the horizontal axis and reflection along the vertical axis. The important thing to note is that each small blue cross that may like dots linear screen represents a complete unique circuit solution to the polynomial that we measure against the customer specifications. We do this for all three states and then find some of the best solutions that are common to all three states. In other words, we find those few thousand or few hundred blue cross that are common to all three states and that are best in terms of the individual transmission and reflection specifications. This represents a transition to the three step in our process refinement, which is a set we are beginning now in our tunable filter project. We’ll being next doing much deeper analysis and refinement of those few hundred designs, find the handful of breakthrough needles in the hay stack of possible solutions. I wanted to delve into a bit of a technical details of the tunable technology to demonstrate what we are doing in tunable is real. As we get closer to the combination of this tunable filter project, we expect to publish a White Paper so that we go into more detail of our tunable filter technology, well stay tuned. With that, I’ll turn the call over to John for the financials.

[John Philpott:]

Thank you, Terry. Please turn to Slide 11. I’m going to summarize our financial results for the second quarter 2015 compared to the second quarter of 2014 unless otherwise stated. These results are included in the Slide 11 in today’s presentation. Research and development expenses totaled approximately $1.1 million up from $969,000 a year-ago, the increase is primarily due to increased technical stuff and accelerated activity on our many filter design for development, whereas we only had one design in development in 2014. General and administrative expenses totaled $943,000 compared with $455,000 a year-ago, which was our first quarter of operation as a public company. This yielded us a net loss of $2.1 million or $0.31 per fully diluted share this is based on 7.2 million outstanding. included in that loss in non-cash expenses from stock compensation and depreciation and amortization totaling $907,000. A year-ago, we reported a net loss of $2.2 million or $0.69 per fully diluted share, which was based on $3.1 million shares outstanding. We had cash in investments of $9.8 million and working capital of $9.2 million at June 30, 2015 compared with working capital of $30.2 million at December 31, 2014. We believe we have sufficient cash to support our planned operations through the first half of 2015. Please turn to Slide 12 and now I would like to turn the call over to the operator for a question-and-answer session.

[Operator:]

[Operator Instructions] And the first question comes from the line of Cody Acree from Ascendiant Capital. Please proceed with your question.

[Cody Acree:]

Thanks for taking my questions guys. Terry may be if you could go back to I guess the breadth of your engagements. You’ve talked about your foundry partner now as a derivative of the previous JDA but beyond that, if you can kind of stratify, where you closest may be the number of engagements you’re dealing with where you think those can turn into revenue and may be those that were further away.

[Terry Lingren:]

Sure, we talked about first two product development Cody the Band 3 which is now officially complete and going through call process with our Fab and Product 2 which we are right in the middle of designing at the moment. We of course have our tunable prototype which is underway but it’s not revenue generating in and of itself. We have had a number of discussions, the numbers of discussions with potential customers continues to increase and we’ve got parts in hands of few of those. The as far as revenue we’re not giving guidance on revenue, so I don’t want to get into timeframes for when we expect revenue from those but we’re seeing a lot of positive response from many potential customers and in terms of we had something announced that our customers are comfortable with we will announce them.

[Cody Acree:]

Terry maybe if I could ask it different way like you said you got parts in the hands of these customers you seem to be getting very good responses from testing of these parts. So from a technical standpoint, from a performance standpoint seem - things seem to be progressing along what customers would want, yet we are giving samples and prototypes and there is a lot of testing but you haven’t moved to some degree of formalization I guess are we nearing some formulization with these partners or is that not something that we’re likely to see in this near term.

[Terry Lingren:]

So we it varies by potential customer and I do believe that we will see positive movement, I hoping this quarter, certainly within the next quarter I would expect to have positive results to report that gets us about as much information really get around timing of when we might expect [indiscernible] that these things tend to take a while and it depends on the nature of the engagement. The one thing I will say is that the market is getting more complex our front ends are getting very complex, very quickly and it’s kind of changing the discussion that we’re having with many of our customers it’s moving pretty quickly from different filters to more complex things. We mentioned tuneability, multiplexing is also something it’s becoming looked at quite a bit. As far as the individual products even our Band 3 or Product 2 it does take a while for customers to get those designed into their parts and we’re get comfortable with sourcing that. That said, the best answer to your question is that we do expect some positive results within the next quarter or two.

[Cody Acree:]

Hi, and Terry as your customers, potential customers are building through these evaluation steps, I guess what is it that’s - I guess are there certain milestones, certain thresholds is it just their standard qualification process or they going through may be a different level scrutiny because of the uniqueness of your process and that’s taking longer because it does seem like may be given the technical performance that you’re telling these qualifications might be a little quicker than may be what we’ve been seeing?

[Terry Lingren:]

There is nothing different about the processes that we’re using, the packaging, the Fab processes are exactly what they always been using. So there is no, there doesn’t seem to be confirmation from their customers and with respect to that as we mentioned the first Product Band 3 is going through the qualification at our Fab right now. Their potential customers for that part may then add other qualification processes on top of that, it’s very dependent upon them and their requirements and how quickly they can do it.

[Cody Acree:]

I’ll tell you one last thing, one last thing on that are there any likely beginning exclusivities within the agreements that you’re working toward?

[Terry Lingren:]

It’s always possibility, we always wait exclusivity versus potential repairing and try to reach that agreement with the best of our customers and best for Resonant and our shareholders.

[Cody Acree:]

And John lastly then just from a liquidity standpoint you’ve talked about adequate cash through the source cash of 2016, is there a minimum operational balance that you feel comfortable running the company and are there ease or there other sources of cash rather than just revenue that might help you to stay above that minimum?

[John Philpott:]

Hi as far as the minimum certainly would like the quarter to at a minimum if you will and we bring in $2 million in quarter still, so we’ve been pretty consistent for the last couple of quarters on that, I think besides some of these milestones that could result in potential revenue in some timeframe over the next six to 12 months there is also opportunity we think for some new customers where there might be some license fees associated with that, maybe even some prepaid royalties it could help on that. So we’re kind of exploring what those opportunities are as we go forward here in tunable advances and some of these other things in discussions looking to have some better insights into that.

[Cody Acree:]

All right guys, thanks for all the questions, good luck.

[John Philpott:]

Thanks.

[Operator:]

Your next question comes from the line of Krishna Shankar from Roth Capital. Please proceed with your question.

[Krishna Shankar:]

Yes congratulations on the technology milestones, with regard to the manufacturer who developing your product, are they at a point where they are qualifying and sampling the product with Smartphone manufacturers or can you talk about where your filter manufacturers stand right now in terms of sampling the product?

[John Philpott:]

We as I mentioned, we’ve got product in hands of few potential customers for our Fab, the we are still going through the qualification process as about, so that has to complete before engaging in really meaningful supply agreements with the Fab and much of that will be done through the Fab with [indiscernible] but we do have positive engagements with the number of potential customers in the Fab, there is a lot of interest I don’t know if that answers your question fully but that’s where we stand.

[Krishna Shankar:]

Okay. And then will you be - will there be revenue potential both in the first version of the product as well as the second and third generation that you outlined at today for the single frequency filter or do you expect most of the revenues to come from the two new products you’ve developed?

[John Philpott:]

The qualification process itself is quite intensive from a capital standpoint and equipment standpoint and just time. So we’re taking the second generation parts of 17/13 part through that qualification process. As the 18/14 part in some respect get to low up by the 17/13 part which actually performs than the 18/14 so the 17/13 is the one that we are concentrating on right now. If someone to be interested in the larger we could certainly resurrect that and have not resurrect it just take it through qualification and addition.

[Krishna Shankar:]

Okay. And then are you engaged in discussions both with U.S. based end customers, last one customers and can you talk about the types of customers you are engaged with the discussions?

[John Philpott:]

The discussions are pretty wide ranging, the range of customers is pretty wide it’s all of the above that you mentioned we’re talking to potential phone OEMs certainly the RF module integrator, Fabs, other Fabs even some interest from base band manufacturers.

[Krishna Shankar:]

Got it. Okay, thank you.

[Terry Lingren:]

Thank you, Krishna.

[Operator:]

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

[Lou Basenese:]

Congrats on the progress guys. I just had two quick questions one on the design, it seems like you have improved the design speed you’ve done the last generation in one turn, can you just give us some color about how much from initial design to a final product, how much that timeframe may have improved as it gone from say a year down to nine months or any color on that?

[Terry Lingren:]

Just speaking more in qualitative terms and quantitative terms we are quicker and it has to do with all the tool development we have during that first product design, the Band 3 design as well as the team learning and improvements just in overall methodology each individual design unfortunately it answers your question is very different and it depends very much on what to expect we are trying to achieve. And they can drive significant increases in throughputs simply because one or two very, very difficult set might take longer time to solve in general terms we are factor the fact we completed the 17/13, second generation part in one turn is obvious demonstrator of that. It was hence not likely it was an incremental change, it was a complete redesign over the filter to fit into those smaller parts, so we’re getting smaller, sorry I can’t quantify anymore than that but some of the time scale that you talked about just now or probably accurate now if you go from 12 months some of the thing might take nine months now and we expect the next design turn all of the things being equal to continue to reduce like that.

[Lou Basenese:]

Along the way, you worked on Band 3 and then another very difficult Band high Volume 2 does the design process get quicker as you work on other bands that might not necessarily be as technically challenging, I mean is that a fair assumption?

[Terry Lingren:]

Yes I think that is a fair assumption. The other thing that we do is then also in addition to going quicker on a design, we can leverage our resources, our folks, our team more and so there might be times where we would sacrifice some speed in order to satisfy another customer, take on another design, so those are the decisions we are taking all the time that kind of modify that response by throughput.

[Lou Basenese:]

In terms of staffing you hit on a little bit I know you guys need to get another goal is to get above 20 by year end, how many - how much bandwidth do you have now, how many products you would be handling with the staff that has now?

[Terry Lingren:]

Well what we said before is 20 folks by year end and we expect to have as many as five or more in current project by year end. It certainly varies dependent upon the complexity of the design that we take on tunable filter for instance, the prototypes that we’re doing right now, in general takes more resources than a simple design and certainly a plain vanilla SAW, which we actually still see some interest in because of the design bandwidth constraints in industry could be done with fewer resources still.

[Lou Basenese:]

Okay. And just last question again on longer staffing you added an industry expert to the board, any other people you’re looking to potentially add maybe another board member or shareholder representation or someone on the side any plans on those front?

[Terry Lingren:]

Yes we are actually searching for more help on the - side couple of folks actually, we would like to grow that side of the business, certainly now that we are getting to product designs, finished product designs we need to increase the bandwidth on the sales development side. At the board level, we don’t have plans right now to add more folks to the board, we are looking at some advisory positions to augment what our Board brings to the company and to maybe doing some more detailed work on developing the market, developing sales and so forth.

[Lou Basenese:]

Great, congrats on the progress again and best luck.

[Terry Lingren:]

Thank you. Lou.

[Operator:]

[Operator Instructions] Next question comes from the line of Jay Srivatsa from Chardan Capital. Please proceed with your question.

[Jay Srivatsa:]

Yes, thanks for taking my question. Terry on the product one the Band 3 Duplexer, you mentioned you’re in the process of qualification of the Fab, can you give us sense on timing, I mean, when do you expect that to be completed, when do you expect license this product for sale just any sense on what the timeline might look like in the next in the upcoming future?

[Terry Lingren:]

The Fab - call process should be done this quarter assuming there are no hiccups in it, that’s been fine today and we fully expect given our own internal test that we should pass qualifying. We’re also in the process of negotiating the license agreement with the Fabs, we expect to have that done before the sales of the product to their customers. The actual timing as we’ve said before, we’re not giving guidance on when we might see revenues from that, some of their potential customers may impose additional qualification testing and they may want to do that internally rather than through the Fab. So that adds more time to getting eventual sales, so that gives you some idea?

[Jay Srivatsa:]

Okay but you don’t expect any spin on the silicon that you would need to conduct in order to get to the licensing stage?

[Terry Lingren:]

Not at this point unless there are problems with the quality of sales, we don’t expect to turn it, this is the qualifications and having spent many years, over 20 years in the cell phone industry myself this we’re qualifying this part, this design so we have to make changes it restarts the call process so, yes we don’t see any more turns this would be the part we’ll be selling.

[Jay Srivatsa:]

Okay and then on Product 2, you mentioned having received the first parts from the product design, could you help us understand how the performance has been, are you happy with what you see in the product, you see further enhancements give us some updates please.

[Terry Lingren:]

We don’t happy with it, it’s a different Fab, different set of processes, it’s a different package even so there - those all of that the actual design, these packages are so small these days, they’re actually part of the circuit and so we have to take all of it into account, in addition being a different Fab, they have different processes, different ways they put middle down and from our standpoint these all affect performance. So we’re happy with the way the first parts turned out that we are making the second integration in the Fab right now and we’re on schedule.

[Jay Srivatsa:]

All right and then last question on the tunable filter are you considering the same Fabs that you’re currently engage with us potential partners there or you looking to add Fabs to help in that process?

[Terry Lingren:]

But now we’re going through the same Fab we’ve been working with, we know their processes, we’re familiar with them and then with us so there is a level of trust and confidence there between the two of that. It less the SAW resonators those, the filter parts building blocks of the components of the tunable filter are only one part now of the tunable filters whereas on a single Band design the Fabs were doing the entire parts. Now they’re simply supplying instead of components to the end design, we’ve also got switches, we’ve got other discrete components like capacitors and inverters. So the Fab be it SAW or BAW. We could use BAW resonators for these tunable filters too and in fact may choose to do that working on higher band becomes smaller overall part of the product design.

[Jay Srivatsa:]

All right, then last question from me. I know you mentioned, you’re not giving guidance but given all the progress you’ve made, would it be fair to expect you to start to see some revenue contribution in the first half of next year or is it going to be more back end loaded?

[Terry Lingren:]

Yes, we have said we’re not giving guidance obviously the part - we go in time but more or so revenue become I guess that as that was part of I’m going to go at this point.

[Jay Srivatsa:]

Thank you very much. Good luck.

[Terry Lingren:]

Thanks Jay.

[Operator:]

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

[Unidentified Analyst:]

Terry really just kind of a clarification on your product one the 18/14 which was the first generation and the 17/13 what happens to the 18/14 one should done with that and you now come up with the new product set of second generation, does it just basically surpass the first generation?

[Terry Lingren:]

Yes the 17/13 surpass the 18/14, the 18/14 design is there if we ever wanted to use it but given the cost of taking two products through a qualification process we are just concentrating on the smaller product.

[Unidentified Analyst:]

Okay. And is that also through with the 16/12, when is that replace the 17/13?

[Terry Lingren:]

It could - that would depend more on customer poll, we wanted to hold the trigger and get started on the call and the 17/13 part is state-of-the-art size at the moment, 16/12 is the first iteration is in process now, so we will see where it goes, if we may, if 17/13 part is a buyable part in the marketplace we’re just going to continue with that for now.

[Unidentified Analyst:]

Okay. And this is Mark on the headcount, last quarter you had 15 people in R&D and is that the same this quarter or have you added anything?

[Terry Lingren:]

Correct. I believe that we have not added anyone new this quarter, I think it’s still the same as it was at the end of last quarter.

[Unidentified Analyst:]

Okay. And the total headcount I was little bit confused you said last quarter you had added four employees in Q1, so the total headcount up or the same.

[Terry Lingren:]

In engineering, the technical staff is the same. Our total headcount is right now 25 people and as I mentioned we’re trying to - in addition to going to technical headcount, we are looking at going to the marketing business I do.

[Unidentified Analyst:]

Okay. And the last question I have is in the 10-Q for the first quarter, the comment about possible reserves for contingency of legal and I was just wondering you had not taken any at that time, is that something that could increase your SG&A line in the coming quarters?

[Terry Lingren:]

Yes. We haven’t taken reserves yet in Q2 either and the case is kind of going along slowly I think it’s been consolidated finally and though amend their complaint accordingly from what we hear from outside council, it will add a little bit to our - not a tremendous amount, we think it’s something is going to get spread over probably six months to nine months, and it may range around $100 to $200,000 or so maybe little more just depends on what the different processes are.

[Unidentified Analyst:]

Okay. Got you. And that’s it from me. Thank you very much.

[Terry Lingren:]

Thank you. End of Q&A

[Operator:]

Mr. Lingren, there are no further questions at this time. Do you have any closing remarks?

[Terry Lingren:]

I do. I’m going to conclude hopefully both will have Slide 12, but we can do without that. I do want to recap our balance proposition. In addition to the cost and possible size savings or a single band product, potential customers are looking to Resonant’s capabilities to address the more complex filter requirements, which are being driven by the demand inherent in LTE and now LTE advance. These include carrier aggregation and [indiscernible] like I’ve mentioned before. These new requirements provide increased data throughput at the expense of more complexity in the RF front end. It is this RF complexity replaced directly to Resonant’s unique RF design capability which is flexible and systematic. Our team, our tools and our technology enable us to create solutions that optimize the entire front end system. Thank you for your time today.

[Operator:]

This concludes today’s teleconference. Thank you for your presentation. You may now disconnect your lines.