PRKR 2008 Q1 Conference Call


May 7, 2008


Paul Henning

Cindy Poehlman

Jeff Parker

Philip Anderson with Pinnacle Fund

Daniel Lewis with GEM Partners

Jim Whitton, with Laidlaw

Joe Graves

Bob Berlacher, Northwood Capital


Operator:  Please stand by we are about to begin.


Good day everyone. Welcome to the Parker Vision First Quarter Conference Call. Today's conference is being recorded. At this time for opening remarks and introductions, I would like to turn the call over to your host, Mr. Paul Henning. Please go ahead, sir.


Paul Henning:  Before we get started I want to remind 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 the actual results to differ materially from our expected achievements and anticipated results. Included in these risk factors are the visibility to maintain technology advantages of the marketplace, to achieve timely marketing introduction and acceptance of our products, maintain product copy protection and the availability of capital, among others. Given these uncertainties and the factors about our business, listeners are cautioned not to place undue reliance on any forward‑looking statements contained within this conference call. Further information concerning these and other risks, can be found in our filings with the SEC, the Securities and Exchange Commission.


We'll begin today's call with Cindy Pullman CFO, who'll review the quarterly results of the first quarter. She'll be followed by Jeff Parker, CEO of Parker Vision, who will report on the company's business activities. Cynthia, would like to go ahead?


Cindy Poehlman:  Sure. Thank you, Paul. Thank you to those joining us on the quarterly update call this afternoon. I realize that what you are all eager to hear about is not necessarily the dollars and cents on the financial statement, but rather the progress that we have made with current and prospective customers and how we feel about the business environment in general. So I promise to only spend a couple of brief minutes on the financial for this quarter and then I'll turn the call over the Jeff Parker for a business update.


We reported today a 19‑cent per share net loss for the quarter ended March 31, 2008, which is consistent with the preceding quarter as well as the corresponding quarter in 2007. Comparatively, from the first quarter of 2007 to the first quarter of 2008, we saw a 7.9% or $370,000 increase in operating expenses. These increases are largely the results of additions to our research and development resources throughout 2007, as well as increases in stock‑based compensation expense resulting from prior years equity grant.


We ended the quarter with 18.8 million in cash, which represents an increase of about 5.4 million over the year‑end, 2007 cash balance. This increase is due to the sale of equity securities during the first quarter of 2008. Partially offset by our cash usage for operations, capital purchases and patent assets during the same period. We are currently using approximately four million in cash per quarter for operating and investing activities. This number obviously excludes any offset from equity transactions, including the exercise of options and more.


We currently have approximately 26.5 million shares outstanding and another 6.2 million in outstanding options and warrants. These outstanding options and warrants have a weighted average of just over $23 per share.


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 the call over to Jeff Parker for an update on business development. Jeff?


Jeff Parker:  So thanks, Cindy, and, hello. I've really been looking forward to this conference call update with you today.

Although our last call was only seven weeks ago, we've really made a great deal of progress during that time period. Progress that will translate into shareholder value here at Parker Vision and so, I am pleased to provide you with an update.


I hope that after listening to today's call you will leave with updates on the following three categories. First I want to talk about the growing enthusiasm and confidence for our technology that we have as we're moving towards volume product and a better understanding and why we believe that we'll be widely adopted; in fact, in our view, adopted as a de facto for large segments of the mobile handset industry.

Secondly, I want to update you on our current progress with customers, both the existing and prospects. The strengths and the benefits of our technology are definitely becoming highly tangible and our ability to create strong customer relationships as a result of this.

And then the third category, I want to discuss the progress we are making on those previous topics. I'll end today with an update on our business models and my view of how this will translate into building shareholder value at the Parker Vision.

So, let's start with an update regarding progress on our technology. When I think about our technology and our progress in that technology, my enthusiasm continues to grow and I bring it into two areas of progress that I see; one area deals with the typical reality of our technology, meaning that the actual hardware itself and our advancement towards getting our technology into volume production.

The other area of advancement deals with the intangible area of our technology ownership, meaning the intellectual property or the patents. So let's start with the intellectual property. We're definitely seeing indicators that our patent portfolio itself continues to strengthen and become more valuable.

We were recently ranked by the organization known as the Patent Board as one of the top ten innovators in the telecommunications industry, based on the strength of our patent portfolio. The Patent Board is a patent advisory firm, they have track record of over 40 year in analyzing innovation and the business impact that patent assets represent on a global basis. The "Wall Street Journal" publishes their scorecard for 17 different industry checkers including Telecomm and Parker Vision was ranked as number ten right along with companies that include Cisco, AT&T, Nokia, Motorola, Qualcomm, Samsung, Nortel, and Erickson, so we're certainly pleased to be in good company with these other nine firms, who have brought significant innovation and the resulting value of their innovations to the telecomm industry.

Our inclusion in this listing with these influential firms is also our willingness to maintain a crisp focus on developing true breakthrough technology. While the sheer number of patents that we have compared to these other ranked‑firms is notably smaller, the other measurement metrics of our patents was significant enough to get us included in this top ten listing.

We scored particularly high in the categories of science and technology strength and research intensity. All of which are measures of how a patent portfolio is based on new core science and the linkage of that to above average science quality. We also scored high on the metric of industry impact, which is defined by the Patent Board as how influential a company's portfolio is on the development of technologies at other companies. We don't have access to their algorithms to calculate these metrics but we did speak with our representatives at the Patent Board to better understand the meaning of their metrics and the significance of our ranking. Their business expertise includes tracking the patterns that links certain aspects of patent to the probability for business success. Overall, they indicated to us that inclusion of the scorecard is a very favorable indicator of future business success.

One question that I've received is with regard to the category of industry impact. It's our understanding that this is measured based on the number of times our patents are cited both by others and from self citations. So what does that mean? Well, the Patent Board told us that Parker Vision appears to have the classic pattern of a disruptive technology, which is a very favorable indicator in their view. This is a pattern associated with many other successful companies. In such circumstances it's very common for both types of citations, especially when it's connected to science that is considered breakthrough technology. In essence who better to build upon core science than the original innovators? As the other companies decide our patents, this generally means that they are bumping into our innovations.

In our opinion, the more companies that bump up against our technology, the more the likelihood that companies will ultimately want to enter the business relationships with us in order to enable their own innovation goals. We view this very positive as an indicator for Parker Vision and our future.

Inclusion in the scorecard is obviously from an aggregate of a number of measures. Although we don't have the largest portfolio by sheer numbers our patent portfolio is becoming quite significant in our area of focus. We have 64 US patents now, 55 foreign patents and a little over 100 patents pending and still growing.

So that's the intellectual property part of our technology, so now lets' talk about the physical property and an update on how we are doing in advancing the volume production.

In my career I've had the good fortune of being involved in other innovations that went from the laboratory to volume production. It certainly is in this phase when a company is rewarded for having developed truly solid technology that isn't built on a shaky foundation. This is one of the many important areas that I believe our technology is going to excel at.

Fundamentally, what's unique about our V2P architecture and it's foundation to be robust and stable is the way in which we create the aural signals. We're able to combine the energy efficiency of non‑linear processing with the waveform quality achieved with linear architectures.

You know, if you were only concerned about energy efficiency and you didn't care about waveform quality, you would build non‑linear devises. If you were only concerned about waveform quality and you didn't care about power consumption, you would build linear devices.

However, our approach uniquely combines these two seemingly mutually exclusive domains in a way where both help each other for a very powerful result. I can certainly appreciate that engineering tradition causes people to want to live in one domain or the other.

However, this unique approach enables us to simultaneously achieve three important core values for wireless products; one... multi mode RF transmission through a single‑transmit chain... two... higher energy efficiency across a very large dynamic range of RF transmitted power... three... increased levels of integration and unparalleled system partitioning and packing options.

We added to our website recently a very nice grouping of screen captures from AVLIN Test Equipment for 2G, two 1/2G, three and 4G transmit signals. In a nutshell, what those screen captures show is just what I said earlier. The waveform quality for every standard shown is excellent or in other terms highly linear. For this quality you would expect to draw more not less power consumption than traditional devices.

Yet, for this quality, the power we used is far less than what traditional transmitters and power amplifiers that we replaced consume. All this test data came a single V2P RF chip, working in concert with our small digital phase machine. This technology can be applied and bring value to virtually any application for creating an RF transmitted signal.

Our focus in mobile handsets... These core values translate into lower build materials costs, smaller size, less internal heat, longer talk time, all simultaneously achieved. You've heard us talk about these values and benefits before, but I think it's important to impress upon you that as this mobile handset industry continues to grow and mature, that our core benefits also continue to grow in importance and value within this industry as well.
Along with it, our belief that our technology will become widely adopted and set a new standard for accessibility in the mobile RF product sales.

To end this section of our update, I want to mention two fundamental trends that I see in this industry. And how those trends are re‑shaping the landscape for who delivers the solutions and how this relates specifically to Parker Vision.

For the first trend... in the next few years over half of all the handsets built will incorporate many different modes of mobile phone standards. Some in the industry feel that the best way to address those modes is with lots of redundant circuits that are more cleverly packaged. Others in the industry, including Parker Vision, believe that new architectures, where the same circuits can accommodate many different modes will win the day. We see this trend throughout the systems that create a handset. From those who are investing in based‑end profits or architectures, it can essentially re‑configure standards without having redundant circuits to our ability to process any RF signal through a single chain and do so at a top side energy efficiency that is significantly better in traditional architectural approaches.

The second trend that we see... the next few years we see the continued move to common, high volume silicon semiconductors throughout the handset and away from exotic semiconductor materials. Our V2P technology enables the creation of RF, using common silicon semiconductors and accommodates the required horsepower output, the specs and the reliability for virtually every cell phone standard past, present or in the planned future. Now this is an important trend because many chipset companies both large industry incumbents and even the new entrants alike have the goal of creating single chip cell phones in the future, even for complex multi mode handsets.

Parker Vision technology enables the highest level of integration for multimode handsets that is currently possible and will continue to advance in ways that enable even greater levels of integration and highly simplified interfaces to the antenna. So these two macro trends of increasing mobile handset functionality and yet the drive to simplify the manufacture of these devises through the use of very high levels of silicon semiconductor integration are fundamentally in Parker Vision's statement.

One of the results of these trends is that companies are shifting towards higher degrees of specialization. They are increasing their focus. Handset firms are now largely focusing on the manufacture, the delivery, the form factors, and they have abdicated the development of chipsets to those firms that can focus solely on circuit and chipset development.

The handset industry is moving towards a more classic horizontal business model... towards specialization and away from the vertically integrated one‑company‑can‑do‑it‑all model. This trend is also greatly in Parker Vision's favor. As firms are looking to embrace the best‑in‑class solutions and away from the concept that they can do it all and do everything best. This is absolutely one of Parker Vision's competitive advantages.

So, now let's move on to the important topic of customer progress. We're very pleased to give you the status of both our customer relationship and with the progress that we have made towards designing V2P into their products. First, I'm pleased to tell you that ITT has identified the funded programs which it intends to incorporate the V2P technology. ITT has been able to use V2P in their own labs and generate RF transmitted waveforms that meet the customer requirements of what they are targeting as their first application.

They have shared with us that they are impressed with the performance and the efficiency of the technology. They, along with us, are a big fan of the ability to build these kinds of RF systems using highly integrated silicon semi conductors. So, the platform technology V2P continues to demonstrate all the flexibility and all the robustness that we have expected. It enables ITT to use the technology across a number of product lines. We are extraordinarily pleased with our progress at ITT. We certainly thank them for their continued enthusiasm and support. With programs being identified, we are bullish on both shorter term as well as the long‑term prospects for our business relationship with them.

With regard to our first commercial customer, developments are going right on schedule. One of the milestones that I was really looking forward updating you on today is a product development milestone that was established for completion in the first quarter. This milestone was to interface our V2P development platform with the rest of the complete mobile phone chipset with the purpose of completing what's considered a very important milestone in this type of product development program. And that's namely the ability to use V2P to make actual 3G phone calls. The development platform I referred to uses a fully integrated V2P RF chip, a volume ready version of this chip is what will actually be used in it. There is a small digital state machine that bridges between the cell phone face scan processor and the V2P RF chip. And our state machine today is what is called an FPGA or a field programmable gate array. Remember, we're an IT vendor and this part of our technology is perfect for small geometry CMOS. So, this allows us to develop and test our interfaces, verify the real time phone calls and then using that FPGA verified code, a wide range of digital CMOS processes can be used to quickly incorporate our digital section.

Working closely with our customer we've been able to use V2P to verify its performance in actual 3G phone calls. Together we achieved this milestone and we did it right on schedule, literally without any meaningful issues. In fact, our customer commented at the ease in which this occurred. They commented that based on prior experiences that it wouldn't be unreasonable to expect a week or more to iron out unforeseen issues when an actual 3G call was made. In reality, it took us one day. That's exactly one day, from the time that the V2P was delivered, until successful 3G phone calls were being made; certainly a positive indicator about the foundation of our technology.

A few other important items that I've been looking forward to sharing with you... in addition to achieving successful 3G calls, the performance figures of merit of our transmitted signal exceeded both our own and our customer's high expectations. You know, it's not unreasonable to wonder when you are thinking about the new technology: how well will it work when it is applied in real application? Well, we'd expected good performance. However, we were all very pleased that the figures of merit achieved exceed even both our expectations and our customer's high expectations.

One specific performance example that I'll mention is efficiency. Using traditional transmitter and PA approaches, you would expect to consume a lot of power to achieve better than expected specs. The customer commented to us on how cool to the touch the V2P chip operates, especially when they're used to dealing with the heat that is common with the traditional gallium arsenide power amplifiers that they currently use.

The efficiency for 3G that we put up on our website was right in line with what's being consumed. Simultaneously, was providing excellent quality 3G transmitted waveforms. One of the positive indicators of this achievement is related to volume production. Since we aren't working with a technology where we are just squeaking by on the specs, it's a very positive indicator when one thinks about moving this technology into volume production. So, we were and we are ecstatic. The customer made it clear that we have exceeded their expectations thus far in the relationship, which is certainly one of our primary objectives. So, what are the next milestones?

Well, we are focused and moving post haste to take out what will be volume producible silicon. Our target is delivering that in the fourth quarter, which we mentioned to you in the last call, has not changed. We're right on track for that and I'll keep you updated on the progress of that milestone in future calls.

So, we believe there's tremendous growth potential of this first commercial customer. Together, we can bring valuable improvement to the handset market that I believe enhances the prospects for both of our companies.

We talked about our first two customers and I'm sure that anything you want to know: so how are we coming on next prospects? Well, one of the reasons I went into this detail today regarding the currents customers is that we are certain that the progress and success we are having with these first customers, in terms of meeting and exceeding timelines and expectations, is a big influence on driving additional business. The more tangible our progress is towards delivering volume production silicon and delivering on the promise, the lower the risk becomes in adopting our technology. We're in the middle of a very promising dialog with a number of companies in the local handset space.

I am very confident that some of these will convert into our next design wins and business agreements. How confident are we? As I said in the past, we believe these next wins are a "when" not an "if" proposition. We continue to largely focus our efforts on companies who are shipping in volume... typically measured in the millions, in fact, tens of millions of shipments per month. As one would expect, there is a great attention to detail by those types of firms. As we all know, the barest entry in this very large marketplace can be permitable. The improvement in progress from and our growing momentum is certainly helping us overcome those barriers.

We've really overcome what is, in my opinion, the single most difficult first barrier to entry. We've got our first commercial customer. And we're now able to actively discuss the benefits of our technology in real application. When companies believe that your technology can really do like a bat in volume, deliver the benefits of longer talk time, smaller batteries, less internal heat generation, and all what those benefits do, they help enable the next form factors that OEMs want to develop which are small and sexy and do more things; it's clear to people this is a very important and desirable technology.

For OEMs they enjoy what we bring in benefits in the form of lower build materials cost, more control over their entire chipsets. Those are real tangible competitive advantages. For their business, we'll translate the market share. We'll translate in the margins and give them an opportunity to be even more positive influencers in this industry.

So, I believe the various entries are starting to reduce, because we can see the move towards volume. We will secure agreements with our new customers in the near future.

The last topic I want to discuss with you regards our business model. So the technology is very strong, it is ultimately the widespread adoption of our technology that will be the measure of how much value we can create.

In our last update, we shared with you that we believed we could gain adoption that would put us at a market share run‑rate late next year that's in the high single‑digits, perhaps the low double‑digits, as measured against the 3G handset market. That market next year is forecast to be in the 500 million unit range and growing the following two years by another 50% to about 750 million units annually. Based on the progress that we have been making all that's going on, I continue to stand by that belief.

Today, I want to provide additional visibility to our goals. Given the strength of our technology, the needs of our targeted market, I believe it is reasonable to expect Parker Vision to target and achieve shared market penetration that will incorporate our technology into a third or greater of the 3G and emerging 4G handset market, and to achieve that goal in the next few years, two or three with continued growth, which will put us well on our way to achieving our vision of becoming a de facto standard in that important space.

By the way, that marketing option translates to around 15% of the overall total handset market. Given a reasonable range of royalty expectation and assuming that Parker Vision has 30 million shares of stock outstanding, I believe this will translate into an annual result of $2 to $3 dollars a share in pre‑taxed earnings for the company. You should apply your own multiples of that to determine what you think that can translate to in terms of value. I believe if we continue to run a tight ship, maintain focus, build the kind of customer relationships that we're building now and will adding to it in the near future, this is the kind of value that we will achieve.

I also believe that there will be some helpful upside to our results that will come from our first customer, ITT, who is not in the mobile handset space. And sure, while their volumes will be lower, their per‑unit royalties will be significantly higher than handsets. Incorporating royalties from ITT will provide extra momentum to our revenue growth. There are other possible adoption scenarios, where different adoption metrics can lead to the same or even greater shareholder value. But if you want to know what my best estimate is right now, based on what is going on, where we're at, what I see, that's where I believe Parker Vision is headed over the next few years and how we'll get there.

So, although our near term focus is in the handset market, I would be remiss if I didn't mention I can envision further growth prospects, due to the robustness of our technology that I think will come from other areas where our technology is equally attractive... down the road. So I hope that you found this update today to be helpful and informative. I believe that Parker Vision is very well positioned to take advantage of the trends we see emerging in our market.

The key for Parker Vision is to stay on course, capitalize on the opportunities we have in front of us. I know I can speak for CFO in saying that she is really looking forward to the day that she gets a lot more airtimes on these calls to discuss financial results with you. I second that.

So now I want to thank you for your attention and I would like to open this call up for your questions.

Woman 1:  Thank you Mr. Parker. The Question and Answer session will be connected electronically. If you would like to ask a question please do so by pressing the star key followed by the digit one on your touch‑tone telephone. If you are using a speakerphone today, please make sure that your mute function is turned off to allow your signal to reach our equipment. Once again, that is Star‑1 to ask a question. We will pause for just a moment to assemble the queue.

[waiting to resume]

Our first question will come from Phillip Anderson with Pinnacle Fund.



Phillip Anderson:  Jeff, how are you?


Jeff Parker:  Hello, Phillip.


Phillip Anderson:  I wanted to... not much as a question but to summarize I heard your final comments clearly. Which is, you mentioned that with your current customer and the prospects that you are confident you are going to sign in part because the progress you have made with your current customer, in effect, you made a phone call; it worked. It was much better than anybody had thought it was in terms of the performance of the phone has brought down the adoption risks of people that you have been working on, to bring in the customers. But you mentioned that the prospective... I think what you said... the prospective customers are selling tens of millions of chips per month. I just want to ask you to clarify that. Would that be the prospective customers who you are talking to, or would that be the OEMs which purchased the products from your prospective customers?


Jeff Parker:  Phil, you got that all correct in the prospective customers that we're talking to are shipping tens of millions of products per month to their customers, which are either ODMs who are building the handsets or OEMs who buy them directly and have them built.


Phillip Anderson:  If in fact the market is going to be 500 million units in 3G phones in 2009, is that between your current customer and the prospects that they would aggregate to the middle of your range would be about 10% of the market? Would I also get that correctly?


Jeff Parker:  Say that one more time, Phil.


Phillip Anderson:  OK. So, I think that you said that the market for 3G phones in terms of units next year is expected to be about 500 million units.


Jeff Parker:  That's right.


Phillip Anderson:  And that you gave a range of high single‑digits to low double‑digit market participation or market share...


Jeff Parker:  That's right.


Phillip Anderson:  I just picked the middle of the range 10%. So the prospects that the customer you have and the prospects you are talking to, would aggregate in the middle of the range to about 10% of that market last year.


Jeff Parker:  Yes. Their share of market is even larger than that. Yes. That's what I think. There's legacy products that they'll have to work through. People won't just go out and take old phones and redesign them. They will be designing the new phones but, yes, that's correct.


Phillip Anderson:  So their share of the market is much larger but your participation in their business...


Jeff Parker:  Exactly.


Phillip Anderson:  Equates to about 10% of the market next year, which is the middle point of the effect the market share guidance, which you just gave.


Jeff Parker:  You got it.


Phillip Anderson:  And that in 2010, that their participation in whatever the 3G market is in 2010, would rise and pulling you with them to about a third of that market.


Jeff Parker:  That's exactly correct.


Phillip Anderson:  Which, in effect, would give you the $2 to $3 a share in untaxed earnings that you commented about.


Jeff Parker:  That's right.


Phillip Anderson:  Given the large NOL here, we are not going to be a tax payer for quite a while.


Jeff Parker:  That's the benefit of that. We've seen that at cost, now we'll enjoy the benefits.


Phillip Anderson:  I think those are all the numbers that the shareholders have been waiting to emerge. If you, in fact, are on target to having your customers begin shipping phones in the fourth quarter, the emergence, the long awaited emergence, would seem to be at hand finally, Jeff.

I just want to make sure I got it, because those were big numbers and I was typing quickly, but zero sounds encouraging.


Jeff Parker:  Well, Phil, you got it. And finally we have enough visibility to be able to be able to communicate that. So, I appreciate your patience in staying with us.


Phillip Anderson:  You've got no idea.


Jeff Parker:  Oh, trust me, I do. Anyway, let's take the next question. Thanks, Phil.


Woman 1:  Thank you. Once again, as a reminder to our audience that is Star‑1 if you have a question or comment today.

[waiting on call]

Our next question will come from Daniel Lewis with GE and Partners.



Daniel Lewis:  Good afternoon, Jeff and Cindy.

Jeff and Cindy: Hi, Dan.


Daniel Lewis:  How you guys doing?


Jeff Parker:  We're doing very well. How about yourself?


Daniel Lewis:  OK. Couple questions here. Again to go over the numbers that you provided and thank you for doing so. You said that penetrating one third of the 3G market would net you something between $2 to $3 a share?


Jeff Parker:  That's right.


Daniel Lewis:  So, is it fair to assume that that... so one third of the market would be around 250 million units?


Jeff Parker:  That's right. Yeah.


Daniel Lewis:  And so is it fair to say that your average royalty per phone would be around 50 cents a unit; given that presumably you're operating expenses wouldn't go up much. So if you got 220 million of revenue with 30 million of expenses, 99 are pre‑taxed, would get you $3 per share pre‑taxed?


Jeff Parker:  You know, you're good at the math and you're right in the right category. As far as what the per‑unit royalty will be, Dan, it's going to definitely range with the feature set of the phones. But your blended average you are thinking of is in the ballpark.


Daniel Lewis:  OK, all right. I just wanted to go over that. Does that assume low‑end phones, single mode phones or does that assume...

Jeff Parker:  It assumes what we think will be a pretty broad range of those types of phones. Yeah, let's just leave it at that. It's a range of phones that we think we'll end up in.


Daniel Lewis:  OK. In terms of competitive offerings that OEMs or chip companies are considering...


Jeff Parker:  Yes.


Daniel Lewis:  ...can you... and I know in the past you've spoken about that there really hasn't been any solution that has been terrible or is as good. I know one example of a company that is trying to offer better solutions in the space of the company called Sequoia Communications. When you talk about the attempts within the space to making things better and what kind of receptivity the industry has had with these prospects and the degrees to which these alternative technologies have been or have not been embraced?


Jeff Parker:  Sure. I'll try to do that. So, specifically, on Sequoia... I don't know much about their product beyond I've seen it at trade shows from time to time. I've read a little bit about it, what you can pick up off the Internet.

And it's a transceiver product, so unlike what we do, which is taking signals from the base stand right to the RF at tower, their approach from a block diagram standpoint is more of a traditional, "Here's a transceiver and then here's a linear power amplifier that is bolted up to that." And you would end up with the various numbers of power amplifiers that you would see in any typical phone fielded today. So from that perspective it doesn't really have much difference from what we see a lot of other offering look like from that level.

Again, I'm not into their circuit development level. I don't know what maybe some of their tricks of the trade are. But, again, we have chosen not to go with the transceiver, separate PA route, but to unify that function for all the benefits that we can rank.

In terms of what we've seen in the market, I still don't see anything, Dan, that is an advancement in the transmitter technology that does anything close to what we do. The trend that you see today has, as I mentioned before is toward moving things to volume silicone, trying to make tightly coupled integration of the whole chip set, people thinking about moving the single chip. When you think about all those trends, where our technology... you can check every important box on that.

I've seen some attempts at some CMOS silicon power amplifiers for like GSM. They tend to be large. We really haven't seen any wide spread adoption of something like that. People who are looking at... at least the customers we're talking to when they look to adopt something different, new, novel... it's got to give something that they can't do on their own. You can't give something with the left and take two things away with the right.

It's got to be that you're really making advances towards securing important features that they are looking to achieve. We have been in this market long enough to know what those are and be able to hit on those important metrics. That's what's influenced this whole technology development program here.

So, that's pretty much it. Unless you have something specific, other than that...


Daniel Lewis:  OK, I'll go back. Thank you.


Jeff Parker:  Thanks, Dan.


Woman 1:  Thank you. Once again as a reminder to our audience, that it's Star‑1 if you would like to ask a question.

Moving on, our next question will come from Jim Whitton, with Laidlaw.



Jim Whitton:  Hi, Jeff, very good presentation.


Jeff Parker:  Thank you, Jim.


Jim Whitton:  One question, which I see all the time from my critics. When are we going to start seeing some technical publications on the technology? Thank you.


Jeff Parker:  Thanks, Jim. No, that's a good question. You know, beyond the information we currently put on our website, I really think the next thing that shareholders can put their arms around and will make a big difference, is going to be products. Things that you don't have to be an RF circuit designer to have an appreciation for.


We do have in motion opportunities we think that will get out and help promote the technology from its benefits standpoint, from its business standpoint. But down at a level that would be really a circuit designer's level or an RF engineer's level, that kind of information we really don't intend to put in public domain. It's not probably in our best interest, competitively. You certainly don't see our competitors do that. And frankly, I think a lot of the information we put up on our website already is frankly much more than you can get with competitor's websites.

So, to the extent we can bring our shareholders and the public in general information that is valuable guidance, in terms of feature benefits, the adoption we're getting. Ultimately, so you guys will get your hands on products, or have reviewers review products, that have our benefits incorporated in them. I think that's going to be really the best feedback for you guys are probably going to be able to get.

One last comment I will make. When we spoke on this topic... I guess it was late last year... one of the things I suggested was that, hey, on our website we are going to put up information that shows our performance of our waveform. Check the box, we did that. We're going to show you our efficiency. Check the box, we did that. We're going to show you that a single chip can do all these things simultaneously, yep. Check the box we did that.

I think the only thing, frankly that is still sitting out there is we said, "Hey we're going to give you guys feel for how to fit into applications," and we will work on that. We'll pull that together so you guys can get a little bit better about a block diagram, a circuit block to understand how this fits into handsets and those types of wireless applications.

Does that answer your question? Well, Jim, I think we just lost you.


Jim Whitton:  Do you hear me?


Jeff Parker:  We can now.


Jim Whitton:  Yeah, that does answer the question. One other little ancillary question and that is... you used the number 30 million shares, is that fully diluted, by any chance?


Jeff Parker:  No, I think as Cindy mentioned in her presentation... we have a little over 26 million outstanding today and there's another six million and change they are in the $23 a share average strike price.


Jim Whitton:  OK, thank you.


Jeff Parker:  You bet.


Woman 1:  Thank you. Moving on. Our next question will come from Joe Graves.



Joe Graves:  Hey, Jeff.


Jeff Parker:  Hi, Joe.


Joe Graves:  My question is regarding, what are the potential customers saying about the progress you have made with your existing customers? The reason I ask is are you able to share some of these test results that you're seeing with the 3G handsets with some of your potential customers? And then I would like you to elaborate a little bit more regarding ITT. I actually had to jump off the call for a second. But I may have heard you correct. Did ITT actually use the technology in some of their products?


Jeff Parker:  Well, ITT has used the technology now to show their customers what they are going to be getting in products that will be designed.


Joe Graves:  So it would be fair to say that ITT uses the value proposition to secure business, right?


Jeff Parker:  Yeah, that's fair to say that and in terms of our ability to share information, yes. We can share with other companies, hey we've made these calls, our customers made these calls, here's some of the figures of the merit. We have to use what I would consider good taste and we can't give out confidential information, but our customers are very supportive in terms of wanting our company to be successful. They got a nice lead on the competition and, yeah, they're very enthusiastic for what's been achieved to date. I think we fully expect us at some level, share of the performance, etc. that we have been able to achieve.

Frankly, Joe, with other OEMs, we can do these same kinds of calls on their own shift ups relatively quickly. So that's the other good news I hope you guys will take away. I mean, this is really moving now away from innovation development into more of the traditional engineering/design‑end type of activities.


Joe Graves:  And then, one more question just regarding some of your assumptions for market share. That assumes only revenues derived from what would be the amplifier business. Would that be transceiver and receiver related technologies?


Jeff Parker:  It's a blend. It's a blend. We believe there will be others who... just as the first customer did... who will adopt our receiver technology as well. But we don't assume it will be 100%.


Joe Graves:  All right. Thanks.


Jeff Parker:  Thank you.


Woman 1:  Thank you. Moving on, our next question will come from Bob Berlacher with Northwood Capital.



Bob Berlacher:  Hi, Jeff, it's Bob Berlacher.


Jeff Parker:  Hi, Bob.


Bob Berlacher:  You answered part of my question with Phil's question. But to follow up on that, will the company put out an 8K? Because this is kind of the first time you have given what I might call informal and formal guidance for earnings. Will you be 8K‑ing this conference call or the Q&A or both? Because I think that would be beneficial.


Jeff Parker:  You know that's a good question. I didn't think about that, but we'll counsel with our... we'll check in with our council, we may very well do that.


Bob Berlacher:  I think that would be a good move.


Jeff Parker:  OK, well, appreciate that. I appreciate that feedback. Thank you.


Bob Berlacher:  Thank you.


Woman 1:  Thank you and it appears we have no further questions. Mr. Parker, I would like to turn the call back over to you for any further comments or closing remarks.


Jeff Parker:  My only comment is again thank you for... to our shareholder supporters for your support. You have been no small measure of us being able to stay the course to be as far as we have gotten. We are on a very good track right now.

I look forward to our next conference update and to what I think will be a number of significant events that will occur this year.

So, have a good evening. Bye‑bye.


Woman 1:  Thank you. Ladies and gentlemen, that does conclude today's teleconference. We would like to thank everyone for their participation in today's call. Have a great rest of your day.