Good day, and welcome to the Immersion Corporation fourth quarter earnings conference call. Today’s conference is being recorded. At this time I would like to turn the conference over to Jennifer Jarman. Please go ahead.

Thank you, operator. Good afternoon, and thank you for joining us today on Immersion’s fourth quarter and fiscal 2014 conference call. This call is also being broadcast live over the web and can be accessed from the Investor Relations section of the company’s website at www.immersion.com. With me on today’s call are Vic Viegas, President and CEO; and Paul Norris, CFO. During this call, we may make forward-looking statements, which may include projected financial results or operating metrics, business strategies, anticipated future products, anticipated new markets, market demand or opportunities and other forward-looking topics. These statements are subject to risks, uncertainties, and assumptions. Accordingly, actual results could differ materially. For a listing of the risks that could cause this, please see our latest Form 10-Q filed with the SEC, as well as the factors identified in the press release we issued today after market close. Additionally, please note that during this call, we may discuss non-GAAP financial measures. For each non-GAAP financial measure discussed, a presentation of the most directly comparable GAAP financial measure and a reconciliation of the differences between the non-GAAP financial measure discussed and the most directly comparable GAAP financial measure is available in today’s press release. With that said, I'll turn the call over to Chief Executive Officer Vic Viegas. Vic?

Thanks, Jennifer, and thanks, everyone, for joining us this afternoon. We were pleased with the accomplishments Immersion made throughout 2014, which resulted in record revenues and continued profitability, a strong customer base across our vertical markets, and the introduction of new haptic solutions targeted toward the broader mobile video and advertising ecosystem. In the last quarter of 2014, we generated record fourth quarter revenues of $13.6 million, reflecting growth of 13% from the year ago period and representing the eighth quarter in a row that our quarterly revenues set a record for the quarter. Aided by these Q4 results, our annual revenue for 2014 totaled $52.9 million, which is an all-time high for Immersion, up 12% from 2013. Net income for the fourth quarter was $1 million, representing Immersion’s eighth straight quarter of profitability. In 2014, our customers adopted innovative new haptic use cases in their products as they and other technology leaders increasingly recognize the value haptics brings to the consumer experience. We also achieved key milestones that have established the foundation for future growth in the immediate and long term. These milestones include renewing important existing mobile license relationships such as our agreement with LG Electronics in Korea and entering into new agreements with key mobile OEMs such as Huawei in China and since the end of the year, Meizu and [Jawanee] in China. Lunching our TouchSense Engage solution for mobile video and advertisers to create haptic content with Showtime as our launch partner promoting its award winning television show. More recently, we announced further progress in our worldwide content and media initiative through our first tactile video program in China with LETV. In addition to these announced relationships, we have numerous activities underway with game developers, video developers, social media services, ad agencies, ad networks, and mobile app publishers and developers. Continuing design wins in our automotive business, including new implementations and broader deployments with Audi, Mercedes, Acura, Cadillac, and Lexus as well as new agreements with major tier suppliers Continental and Tokai Rika, and investing in our organization to capitalize on growing business opportunities and strengthening our executive team and board of directors with the addition of Jason Patton to lead our mobile content and media business, Mahesh Sundaram to lead our worldwide sales efforts, and Dave Habiger and John Veschi to add their knowledge and expertise to our board. In a few minutes, I’ll discuss our recent business developments and expectations for 2015, but first, I’ll ask Paul to review the details of our fourth quarter and fiscal 2014 financials. Paul?

Thanks, Vic. Revenues for the December quarter were $13.6 million, a record for Q4 and up 13% from revenues of $12.1 million in the year ago period. Revenues from royalties and licenses of $13.3 million were up 15% from royalty revenues of $11.6 million in the fourth quarter of 2013. Of these amounts, in the December quarter of 2014, variable royalties based on shipping volumes and per-unit prices totaled $5.9 million and fixed payment license fees totaled $7.4 million. This compares to variable royalties of $3.8 million and fixed license fees of $7.8 million in the December quarter last year. While revenue mix per line of business is expected to fluctuate on a quarterly business due to seasonality patterns, for the fourth quarter of 2014, a breakdown by line of business as a percentage of total revenues was as follows: 63% from mobility, 28% from gaming, 5% from auto, and 4% from medical. Gross profit was $13.5 million or 99% of revenues compared to gross profit of $12 million in the fourth quarter of 2013. Turning now to operating expenses, excluding cost of revenue, total GAAP operating expenses were $12.3 million in the fourth quarter of 2014, compared to $11.3 million in the year ago period. Operating expenses in the fourth quarter of 2014 included noncash charges related to depreciation and amortization of $148,000 and stock based compensation of $1.2 million. Of the noncash charges $378,000 were included in sales and marketing, $307,000 in research and development, and $687,000 in G&A expense. Litigation-related expense for the quarter was $1 million, up from $627,000 in the fourth quarter of 2013. Net income for the fourth quarter of 2014 was $1 million, or $0.04 per diluted share, compared to net income of $37.4 million or $1.26 per share in the fourth quarter…

Thanks, Paul. As I mentioned earlier, we’ve been pleased with the accomplishments Immersion has made in 2014, which have resulted in a broader global footprint and customer base, as well as record revenues and profitability. During the year, we strengthened our IP and software solutions and grew our team to help us execute on the wealth of opportunities we see in 2015. I’d like to review those accomplishments with you and share our outlook. As the leading innovator in haptics, we’ve established a strong IP portfolio and industry leading software solutions based on our innovations. Through our 20-year history, we have evangelized the power and capabilities of haptics in different consumer markets, including console gaming, mobile UI, games, ads, and video, as well as automotive HMI, virtual reality, and wearables. Many of our ideas are ahead of their time. We understand that as a forward-thinking innovation company, we are the torchbearers for haptics and have a responsibility to seed the market with ideas and work with partners to realize our vision. That is one of the reasons why 2014 was an exciting point in time in the company’s history. During the year, we saw many of our new and existing customers adopt haptics in areas beyond touch confirmation. Industry-leading customers such as Samsung created rich tactile experiences in its Note 4S pen, using haptics to not only improve the usability of this important feature, but also using haptics to create realistic textures for drawing. Huawei, in its Honor 6 phone, used haptics to enhance novel aspects of differentiated applications, like feeling the glass crack in the mirror application and enhancing the retro and physical feel of the camera. These are just a few of the growing high-value use cases that are gaining traction in popular mobile applications today. We are…

[Operator instructions.] And we will first go to Charlie Anderson of Dougherty & Company.

I wanted to start out with just a question about cash. You guys, as of yesterday, you’re up around almost $3 a share in cash. What might be kind of uses of cash? Is it continued buyback? Your guidance assumes that your share count is up year over year. Just give us some color there around your cash and buyback. That would be helpful.

I think we look at the buyback in a very similar way to the way we have all along. We think it’s a good investment in Immersion, and we think the price is a reasonable one to be buying at. So I don’t know whether we’ll buy at the same rate as we did in the past year, but again, we continue to look at that as a viable use for our cash. We do have seasonality around when the cash comes in the door, so as you undoubtedly noticed, the cash balance is up from the end of the year. And that’s due to payments that come in at different times over the year, and as some of them come in early in the year, we recognize those over the rest of the year and use some of the cash during operations. So again, I would expect to see a somewhat similar profile to what we had last year.

And I would just add that having cash on the balance sheet’s an important part of a strong licensing program, and as we need enforcement actions or such, having plenty of cash on hand is a good thing.

I think assumed in your guidance, Vic, you’re up about $7 million or so year over year in absolute dollars in opex. Can you walk us through where those increases are coming and maybe isolate litigation versus non-litigation? And then also, maybe on sales and marketing versus R&D, some of that breakdown would be helpful.

Sure, let me answer that, Charlie, if I can. Looking at litigation first, I think you will see a bump up in G&A expenses this quarter in particular, since we have our trial slated for the last week in March. So that will be particularly high, and then it should moderate during the remainder of the year. Generally, what’s driving the increase in opex is our investment in headcount. That’s our main expense. And we have grown to be 141 people at the end of 2014, which is up from, I believe it was 112 at the beginning of the year. So we’ve got a higher number of employees that will be onboard for the year, and we’re going to continue to invest in areas like our content initiative as we go through the year. So the breakdown as between the various categories, I would expect that most of the new headcount and a good bit of the headcount that we have added over the last little bit is in the sales and marketing and some in the research and development area, with less in the G&A category. And those are the main drivers that we’re looking at in the next four quarters.

And then tacking on to that, I think at your last investor slide deck, you had talked about a long term range for opex of 49% to 54%, so kind of at these levels where looking at a long term revenue at this level of opex at $90 million or so, do you assume that after this year, we’re kind of at that level, and can you scale very quickly to those kind of revenue levels? Have we changed the long term opex or margin model?

I think the long term model is the same. We have not moved the top line revenue in our guidance sufficiently to make the margins move in the direction of the long term model for 2015, but as we generate more revenue in future years, it should move fairly quickly to 49% or the long term model that you’re looking at in our investor presentation.

And I would say that we’ve made a large portion of the investment already in terms of expanding our sales and technical support in the field, so we feel like we can canvas the marketplace effectively with the team we have today. As Paul mentioned, we have added resources specifically in the content space, primarily because the interest level is so high. So these are people engaged specifically in gaming, social media, and in the video space. Part of our goal and the things that we focus on is also expanding our ecosystem and part of that ecosystem effort will be to provide design services and capability, use our tools, to provide haptics in this content. So we’re, again, trying to leverage our talents, tools, and resources and use some of the ecosystem resources in the marketplace. So we’re still very comfortable with the model. Right now, it’s a short period of investment and we believe it will be a long period of payoff.

And just maybe one last one for me to help us on that. It’s obviously going to be sort of dilutive to your earnings. I imagine it’s very little revenue from sort of content and media today. Could you maybe describe how much of your total opex is associated with content and media, so we can kind of think about these as maybe a sum of the parts, where your device business is worth something, but then your media business is worth something else, so that we don’t apply that drag to your device business, if you will.

We don’t really separate out, in any precise manner, the exact resources devoted to each of the efforts. I will tell you that a fair portion of our OEM sales and field support are also actively engaged in promoting haptics with the content community. So it’s a hybrid. They’re providing services for both. We have a content team that is focused on creating content so that these pilot studies can be conducted and analytic data can be captured. And so in a lot of ways, there’s an overlap of resources, and I would imagine, over time, and I know how we’re running the company is that we see the synergies and the intricate nature of bringing content and the OEM business really together. With that said, I would say, as I have in the past, when I break down dedicated resources from a technical side, from a specific focus on content, I’m guessing that the number is about a third. A third of our overall headcount and resources is being focused on content, with two-thirds focused primarily on the OEM business.

We’ll now go to David Williams of Ascendiant Capital.

The first question I had is just kind of looking at the breakdown between the different segments, it looks like mobility was down about 2% this quarter, and then gaming looked like it was up about 22% on a year over year basis. And I know in the past, I guess last quarter, you had talked about some of the third-party periphery makers for the consoles hadn’t released those yet for market. So I was just kind of curious if you could kind of walk us through what the puts and takes are for the mobility being down a bit this quarter but a little better in the gaming revenue. Is there anything that’s changed in that model? Is it just timing, or was there anything specific that you could point to?

My numbers show that mobility was actually up the fourth quarter over the fourth quarter of 2013 by about 16%. So I think for the quarter, it was up. I don’t know exactly where it was compared to the third quarter.

I think it’s up about 8% over last quarter, sequentially as well.

And for the year I know it was up as well.

All right. I may have a bad number there, so my apologies for that. Thanks for the clarification.

Okay, so mobility’s up, and then I think you did highlight that gaming is up substantially, and that’s primarily from the benefit of the PS4 launch and the controller business that we’re getting from Sony, primarily.

And what does that cycle typically look like as far as that revenue change that comes in? Do you get a big boost in the first? And how long of a ramp do you typically get out of those gaming type devices?

You’ll see our mix of revenue in our first quarter has relatively more royalty per unit type revenue in it. And that is based on holiday sales of, among other things, gaming products. We did, a year ago, have the benefit of not only the normal holiday season, but the first launch sales that Sony had around the PlayStation 4. So that was more of an impact than you would expect after a year. After a year or so, typically what happens is that the purchases of the full units of the console and controller tend to subside. There’s a greater attach rate on separate controllers, people who want to buy a second or third controller to use with a console that they’d already purchased, or to replace one over time. And then you start seeing the third-party peripherals entering the marketplace, which is an additional revenue opportunity for us. In this case, with the new launches, the two first party sellers that we worked with, Microsoft and Sony, have held onto the controller business longer. So it’s a little bit pushed out as far as when we’ll see the third-party controller sales really benefitting us. But we’re now expecting, especially on the Microsoft side, to see some of those products hitting the market in time for the holiday season coming up in 2015.

And I would add that we see this continued trend for the next three to five years as this platform continues to proliferate, and then as it moves towards the end of its cycle much further out, then there would be incentives to launch a new platform, which is how the industry typically goes. David, I’d also use your question to maybe highlight, as Paul was explaining, it’s for these reasons that we actually see 2015 being a little less seasonal than normal, because if you look at the benefit from the PS4 launch and the revenue derived in the first quarter of 2014, we are looking at a very good Q1 of 2015, but I’m not sure that you’ll see some of the same seasonality where Q4 is typically substantially bigger than our other quarters. I think you’ll see a more leveling throughout the year.

And then lastly for me, I know that there’s been some discussion about the potential to license Lenovo with the Motorola acquisition they had earlier. Knowing that Motorola is already a customer, can you give us any color around how those discussions maybe with Lenovo have been trending and any expectations there, or maybe thoughts around that?

Sure, we’ve had quite a bit of success in China. It’s been a focus of ours for a while. We are enjoying the relationship with Xiaomi, Huawei. We just announced and are talking about Meizu and [Jawanee] as well. The remaining candidates are those that you would expect. Lenovo is one of them. We have active discussions with them, ongoing development efforts, and our hope would be someday to license Lenovo. But our relationship with Motorola is specifically for Motorola branded products, and we would hope to enter into a license agreement directly with Lenovo at some time.

And the other thing I would add is that I believe Motorola has done even better than Lenovo may have expected. The volume from Motorola is higher than it’s been in prior periods, and since the acquisition by Lenovo, Motorola has actually announced, I think it’s three phones for the China market. And I believe that Lenovo is going to, at least for the time being, run Motorola separately as its own entity, to take advantage of its brand. So we’re feeling pretty optimistic and good about the Motorola business over the next year or so as well.

We’ll now go to Josh Nichols with B. Riley.

A couple of questions. I guess I just want to start off on some guidance for some things. So, looking at the bottom line guidance, it seems like, to get there on the low end, right now opex in Q4 was $12 million, 46% for fiscal year 2014, and it would need to jump all the way up to about $60 million to get to the low end of your guidance. Under what scenario would that happen?

Really, there are two factors that go into our opex that are major to consider. One is litigation and the other is headcount. We added headcount during the course of 2014. Kind of over the course of the year, added the incremental headcount, so we didn’t have it for the full year. That headcount will be with us for the full 2015, so if you’re looking at opex, aside from any extra litigation expense in the first quarter, I think it might be a run rate of about $13 million rather than the $12 million in Q4. And then again, as I mentioned earlier, I would expect to see opex be a good bit higher in Q1, simply because of the HTC trial. I think if you take all of that out, that will take you to over $50 million in opex. We have a few levers we can pull and litigation expense, we don’t have that yet, so the variability around that could easily take you to $50 million.

And then just looking at the revenue guidance, I was wondering what’s really built into that number? What assumptions are behind it, and did anything fall out?

I would say nothing fell out. This is our first establishing guidance for 2015, so it’s the first guidance we’ve provided. The guidance does not anticipate any significant increases in new licensees or significant design wins, so it’s not capturing anything that’s either not already achieved or we believe is conservatively achievable. So it’s a good estimate based on most of the business we have in hand today.

So, I would think a lot of it’s really just like the LG increase that came in, like, the back half of the year, right, if there’s no major deals or upsizes in Huawei or anything else coming down the pipe, right?

So if you look across the four verticals, I think we still expect growth in all four verticals. Gaming, auto, and medical are primarily per unit fees, so we expect to see increased volumes there and driving increased revenues. On the OEM mobile side, I think we have already in place most of the contracts we need, and it’s assumptions based on their volumes, including the LG agreement, including some of the product launches we’d expect from some of our new Chinese OEMs as well.

So the company’s been an aggressive buyer of its own shares. It’s always good to see the prices that the company’s been purchasing at. But I did notice that it looks like the forecast is for share count to increase an additional 2 million shares in 2015. That’s about double what maybe we would expect without a buyback. Could you give a little bit of color on that?

Yeah, that’s just a placeholder number. We weren’t attempting to try to send signals with the share count number at all. It was simply in order to have the denominator for the per share amounts that you would get based on our non-GAAP net income projection.

Okay, so there’s really not much to it.

I wouldn’t read anything into it.

Yeah. And then lastly, I know historically you’ve given some guidance on as far as dollar value for some of the litigation expense. Do you have any type of idea what the HTC expense might look like this year, now that it’s slated to go to trial, coming up in the next month?

It’s really hard to do that around the time of trial, because there is so much activity going on. I certainly would put in $3 million or $4 million for the first quarter. It could be a bit higher than that, but it could also be lower than that. After the trial, regardless of the outcome, the expenditures should drop pretty dramatically, even considering appeals that might be filed, either by us or by HTC.

Okay, so the $3 million to $4 million, or possible more in Q1, but then tapering off pretty quickly, the remainder, most likely?

Yes.

And we’ll now go to John Fichthorn from Dialectic.

So, a lot of my questions were asked, but a couple that you probably won’t answer, but I’m going to ask them anyway. You mentioned Apple three times in the call. You talked about their intent to use and promote haptics in their watch, and the enablement of haptics in their phone. And so I was wondering if you could give us any more color around the current state of your relationship with them, since you mentioned it three times, and kind of what we should expect to see over the course of this year as they launch a product that most likely contains your IP. Do you hope/expect more license agreement and/or does your guidance factor in potentially litigation expense around that, to the extent that they are in violation? So any color around that, either from an expense and/or revenue standpoint would be great. And I have one other.

Great question. I would say that we point to Apple just simply as a proof point in the marketplace that haptics is gaining momentum. And to the extent that they launch solutions and effective experiences, we think it will help our business, and it adds a competitive spirit to the rest of the OEMs and their need to at least achieve the same kind of capability. So we see it as a very positive. In terms of the forecast, there’s no expenses built into there for any litigation. There’s also no revenue forecasted for any revenue. And other than that, I can’t give you any update or any other feeling for Apple.

No other feeling?

No other feeling. It’s a haptic feeling.

A haptic feeling. I’m missing some haptics on that feeling, but that’s okay. Then, with regards to the media side, expectations to the extent you can break out, what are the milestones that you need to hit as a business there. A recent analyst report cited that you had 20 engineers focused on that division, which currently has no revenue associated with it, or very little. Could you talk to us about revenue hopes for this year, what’s in the guidance, to the extent you can break that out, and/or milestones that you hope to hit, so that we know that this is a worthwhile investment to shareholders that the company is pursuing?

Sure. So the 20 engineers sounds to me a little heavy. There was a time when we were focused on building tools and products. We’ve successfully launched a number of those tools and products, and are actually in the market being used, and I might say they’re working quite well. So we do continue to innovate and continue to provide more training and design services, because the interest level is very high, so more of our energy today is in supporting active engagements with game developers, social media companies, and the video companies. So that’s where a lot of the resources are. We talked before about six key metrics that we’re measuring. One is around IP. I think we’ve talked about more than 100 patents and we continue to grow that portfolio every week. We also talked about developing tools and products, which I just mentioned. Now, many of those are already in the market and going quite well, building an ecosystem where you have not only people interested in using the technology, but you have people supporting your sales efforts, like ad networks, who are promoting the value to their clientele, as well as companies like audio services companies that are now being trained and capable of providing haptics services alongside their audio capabilities. We’ve talked about pilot studies. We pointed to two that are in the market, Showtime and then LETV. And we talked about all the other engagements. We can’t give specifics until either the content’s in the market or the partner allows us to communicate the results. But there are lots of activities underway around the world. And then we talked about developing the monetization side, and today, the bulk of what we’re doing is pilots and tests, where we capture the analytic data and use that to market the value to existing customers and new customers, and moving towards the day when we’ll be able to start charging on a per-program basis or on a CPM kind of a rate card revenue. And then I guess lastly is building our team, which today is almost entirely intact. So we have all of the capabilities in place, management, sales, field support, design capabilities, technical support, marketing resources, already focused on building the business. So essentially, as you’ve alluded to, it’s a full-fledged business in place, and we’re now in the proving stages, and we hope to transition that into monetization. And the outlook still is the same. We don’t expect significant revenue in 2015. We see it picking up in 2016 and probably being in full force by 2017.

And so, revenue this year is immaterial, like under a million, over a million?

I would think it’s under a million, John.

Okay, and the LETV deal that you’ve currently signed, is that a revenue deal, or is that a pilot and kind of proof of concept, out of curiosity?

It anticipates a number of aspects. Today, we’re currently in the pilot phase.

And I guess my last question is if you look out on this year, things that aren’t in your numbers or things that are in your numbers, what are the biggest potential upsides that could happen that might be long shots, and the biggest potential risk for you guys executing this year?

Well, it’s hard to capture all of the blue bird opportunities, let’s say. The upper end, obviously, would include existing customers fully engaged, launching more products, so a healthy marketplace, where volumes are increasing in all verticals. So, this is gaming, mobile, and on automotive. It would also include existing customers who are launching new solutions in new markets, in new areas. We’d like to see people like Huawei, even Xiaomi, continue to grow in adoption of Immersion technology. So we are optimistic about that. That would obviously help move us to the upper end or above the guidance range. And then you’ve got new licensees that currently are not licensed and not paying us, of which Apple would be one. Many others are still available as well in the automotive and the mobile space. You’ve got the whole category of wearables and we’re anxious to see the success of the Apple watch. Early indications are that it will be quite successful and we believe will push others into the space and accelerate adoption and investment in the space, and we think haptics adds a tremendous amount of value. So we think the wearables would also have a big opportunity. And then as we continue to grow the content business, experiences increase, that becomes a strong incentive for our partners to include more of our software and continue to grow in engagement with Immersion. So without giving you a lot of real names that we hope to sign, I think it’s a broad category of growth of existing customers, new customers, and expansion in the experience and the content space.

We’ll now go to Mark McMahon from LPL Financial.

So, I was wondering if you could actually add a little bit more information to the discussion you had at the end of the call regarding HTC. When the ruling came out, over the last two weeks, there’s a perceived, rightly or wrongly, notion that your patent portfolio is not as strong as maybe everybody was under the impression. I was wondering if you could specifically talk about the two that were validated by the judge, why they are critical versus the other three, if your arguments for rehearing are unsuccessful and they are not included in the trial, how that would affect your licensing strategy going forward with existing customers, as well as potential new licensees.

It’s understandably difficult to talk about strategy in the lawsuit right before trial, but the two patents that do currently remain are strong patents. One of them is the parent patent to several of the patents that were invalidated, and the other arguably would be very difficult to design around. And so we’re feeling actually quite good about going into trial with the patents that are in suit currently. We also feel like we have good arguments on the procedural grounds under which the three patents that were invalidated were taken out of play for now. And that’s something that we can look at now, we can look at after the trial, and we can pursue separately. As far as overall impact on our licensing program, I can’t manage other people’s expectations or how they’re thinking about our portfolio, but from our perspective, this is just part of the litigation process. You do expect there to be a certain amount of trimming down of the claims and issues in patents that ultimately are going to be presented to a jury. So it’s, on a very meaningful level, kind of exactly what you would expect and that you would also expect that there would be issues probably on both sides where you’d appeal. And then keep in mind too that these are patents that we looked at as being appropriate for litigation three years ago based on certain basic functionality in the Android operating system. We spent some significant time talking about today a lot of how haptics are beginning to be deployed and used throughout user experiences. It’s very different today, and we have a lot of IP around that. We’re pleased we have two patents that have been greenlighted for litigation, and for the trial, and those may end up being quite a bit stronger. We think the others, the invalidation may get overturned, but in the meantime, we have a lot of IP. So I don’t know that it will meaningfully impact our licensing program, especially as new use cases and business models and types of devices hit the market, anything in a better position.

So, just as sort of a takeaway statement, would you say that the perception after the ruling that there’s some weaknesses in your patent portfolio is overblown, and the market has overreacted in a negative way, which you wouldn’t agree with?

So, there were three patents which were invalidated, and we’ve got 1,900 issued or pending. And the vast majority of those patents, there’s nothing you could take from the ruling that you could apply to those other patents, so I don’t know how you could look at this and say it’s a comment on the overall strength of a portfolio that is comprised of IP in a lot of different areas, covering everything from hardware to user experiences to software to implementations. So again, I can’t comment on somebody’s specific perception, but we’re feeling pretty good.

I would say absolutely, the answer to your question is yes. It was overblown. We feel very good about the case. We feel very good about our patent portfolio for many of the reasons Paul just mentioned. So we feel real good about where we’re at.

Great. One last thing, and it’s just, if you could just touch on a brief comment, I was unaware that Amazon had released the new product with actuators and software to simulate haptic touch. Is that a potential licensee? Is that someone you’ve initiated discussions with? Or what’s going on with Amazon?

So I would say that we’ve always had a dialog with either someone at Amazon or somebody who’s providing them with design services or capability about the benefits of haptics. So the fact that they’ve begun using an actuator in a pretty simple application is exciting, and our job will be to show them how much more we can do with that actuator, so we’ll definitely engage them in a sales discussion. And depending on how that goes, we hope to have a friendly license put together with them.

And that is all the time we have for questions today. I’ll turn the conference back over to our presenters for any additional or closing remarks.

Well, thank you for being on the call with us today. We look forward to updating you again on our next quarterly call. Have a great day.