In the next few quarters, we plan to further lower our inventory, reduce our overall level of operating expenses and we will increase our focus on our higher-margin businesses.

Apple tried to claim invention, but this patent dispels that. We are going to look at all the alternatives that the patent provides. We can look at legal remedies.

Of primary importance, we achieved our goal of returning to profitability.

There was a drop in flash memory prices in the quarter, with a precipitous drop in prices at the end of the quarter. This had a significant adverse effect on our sales in the quarter, and resulted in lower revenues, lower gross margins and inventory write-downs in the period.

Even though we increased overall revenues 50 percent year-over-year, the lower-than-expected selling prices for MP3 players and the inventory write-down negatively impacted gross margins.

We had set our targets higher for unit volume and average selling prices for our MP3 players than we achieved in the period.

We're very open to talking to all the companies interested in using our interface. We're going to be very vigorous in bringing our technology to market, and very vigilant in protecting our patent rights.

We are examining each of our product categories to determine how we can improve revenues, return gross margins to 20% percent or higher, and reduce operating expenses as we target a return to profitability in the second half of the calendar year.

To be able to achieve that, we need to have margins at or above 20 percent.

This will make us a leaner, more agile operation.