Question-and-Answer Session
Operator
Thank you. (Operator Instructions). Your first question is coming from William Raleigh of Wainwright. Please go ahead.
William Raleigh - Wainwright
Good afternoon. Nice quarter. Could you tell us how soon the public transportation project, the tunnels, might come into actual revenues?
Brian Lin
Yeah, well, we actually had a project in 2006. We are well on the project, and some of the revenues are already recognized by the company in the first quarter of 2007. Looking forward, we are bidding quite a few projects right now as we speak, and we hope to announce some of the contract wins over these next several quarters. And I think the important significance of these highway tunnel opportunities, is that we are actively involved in setting up the fire standards and fire codes for this industry. So that would lay a good foundation for our revenue growth now going forward.
William Raleigh - Wainwright
Alright, and is there any price pressure on the linear heat detectors this year, or is that easing somewhat?
Brian Lin
No, we don't see pricing pressures for the linear heat detectors for 2007. Actually, we will see new standards, and actually at this moment, our product is the only product that is certified. We believe we have a very good chance of maintaining and getting better pricing for our linear heat detectors, because this is a much better product now compared to the products sold before.
William Raleigh - Wainwright
Okay. And just one last question about the R&D. The R&D number was substantially lower, does that mean you are actually committing last to that, or what is happening there?
Christopher Donnelly
What you said, one of the--
Brian Lin
Just for the first quarter, though Bill, I think the last year we have been focusing on a lot of R&D efforts for linear heat detectors, and that has been completed. So, that's why we have less R&D expenses this quarter. But we are spending and breaking up R&D efforts right now to extend into newer product lines, especially in the fire extinguishing system in the first quarter.
William Raleigh - Wainwright
So that we could expect an expansion in that in the latter quarter?
Brian Lin
Yes, it will be higher then. I think we will maintain the certain percentage of revenues in R&D.
William Raleigh - Wainwright
Okay, thank you very much.
Brian Lin
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