Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from [Kent Holden - Camfund].
Kent Holden - Camfund
In the 10-Q, the Results of Operations section, where you talk about the pricing structure for the product being reevaluated, require an increase in prices and an increase in the cost, I was wondering if you could clarify that a little bit.
Robert Lifton
Yes. When we started this process, the dollar relationship to the Euro was substantially different and there were other factors that led us to price the product at a price that is lower than what we feel we now should get and are entitled to get for the product to provide the kind of spread that we want for profits. So we are raising the prices on our product to our customer base. We have had no pushback on those prices because they still allow the price to the ultimate consumer to be sold at a price that we feel and the customer feel makes sense. In some cases we've been dealing directly with customers or dealing through representatives, which reduces the markup of a distributor in the middle, so that helps the pricing structure to the ultimate consumer as well.
And so the pricing structure has been increased with respect to the Power Pack, with respect to the Power Management, with respect to the Advanced Power Management.
Operator
Your next question comes from Stephen Bartholow - Carret Asset Management.
Stephen Bartholow - Carret Asset Management
Could you give us a bit of a review of the relationship you have with General Dynamics? It's my understanding, and I may be wrong, that you've got a complete, exclusive relationship with them in terms of current products and all future products as that relates to the DOD opportunity.
Robert Lifton
Let me ask Jacob Weiss to discuss that because he's been working on all of our military programs.
Jacob Weiss
The relationship with GD, as you know, goes back number of years and has been very dynamic as we looked for opportunities together with them. The focus right now is the DOD product, and that's where all the effort is going. We're also working with them on the [inaudible] product to try to introduce it to the military directly. But the primary focus is the DOD competition product. And off of that platform we would hope to develop additional products together with them.
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