Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Jeffrey Scott - Scott Asset Management.
Jeffery Scott - Scott Asset Management
What is the R&D and SG&A going to be on a go-forward basis? The R&D was 1.6 for this quarter; what is it likely to be on an annualized basis going forward?
Rhea Posedel
We’re trying not to provide guidance on any of these things unfortunately, but as we did discuss, there have been some expense reductions that have already been taken and we will take additional ones as necessary. So, most likely we would see R&D decline.
Jeffery Scott - Scott Asset Management
Okay, you took 100% provision against the Spansion receivables?
Gary Larson
That’s correct. We did.
Jeffery Scott - Scott Asset Management
What is the price of Spansion unsecured debt on the open market right now?
Gary Larson
You mean the trading value?
Jeffery Scott - Scott Asset Management
Right.
Gary Larson
I don’t know what the current price is, but prior to the bankruptcy filing it had gone to an extremely low value where it was returning something along the lines of 400% a year annual interest.
Jeffery Scott - Scott Asset Management
Have you seen a price post bankruptcy?
Gary Larson
I’ve not.
Rhea Posedel
We’ll check it.
Jeffery Scott - Scott Asset Management
That would give you a pretty good target as to what kind of provision would be necessary. The inventory that you wrote-off; let me approach the question in a different way; has Spansion come to you since the bankruptcy filing and ordered any product?
Rhea Posedel
Well, they haven’t, but they have asked us to quote a couple of WaferPaks, support software, things of that sort. Right now they don’t have a lot of cash. Obviously they are trying to get by with a minimum amount of capital expenditures and consumer expenditures and it will be mostly driven by the market. If the demand is higher going forward, they’ll probably buy more FOX-1 and WaferPaks; if the demand is lower it will be pushed out. The first quarter was a slow period for them.
Jeffery Scott - Scott Asset Management
Do they have a debt financing in place?
Gary Larson
Again we don’t want to be the people disclosing the whole Spansion bankruptcy situation, but for that in particular, yes, I believe they do have debt financing.
Jeffery Scott - Scott Asset Management
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