Question-and-Answer Session
Operator
(Operator's instruction) Your first question comes from the line of Brian Swift - Security Research Associates.
Brian Swift - Security Research Associates
Could you give a better idea of what your anticipated or breakeven cash level will be or should anticipate for Q3 as your margins were lower than what you have been historically which I assumed gross, partially about what you were talking about with the lower margin products but also from just the fact of utilization as well?
David Dunlap
Brian, with the $4.5 million revenue level, we would expect to be breakeven on cash for both operation and I think our working capital with those levels will also be probably slightly positive. So, I would look at our $4.5 million revenue level is being the approximate cash breakeven level.
Brian Swift - Security Research Associates
And does that assume further reduction from the $2.6 million operating expense number that we saw for Q2?
David Dunlap
Yes, I think you will see our expenses in the third quarter dropping by about the same amount we dropped between the first and second. So, I would look for expenses to be somewhere in the $2.4 million range, perhaps even a little bit lower.
Brian Swift - Security Research Associates
Okay and can you give us an idea of just your OEM number you think now as far as the Bluetooth portion of it is going to be kind of flattish going forward and what do you see as far as your pipeline, you may have a handful of customers here? Visibility is going to be very reasonable on.
Kevin Mills
Yes, we would have like rough 25% Q1, I mean Q2 over Q1. I think it will be about the same on the Wireless LAN portion and again, we believe we have passed off among the Bluetooth and we are now in a flat section and Wireless LAN improved 25% last quarter. We would expect that trend to continue and then I think as we get into Q4, some acceleration.
Brian Swift - Security Research Associates
Well, that is roughly about $100,000 so the SoMo handheld, what do you, you said you got a new distribution agreement for the US I think with ScanSource and?
Kevin Mills
But we would not expect a lot to come out of that on the SoMo side. I mean on the SoMo, we already have a very healthy pipeline and we have a number of customers that have completed both trial and pilot program and are raising fund, are delaying deployment probably waiting for the economic situation to improve. As the sales cycle for SoMo is approximately I would say a year, the distribution we add with ScanSource will not impact SoMo so quickly. Yes, we will get more units out in terms of new customers and new trials beginning, etc, but we already have a pretty healthy pipeline thus, if any of these should close, we would see that picking up.
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