The company expects the second phase of the recapitalization to occur during the first half of 2013. In this phase, Pulse intends to offer each holder of its outstanding senior convertible notes, other than Oaktree, the option to receive new debt under secured Term Loan B in exchange for its senior convertible notes at up to 80% of their par amount, as well as shares of Pulse common stock. To the extent the holders of 90% of the senior convertible notes, including those exchanged by Oaktree in the first phase, exchange their notes under this optional exchange, then the $28.5 million portion of Oaktree’s Term Loan B will be reduced by 20%.First Quarter 2013 Outlook “Consistent with similar indications from industry experts and peer companies, we are encouraged by order rates that have been increasing slowly into the New Year,” said Mr. Faison. “We are also encouraged by the reengagement of a number of key customers that had expressed concern about our financial condition throughout last year. Since the investment by Oaktree, most of these customers have indicated their higher confidence in Pulse and have begun discussions to increase business share and new program awards to us. We believe we have maintained our technology leadership in our core markets and this continues to attract the attention of our large electronic-industry customers that depend on the latest technology for their products. We are hopeful that these signs of strengthening will continue and have favorable effects on our sales in the coming quarters. However, normal first quarter seasonal softness and the effects of Chinese New Year, overall weak order rates in the fourth quarter, and the timing and strength of Wireless product ramps will keep our first quarter revenue somewhat lower than the fourth quarter. “On the other hand, we continue to see progress in improving our cost structure as demonstrated by our improving gross profit margins in the fourth quarter, which will result in non-GAAP operating profit at a level similar to fourth quarter despite the lower revenue,” continued Mr. Faison.