Free Declaration in Support - District Court of California - California

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Exhibit I

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1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

LEGAL-WORLD INTERPRETING
Threshold Pharmaceuticals Fourth Quarter and Year End 2005 Earnings Call March 1, 2006

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2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 [START FINANCIALCONFCALLHELLEREHRMAN MP3] OPERATOR: Good day, everyone, and welcome

to Threshold Pharmaceutical's Fourth Quarter and Year End 2005 Conference Call. conference is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to the Senior Director of Corporate Communications, Ms. Denise Powell. ahead. MS. DENISE POWELL: Good afternoon, and With me Please go Today's

welcome to Threshold's Conference Call.

are Barry Selick, Chief Executive Officer; Michael Ostrach, Chief Operating Officer; Janet Swearson, Chief Financial Officer; and Alan Colowick, Threshold's Chief Medical Officer. Before we begin, I would like to make the following disclaimer. The financial results

conference call will include forward-looking statements regarding Threshold's cash position and requirements, anticipated losses, product candidates, clinical trial progress and results and potential therapeutic used and benefits of our product candidates. These statements involve risks and

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3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 uncertainties that can cause actual results to differ materially from those in such forwardlooking statements. Potential risks and

uncertainties include but are not limited to Threshold's ability to initiate, enroll and complete its anticipated clinical trials, the time and expense required to conduct such clinical trials and the results of such clinical trials, including not anticipated product safety issues as well as efficacy results. Further information regarding these and other risks is included under the heading "Risk Factors" in Threshold's quarterly report on Form 10-Q, which was filed with the SEC on November 10, 2005. That is available from the SEC's web

site and on our web site under the heading "Investors." We undertake no duty to update to forwardlooking statement made in this conference call. I will now turn the call over to Barry to discuss Threshold's 2005 accomplishments and 2006 guidance. MR. BARRY SELICK: Thanks, Denise, and good

afternoon everyone and thank you for participating in today's call. I'm going to

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4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 review our recent and 2005 accomplishments and year-end financials, and then we'll briefly outline our 2006 guidance. I'm especially pleased with 2005 because we continued to advance our product pipeline. in doing so, we achieved all of our key milestones for the year. We look forward to And

achieving significant milestones in 2006. As you know, we have three product candidates in development, TH-070 for BPH, glufosfamide for pancreatic cancer and 2Deoxyglucose for the potential treatment of various solid tumors. Here are just some of our 2005 accomplishments. First, with respect to TH-070

in BPH, we initiated two placebo controlled, multicenter studies this past summer, a 200patient Phase II dose-response study in the US and a 480-patient Phase III efficacy study in Europe. We remain on track to have results from

both of these studies by year-end. These studies followed positive Phase II results that were published in the May 2005 edition of Reviews in Urology. These data, if

replicated in our currently ongoing studies,

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5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 suggest that T-070 may address both goals of therapy for the treatment of BTH, that is, rapid symptom improvement as measured by the International Prostate Symptom Score, as well as treatment of the underlying disease. Now on to glufosfamide. This past December

we completed a Phase I study of glufosfamide plus gemcitabine in the first-line treatment of advanced solid tumors. These data were

presented at the ASCO Gastrointestinal Cancer Symposium this past January. In summary, glufosfamide in combination with gemcitabine was well tolerated in this study. Pharmacokinetic analysis showed no significant interaction between glufosfamide and gemcitabine, and the dose of 4500 milligrams per meter squared in combination with gemcitabine was reached and is being taken forward in the Phase II study, which is already underway. Note

that this is the same dose that is being used in our Phase III study as a single agent. And for 2-Deoxyglucose, we're continuing our ongoing Phase I study alone and in combination with Taxotere in patients with various solid tumors.

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6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Operationally, we've achieved some significant milestones as well. We successfully

completed two major financings in 2005, our IPO in February and our follow-on offering in October, which raised sufficient funds, approximately $100 million for the completion of all of our ongoing clinical studies as well as to provide operating capital for our existing programs through 2007. We also added two experienced senior executives to our management team this past year, Dr. Alan Colowick, our Chief Medical Officer, and Michael Ostrach, our Chief Operating Office and General Council. We also

hired key Vice Presidents in the areas of manufacturing, regulatory and clinical affairs. These additions strengthen what already was the nucleus of a world-class development organization and support our evolution into a fully integrated commercially driven biopharmaceutical company. In addition, at the beginning of this year, the US Patent and Trademark Office awarded us two key patents related to TH-070 and 2Deoxyglucose. Importantly, the patent that we

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7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 were awarded for TH-070 provides us market exclusivity for the product until 2024. Now on to the financial results. The net

loss for 2005 was $44.4 million compared to a net loss of $23.6 million in 2004. The loss

included non-cash stock compensation expenses of $9.4 million for 2005 versus $6 million in the previous year. Total operating expenses for 2005 were $47.2 million versus $24 million in 2004. This

increase primarily reflects increased cost to advance the company's product pipeline including two Phase III studies and three earlier-stage clinical trials. Cash usage during 2005 was $32 million, and as of December 31, 2005, Threshold had $99.7 million in cash and marketable securities, which includes the proceeds raised through our IPO and follow-on public offering. Now, regarding our guidance for 2006. We

expect cash requirements, which exclude non-cash stock compensation to be in the range of $48 million to $55 million. We continue to expect We do

cash to last through the end of 2007.

expect the net loss for 2006 to exceed our cash

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8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 requirements due to non-cash compensation expenses. With TH-070, we expect both the US Phase II dose response study and the European Phase III efficacy study to yield results by the end of this year. Many of you have asked when we would

complete enrollment, which we do not disclose. However, we will tell you when enrollment has completed, and at that time we'll be able to give you an estimate of when we expect to disclose the results. In 2006, we will also start additional smaller TH-070 studies that will be supportive of the overall program. With glufosfamide, the

28-patient Phase II combination study with gemcitabine is underway. Early response data As you know, in

will be available by year-end.

cancer studies, survival data is often more interesting than early response data, and to that end, the six-month survival data should be available in the first half of 2007. Enrollment in the Phase III registration study of glufosfamide in second-line pancreatic cancer patients is ongoing and we continue to expect results by year-end. As for additional

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9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 indications for glufosfamide, we're committed to starting at least one study with glufosfamide this year in an indication other than pancreatic cancer. We'll announce specific tumor types and

populations when we commence enrollment. And for our 2-Deoxyglucose Phase I study, there will be data from 22 patients in this study presented at the AACR meeting in April, and we expect topline results by year-end. In the near-term, we will have data presentations, primarily pre-clinical and discovery research, at several major relevant medical conferences in the second quarter of 2006 including the American Association for Cancer Research Annual Meeting, April 1st through the 5th in Washington, D.C., and the American Urologic Association Annual Meeting, which takes play May 20th through the 25th in Atlanta. We also finally are hosting a small introductory section at the AUA with some key opinion leaders attending. This is in the

planning stages, but you might want to save the date, May 20th, around 5:00 p.m. in the evening for this.

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10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Now before I turn the call back to the operator and start the Q&A session, I would just like to tell you how excited we all are about 2006. We recently had a visit to Threshold by one of our clinical investigators from the Phase I/II glufosfamide study in pancreatic cancer. In the all-staff meeting, where she gave her presentation on the disease, how patients and their families choose to enroll in a clinical trial of this type and a summary of the Phase I data, it was truly inspirational for all of us to hear that in this relatively modest study patients appear to have already benefited from this drug. And as for TH-070 for the treatment of BPH, over the past year we've spoken with patients whose symptoms range from the inconvenient of having to insist on isle seats when they travel on a plane to those who wake up literally every hour during the night to empty their bladders and then have to rush to the bathroom. If the ongoing studies replicate what we've already demonstrated in our single-center Phase II study, then TH-070 in my opinion is going to

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11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 be truly a homerun for patients. Now with that as an overview, let's move on to the Q&A. OPERATOR: Thank you, sir. To ask a

question, please press the star key follow by the digit 1 on your touchtone telephone. Also,

if you're listening on a speakerphone, you may want to disengage your mute button to allow your signal to reach our equipment. So once again, that's star 1 to ask a question, and we'll pause for just a moment to assemble our question roster. Star 1 for questions, please. We'll take our first question from Steve Harr with Morgan Stanley. MR. KEVIN CONNNOR: Go ahead please. This is Kevin I have two

Hi.

Connor [phonetic] for Steve. questions.

It would be helpful is you could

provide any additional color surrounding the supportive studies you have planned for 070. And if you--I mean, R&D in the fourth quarter saw a pretty substantial increase sequentially. If you could provide any color there as well on how you expect that to trend over 2006 given as you keep the cash burn guidance in mind? Thank

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12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 you. DR. ALAN COLOWICK: Yeah, Kevin, this is I can

Alan Colowick, the Chief Medical Officer. take the first question in terms of studies

which we are anticipating beginning in 2006, this year, in support of the TH-070 program. We're anticipating getting three studies this year. One of them is a fairly classical

clinical pharmacology study that will I think provide very important information for us around various PK characteristics, as well as other abni-type [phonetic] of data. The second study is a study which is designed to address the effects of TH-070 on permatogenesis. And then finally, a very

interesting study, one which I think will generate a lot of very interesting data in men who are scheduled for a radical prostatectomy, who have prostate cancer. We'll be treating

these men first with lonidamine and then examining the surgical specimen to see what the effect is of lonidamine on the prostate. We

expect to, as I said, initiate all of these studies this year. MS. JANET SWEARSON: And Kevin, this is

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13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Janet Swearson. Could you tell me the

increase that you were looking for again? MR. KEVIN CONNOR: Sure. So R&D in the

fourth quarter just sequentially saw an up tick and I just wanted to see how--what we can expect in terms of this trend over '06. MS. JANET SWEARSON: was an increase in '04. Okay. So yes, there

Now it was primarily

due to the clinical trials because we had started the Phase II and the Phase III for BTH. MR. KEVIN CONNOR: MS. JANET SWEARSON: Right. And as you know, those We--the

trials will be ongoing through 2006.

guidance that we gave was at--we gave cash guidance and that would be in the range of 48 to 55. So you can factor out what portion of that

would be R&D. MR. KEVIN CONNOR: But in terms of run-rate,

we can see--we can assume that as a new base tick-up? MS. JANET SWEARSON: safe assumption. MR. KEVIN CONNOR: OPERATOR: Thank you. I think that's a pretty

We'll take our next question from Go

Joel Sendek with Lazard Capital Markets.

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14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ahead, please. MR. JOEL SENDEK: Hi. To be clear, you're

not going to give any of the enrollment until it's fully enrolled for TH-070. MR. BARRY SELICK: MR. JOEL SENDEK: Yes, that's right, Joel. Okay. So I can't even

kind of get a feel for maybe how many patients are in or anything like that right now. MR. BARRY SELICK: No. I mean, no we stick

to the guidance that, you know, we're shooting to report the results for the trial by year-end. And we're throwing you a bone by at least offering to tell you when we've completed the enrollment, although, can't project at this point when that will be. MR. JOEL SENDEK: Okay. But is it safe to

say that's everything's going along as you'd expected and you're not changing your guidance as far as data by year-end and-MR. BARRY SELICK: [Interposing] Yes, that's true. MR. JOEL SENDEK: Okay. And then I just

had--in thinking about how the drug works, one question I had, I mean, just more mechanistically, which is why does TH-070 act as

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15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 quickly as it does. Can you just talk about

that for a couple minutes? DR. ALAN COLOWICK: Yeah, sure. Well, I

think, you know, one of the things that we believe in terms of the mechanism of action for TH-070 is that it disrupts glycolysis. And

glycolysis in prostatic epithelial cells is really a fundamental property for the survival of those cells. And so our belief is that by

inhibiting glycolysis, we induce apoptosis and that's, as Barry alluded to earlier, really addressed both important aspects of BPH, that is, interrupting the disease progression or even reversing it by shrinking the prostate and imparting symptomatic relief. And in terms of why the second part is true, why the symptom relief appears to be more rapid, we believe it's directly tied back to the mechanism of action of the drug and its very rapid effect on the prostatic epithelial cells. MR. JOEL SENDEK: So the study you mentioned

in the pre-prostatectomy patients might give further evidence to this, presumably, because you would give the drug on a--and see a pretty quick response and be able to actually measure

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16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 it. Is that one of the purposes or-DR. ALAN COLOWICK: MR. JOEL SENDEK: wrong? DR. ALAN COLOWICK: Yeah. No, I think [Interposing] Yeah. I--

--am I thinking about that

that's--it's a good point.

I want to be clear

that that--the study in men with prostate cancer isn't designed really primarily to look at the symptomatic relief of any lower urinary tract symptoms that may coexist in these men with TH070. That's not an inclusion criteria for these

men, in fact, to even have lower urinary tract symptoms. But what we feel quite certain about, just epidemiologically, is that the vast majority of these men will certainly have histological evidence of BPH. evidence. They may also have clinical

But they'll certainly have

histological evidence of BPH as well as potentially prostatic intraepithelial neoplasia. And from the study, we'll be able to get at least some, I think, hypothesis-generating data around what the effect of TH-070 on all of those cells and all of those types, both BPH, prostatic intraepithelial neoplasia or PIN and

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17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 adenocarcinoma. MR. JOEL SENDEK: Mm-hmm. When will that

study--presumably, we won't have data for any of these studies until next year if they only start at some point this year. DR. ALAN COLOWICK: Is that right? I think, you know, we

anticipate starting this study this year, as I said. I think once enrollment begins in that

study and we have some sense of the pace, as the year goes on, we may give guidance about when we might see data from that study. MR. JOEL SENDEK: DR. ALAN COLOWICK: OPERATOR: Thanks a lot. MM-hmm.

We'll no go to Brian Lehan Go

[phonetic] with Forus Bank [phonetic]. ahead, please. MR. BRIAN LEHAN: taking the question. Hi.

Thanks a lot for

Just a quick question

jumping back to the glufosfamide combo trial. Is anybody still on therapy right now? DR. ALAN COLOWICK: Yes. There are patients

still on therapy, which is an important point. So we're still following patients for response on that study. The data which was presented in

January represented the data on the 19 patients

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18 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 who were necessary to assess the maximum tolerated dose or, in this case, the highest dose that we planned to study was tolerated. But patients from both that cohort and earlier cohorts remained on study and are--and continue to be assessed for response. MR. BRIAN LEHAN: And I guess a follow-up

there would be has anybody transitioned into a partial response and are there any pancreatic patients among these patients? DR. ALAN COLOWICK: So the first--I'll

answer the second question first, which is yes, there were two patients with pancreatic cancer, who--amongst those initial 19 patients. At this

time, I think that beyond what was reported in the poster at ASCO I'm not prepared to discuss publicly. I will say that response is still

being assessed and as those data become final and confirmed then we'll be able to give more guidance. I'll remind you that there was an overall approximately 60% stable disease rate, that is 10 out 17 patients, and a very interesting patient with ovarian cancer who just barely missed the RECIST criteria for a partial

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19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 response, had a 27% reduction in her tumor, but clinically a very impressive response. And

so in addition to those other 17 patients, we will continue to assess the potential for response in the pancreatic cancer patient. And then just to remind you, of course, we've now begun enrollment into the Phase II portion of that study where we'll enroll approximately another 26 patients or so specifically with pancreatic cancer patients at the dose, the 4,500 milligrams per meter squared dose of glufosfamide that we believe is most active. And then, so I think it will be that cohort of patients that really give us the best handle on response rate. MR. BRIAN LEHAN: Okay. And then on BPH, in

patients who take alpha-blockers, since the drugs don't seem to impact prostate growth, is there a time window after which you could expect alpha-blocker patients to kind of transition onto other therapies as the prostate gets too large for them to be effectively treated? DR. ALAN COLOWICK: Yeah. You know, Brian,

I think that's a really good question and one

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20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 which is difficult to quantitate. I think

qualitatively, it's certainly the case that people expect that eventually men will fail alpha-blockers due to growth of their prostate. Of course, patients are different in the rate of growth of their prostate as well as, depending on the anatomical location, what that translates to in terms of symptoms. But most studies that

have a reasonable follow-up period, at least from an epidemiological perspective, suggests that men ultimately will fail alpha-blockers, and when they do, either seek other forms of medication or surgical procedures. It's

estimated that about 10% of men who are on medical therapy on an annual basis seek a surgical alternative. MR. BRIAN LEHAN: DR. ALAN COLOWICK: OPERATOR: Okay. Thanks very much.

Mm-hmm.

We have a question from Brett Please go

Holley with CIBC World Markets. ahead. MR. BRETT HOLLEY: Hi.

Yeah, Alan, I just It's Did you

wanted to follow on this permatogenesis. the study that you're doing for TH-070.

say that the data would be this year or next?

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21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Did you give specific guidance on when that data would be? DR. ALAN COLOWICK: Yeah, Brett, I didn't

give any guidance at all on when we'll have the data. I did give the guidance that we will

start that study this year. MR. BRETT HOLLEY: Okay. And then what's

the gating factors on--you know, as far as timing on starting those small trials? DR. ALAN COLOWICK: What--I'm not quite sure

what you mean, Brett, by gating factors. MR. BRETT HOLLEY: I mean, you know, what

kind of resources, you know, do you have from Marshall [phonetic] to start that study. You

know, how fast can they get done theoretically? DR. ALAN COLOWICK: Yeah. I think, so, each I

of those studies is actually quite different. can tell you that all of them are at the stage where we're essentially just putting the operational touches on them. written. The protocols are

They've been submitted to IRBs,

contracts, etcetera. But each of those studies is quite different in terms of the population and what we're--what the conduct of the study is. And at this point,

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22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 we're not planning to give any guidance around when we expect to have data from any of those studies. I'll remind you specifically with

respect to this permatogenesis issue, we have ongoing studies that also will be providing data, so the US study, the Phase II study in the US as well as some of the sites in the European Phase III study. We're collecting semen samples

along the way in those studies and we'll have some information on this topic at the end of this year when those two studies are complete. MR. BRETT HOLLEY: So that will be a part of

the topline data release or the data release at the end of the year we'll expect for those trails? DR. ALAN COLOWICK: Yes, at a topline level.

Now for this specific endpoint, follow-up may still be ongoing. And so I think we'll have to

see where we are with that at the end of the year in terms of what we'll be able to disclose. MR. BRETT HOLLEY: Okay. And the other

question was on TH-070's, you know, patent protection and the steps you're taking to further bolster that position there. I

recognized that you had the one important patent

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23 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 this year. forward? And what can we look for going Is there any update on that. This is Michael

MR. MICHAEL OSTRACH: Ostrach.

We do have an issued US patent now

they issued in January that covers the use of TH-070 for treatment of BPH. We are pending

corresponding applications throughout the world and, in particular, of course in Europe and in Japan and have expectations that those patent should be granted. In addition to that very fundamental, I think very protective patent, we have patent applications involving various dosage formulations and regimens for using the drug as well as analogs and also applications covering the mechanism itself. So we think that we've covered it pretty well. We've tried to create a very strong and

long picket fence to protect this opportunity. MR. BRETT HOLLEY: Michael. OPERATOR: Just a reminder, to ask a Star 1 for Great. Thanks very much,

question, please press star 1. questions, please.

Well there appear to be no

further questions at this time, so I'll turn the

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24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 call back over to our speakers for any additional or closing remarks. MR. BARRY SELICK: our perspective. I think that's it from

We're happy, obviously, to

receive any questions that you might have subsequently. call. Just give either one of us a

Denise, do you have any further comments? Nope. Thanks for

MS. DENISE POWELL: listening to the call. OPERATOR:

Well thank you.

Again, that does We appreciate

conclude today's conference call.

your participation and you may now disconnect. [END TRANSCRIPT]

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25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Signature _Cindy Feldt______ Date_______February 4, 2008_ C E R T I F I C A T E The prior proceedings were transcribed from audio files and have been transcribed to the best of my ability.