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Cassandra

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Cassandra

Re: johny dangerously post# 53817

Friday, 12/05/2003 2:42:21 PM

Friday, December 05, 2003 2:42:21 PM

Post# of 93819
JD: It all depends on how e.Digital defines "royalty."

For example, the SEC filings state that e.Digital is to be paid paid "royalties" for the APS player. Falk stated in a previous web cast that the per unit royalty was "several hundred dollars" leading many to believe he meant that e.Digital made a pure profit of several hundred dollars per unit.

However, the filings have always shown that even though e.Digital is paid via a "royalty" format, the company is responsible for paying for the manufacturing. Yesterday Putnam clarified that e.Digital sells the players to APS and makes a margin on them. Therefore, although the royalty may indeed be several hundred dollars per unit, the majority of the royalty will be paid to Digitalway for manufacturing the device. The margin remaining for e.Digital is completely unknown.

See #msg-1442456 for the wording in the filings regarding APS.

The term royalty can simply be a per unit payment. It does not necessarily mean 100% profit.

~Cassandra



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