There's a lot of bs on the boards about "3rd party interference' with the Maycom non-delivey on the 2000 (or 1250) part order.
1st of all, there is definitely a 3rd party interference... since Maycom has multple clients and multiple component vendors, so for example if there was a lucrative contract to utilize the mfg'ing capacity available, then Edig's order could easily have been dumped due to the 'interference' of the lucrative contract by some other party needing Maycom's mfg'ing capacity.
The whole 3rd party interference item is a bogus red-herring in any event, placed in the 8k by Edigital to give the dufii something to chew on and spew forth on the boards that makes the delivery delay somehow not Edig's liability.
Look at it this way.... Maycom has some reason it can't / won't deliver on the order. That reason or reasons haven't been disclosed by Edigital... after 2 8k's released on the subject, which 8k's are issued to inform shareholders and interested parties of Edig's legal economic liability for the non-delivery and it's direct pecuniary quantitative implications.
What reasons would Maycom have?
There are several I can think of --- besides the ones where Maycom chose unilaterally to delay the mfg'r of the digEplayer due to overcommitted mfg'ing capacity in order to take on a more lucrative longer term or more profitable contract.
The reasons I can think of are biased by the observation that Edig hasn't made a peep about the reasons for the Maycom non-delivery. In addition to this observation, digEcor's suit claims 2 separate instances of Edig fraud or negligent misrepresentation to digEcor regarding the delivery being on schedule and completion of mfg'ing of the goods, (ready for delivery).
Furthermore, digEcor visited Maycom after or at the time of the delivery date scheduled by contract on Jan 10. This implies that digEcor sought to do whatever they could to either obtain the delivery, get a comittment from Maycom to get the delivery at some committed time, or discover why the delivery hadn't been made on schedule when Edigital had told them it was on schedule and ready for delivery.
The visit by digEcor to Maycom, Edig's vendor, was a reasonable and normal and prudent action to take after footing 100% of the bill before the delivery was made, when the delivery date was still uncertain and uncommitted.... after not being able to obtain a committment from their own vendor (Edigital) AND after having been told on 2 different occasions by Edigital that all was well in Denmark.
Furthermore, the non-delivery is not claimed to be for faults out of Edigital's control, since the contract terms for the PO specifically exclude all non-vendor possible reasons for non-performance from liability of the vendor (co. to whom the PO is given).
Therefore, digEcor is claiming both that Edig knew of the issues related to the delay, and were liable for having had the wherewithall and responsibility in their control to correct the situation.
Assume just for a simple example, that the Korean Electronic's industry and Gov't placed an export tax on shipments of completed goods or substantially completed sub-asm's of electronic's parts from Korea. Assume, that this tax act was enacted AFTER Edig placed the order with Maycom, but BEFORE the order was begun to be executed, and therefore the tax applied independant of anything Maycom was in control of or responsible for.
Further, then assume that before the goods could be shipped by Maycom, the tax was due. Maycom requests the tax be paid to Edigital, and Edig says no... it wasn't part of their contract with Maycom. So Maycom has no choice but to sit on the goods until the tax is paid... and Edig refuses to pay the tax. Stalemate ensues until somebody blinks.... and Korean Govt has no reason to blink, nor does Maycom... since they hold the inventory that Edig has already supplied the funds to Maycom for. Ball's in Edig's court in this purely hypothetical example of how Edig is directly responsible and liable, with Maycom caught in the middle.
Now, I don't suppose for a minute that this is the reason... since had that been the reason, or a similar scenario, then it's likely that said tax or surcharge would have been paid by digEcor to get it's paid for goods in hand, and THEN file suit for the tax or surcharge against Edigital.
So the reason for Maycom's non-delivery isn't related to an insubstantial surcharge of some kind that digEcor could have paid and then filed suit for recovery from Edigital.
This leaves 3 other types of reasons:
1. A substantial cost overrun due to some design or quality fault in the design for which Edig is responsible to pay for to get fixed.
2. An infringement of some Korean patent or other country patent or proprietary knowhow that prevents Maycom from shipping or completing the mfg'ing without compensating the infringed party or parties... and which infringement is a direct function of the Edigital design... therefore Edig's responsibility to compensate the infringed party. This kind of reason would qualify as a "third party" interference of course... but not in the context the hypes and dufii would hope were the case.
3. A sub-asm or electronic component supply shortage or quality problem that prevents Maycom from completing the mfg'er of the units using the specified Part Numbers the solution of which requires a design change by usng a different PN which may require additional work or testing or qualification by Edigital or their chosen testing facility to rectify. Substitution of a different PN in a design usually contains the phrase "Use xyz PN from Company ABC, or engineering approved alternative"... and the 'engineering approval' has to come from Edigital.... and their engineering tests may not have found the the alternative that actually works to meet the quality requirements.... or they've been negligent in pursuit of the testing reqiured to assure the alternative is acceptable. Maycom's simply waiting, therefore, for Edig to provide the go-ahead to use the alternate PN or combination of alternate PN's that are compatable in the asm to meet function and reliability. Edig could alledge that the lack of supply of the specified PN was due to the interference of a third party.... whether that had anything to do with the price of tea in China or not.
In each of these 3 types of reasons for Maycom's non-delivery Edig would have or should have been aware of the implications and their responsibility to resolve.... whether they were so inclined or not after having received the funds from digEcor is another question.
Keep in mind that Maycom's function is simply to asm (solder) the components to the board and test it... The components that are to be used are specified by the engineering document from Edigital. The PCB layout is Edigital's design. All Maycom does is print up the artwork for the PCB layout and send it to another vendor to make the actual PCB (Copper lines and via holes between layers if multilayer PCB). The electronic components are asm'ed to the board and wave soldered (or hot air knife soldered, or some other low volume mfg'ing soldering method -- even by hand for example if Maycom sub-contracted the asm to a vendor in China). The asm'ed unit is then attached to to a plug and tested... to some functional test conditions... perhaps after a burn-in period, but probably not.
The lead-time for getting the PCB's mfg'ed in the PO volumes is less than 3 weeks from delivery of artwork or schematic, to delivery... and this can be advanced by a week for a small surcharge.. ~15% adder. The component asm time to the board is less than a week for 2k boards ... at most 2 weeks if there is only a small soldering or small component placement machine used for the job.... even less time if shipped to China for hand placement and soldering.
It is therefore quite unlikely that there was a problem in Maycom's mfg'ing or their sub-vendor's mfg'ing processes or that of the PCB's mfg'ing processes, since any faults in those regards are easily and quickly rectified and reworked if necessary... within a 3 week period at the outside max.
Therefore it is more likely that there was a component functional or combination function problem among the components specfied from the batch of components procured. Such a problem could also be easily rectified by selective asm in the worst case.... which adds to the costs of mfg'ing.... i.e. lower component yields and higher labor costs. When this type of problem occurs it is most often a design problem with compatability of spec's among components. Sometimes it's a faulty component problem... i.e. the components don't meet their own spec's... in which case there are usually several equally functional alternative component suppliers to deliver components that meet the spec's... and the faulty components from the other supplier are simply returned for credit on a new order or fnds refunded. In either event of a component's failure to meet it's own spec's, it's not always easy to identify which component is failing and identifying the faulty condition in a component may entail more specialized testing than Maycom has at it's facilities... in which case they would leave the issue to be solved and rectified by Edigital... pay for another set of components and deal with the fault finding later, or deal with the fault finding first, and then rectify.... the former is expediant in time and more costs upfront, and possibly no cost recovery from the faulty components unless the co with the faulty components accepts their liability in it without argument.... not always easy to do, by the way. The latter is time consuming and full of finger-pointing, but may ultimately save money on the parts costs and mfg'ing asm costs if selective asm and testing/rework can be avoided.
Since any of the aformentioned issues are standard operating fare in any electronic's asm business anywhere in the world, the means of dealing with them are standard... and nearly always are to use an alternate supplier to circumvent a faulty component supply and deal with the costs of the faulty component issue later. Since I don't think Edig is using any components that aren't standard availability from at least 2 sources, if not more, I would be surprised if the reason for the delay related to a faulty component.
Rather, it would be more likely that the failure was one of compatability of components in their combination... a design / spec issue, not a component supplier issue....requring Edigital's engineering team to resolve. It may therefore be that the engineeering resolution by Edigital didn't work and then some finger pointing started... with Edigital refusing to pay double for the components and the component supplier holding out for Edigital's engineer's proving to the supplier that it was their parts that were at fault. In the meantime, Maycom's stuck in the middle... they can't asm without resolution of the problem, and the problem's between Edig and the component supplier or the design isn't robust enough to work with the range of allowances of the component spec's.
So, if it's a hardware problem, then it's Edig's to resolve one way or the other... and the fact that it's been over 4 months since the scheduled delivery date, means it isn't likely a hardware problem in any event... since there's been more than adequet time to resolve it by design or component supplier changes.
That leaves some kind of legal hassle... perhaps related to an infringement claim in Korea by a Korean or other country firm.
Regardless of the real reason's for the non-delivery, in any scenario I can come up with, Edigital is directly responsible for handling the resolution.... either in engineering effort or by monetary means (payments to component suppliers for better or another set of components, or to a claimant for having infringed on some patent or proprietary condition)... or both.
Perhaps somebody claimed an infringement where there is none... but that takes time to resolve in either negotiations or courts or both in any event.... and costs both time and money. If Edig could have resolved the issue by paying a license fee for infringement and then settled the infringement issue later, I think they would have done so if the license fee conditions were equal or less than their take on the gross margins.... i.e. made delivery with a zero gross margin. However, that would have made any subsequent orders unprofitable to Edigital, so they may have chosen to fight the infringement (if that's what it was) in a Korean or other coutry court, to settle the infringement issue before paying a license fee that would have made their businss of eVu's and digEplayers non-profitable.
It'll be interesting to hear the excuse given by Edigital in some future PR, but you can almost bet the reason they give will have little bearing on the real reaons. In other words, Edig will supply a part of the reason that sounds good or doesn't invoke their liability in any consequential sense, but the real reasons will be those that Edig doesn't disclose...not the one they disclose.
Entertaining it is.
AI
