RP's e-mail merely states the following:
1. APS is fronting the cost of manufacturing the units
through letters of credit.
2. e.Digital is paid upfront royalties upon shipment
of the IFE products to APS.
However "paid" is not the correct term considering that e.Digital uese acrual accounting.
In reviewing the last 10Q, e.Digital had already been "paid" a "deposit" of $190,000 on units that were to be delivered sometime after June 30, 03. Because the units had not been delivered, the this cash deposit was booked as deferred revenue. It is also being held as restricted cash.
The revenue will be recognized in the same quarter that the units are delivered, regardless of when the dollars actually are paid. This deposit was prepaid to e.Digital before it was "earned." If there is any earned revenue that has not yet been received, it is booked to accounts receivable.
RP's e-mail does NOT state specifically to whom APS is paying for the manufacturing of the devices. From the deposit that had already been received prior to 6/30, it appears to me that APS is paying e.Digital and e.Digital will pay Digitalway.
I see nothing to indicate that APS pays DW directly. As I have said, I don't see any "valid" reason for the company not to make the money flow situation perfectly clear. I think they like the fact that some or perhaps most shareholders believe what you seem to believe - that somehow "several hundred dollars in royalties per unit" are going to be paid and will be pure profit.
Unless the company makes it clear, shareholders will have to wait until mid November for the 10Q to find out.
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