HH: Unfortunately e.Digital has been "actively working with" many entities over many years and it meant nothing.
With RP you need to corner him with very specific questions and not let him give you a weazel Putnamese answer, which is what you got. The most important question to ask is whether e.Digital will be receiving any revenue from these players and in which capacities.
Note that he did not say that e.Digital designed the embedded device or that e.Digital would be the manufacturing entity or that e.Digital has a revenue-bearing contract with Wencor for these devices.
"Working with" could simply mean that they are talking with each other about it.
I'm not convinced that e.Digital will get any revenue from this device.
Note that even though e.Digital issued a PR about their "unveiling" the installed player, they did not mention it in the highlights for the quarter in the 2/14/05 PR.
HIGHLIGHTS AND ANNOUNCEMENTS FOR THE THIRD FISCAL QUARTER
• Welcomed Wencor’s purchase of customer, APS.
• Announced greater focus on business opportunities for customized products derived from secure, proprietary video/audio technology platform.
• Closed Series EE $1.85 million financing.
• Received $1.2 million IFE order from APS/Wencor.
• Extended the term of the $750,000 note until June 30, 2006.
• Filed patent application on proprietary hardware encryption technology.
• Expanded business opportunities for Kino™ versions of the video/audio
technology platform for both open and closed systems.
I sense another major letdown when shareholders find out what e.Digital's revenue will be from the installed units - could be nothing. Unfortnately it could take many months for that to be revealed in a future 10Q.
We've all been through this dozens of times. RP implies big things which accept as fact, buy the stock and then are later disappointed.
As usual, we shall see in the filings. Putnam clearly isn't giving the whole story.
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