We can speculate on the backlog content. On the positive side, the unfilled orders equal 1.9 million and the order backlog equals 2.7 million. That computes to a 70% cost or 30% gross margin.

I state this in that we believe that edig doesn't have the resources to build inventory, therefore I relate orders on contract manufacturing to backlog. The unknown is the purchase amount. Does that equate to the total cost from the manufacturer or does that represent a percent of the total cost, which would make the final margin less as applied to the backlog.

As I stated, it doesn't matter if we continue to improve in sales and margins with each successive quarter, resulting in 4k, 6k, or 8k in units to breakeven.

My reason for the analysis was to show that using the current cost structure; it may be difficult to state that 4000 units would result in a breakeven.

My expectations center on the DM actions, which will rocket the earnings, compared to the present, even breakeven, and as a result we will see an improvement in the share price and added capital to facilitate the marketing and research effort into added market segments.

Sales alone without any settlements from the patent issue may take another year or two, unless we can capture sales into other market segments. The problem there is a lack of resources.

The avenue to profit is through DM.