Given that currently EDIG’s primary income is patent license revenue, I fully understand that there may be fiscal quarters where they show a goose egg in IP revenue. As stated in the recent 10Q,

“A number of factors, many outside our control, affect the amount of each licensing arrangement and the timing of when parties elect to license our intellectual property. These factors include the number and nature of infringing products, estimates of past and future infringement, importance of the infringing technology to the total product, the legal environment surrounding a particular case, estimates of the cost, time and complexity of litigation through trial and possible appeals as well as other factors.”

To expect millions of IP money every quarter is unfair to management. Litigation and settlement agreements take time. They filed against the CO 19 on 3 Nov 09 so had only 2 months to settle and show IP revenue in 3Q FY10 with defendants. That’s a tall order to fill. In fact, they did reach a settlement in that 2 months but the revenue won’t be booked until Nov 10. Each settlement has its own uniqueness’s. From a quarter-to-quarter perspective and perhaps year-to-year, it’ll be feast or famine for IP revenue. I’m OK with that because that is the nature of IP litigation.

So far in FY10, EDIG has received $1.25M in IP revenue and that was from Samsung. In FY09, they received $10.1M in IP revenue so will need $8.85M this quarter to match FY09 IP revenues. Can it happen? Sure, but will it? Depends on many things as referenced above but if not, can’t be attributed to RP or FF not performing. IP revenue is completely in DM’s hands. You can bet when DM recommends a settlement to EDIG, they accept it. EDIG doesn’t fire back, “Squeeze another million out of them!”

Didn’t RP say his and Fred Falk’s retirement funds are tied to EDIG’s performance? I believe they are working hard to increase shareholders’ investment value and I’m happy with their performance over the last three years. What EDIG has going for them is no debt, have millions in the bank, enjoy multiple cross-licenses, have identified around 150 more companies that are license candidates and have a world-class IFE device they are selling. Imagine if they partner with a major company on IFE and possible new projects, sell their eVU to a major airline, attract microcap funds and retail investors and/or continue their perfect IP settlement record over the next few years. I can easily see them attracting a high-powered CEO with a proven track record and things would certainly heat up at EDIG HQ. I could also see them as an attractive buyout candidate for a major tech company if the price was right…say $5-7 per share.

I'm off to the gym.