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Message: A buy out scenario using DM as an alternative

The following is an excerpt from the last annual report (10K) explaining the contract elements with DM in the event of a sale or buyout of edig.

"In the event we are acquired or sold or we elect to sell the covered patents or upon certain other corporate events or in the event we terminate the agreement with Duane Morris for any reason, then Duane Morris shall be entitled to collect accrued costs and a fee equal to three times overall time and expenses and a fee of 15% of a good faith estimate of the overall value of the covered patents. We have provided Duane Morris a lien and a security interest in the covered patents to secure this obligation. Should any of the aforementioned events occur, the fees and costs owed to Duane Morris could be substantial and limit our revenues."

It has been estimated that the net income to edig from the total patent infringement suits would approximate 500 million dollars. If this represents 55% because of direct expenses paid to DM, then the total is about 910 million dollars.

Based on the above and estimating accrued costs at 100k or 300k using 3 times the expenses using only current accrued costs, plus 15% of the total value which would equal an additional 137 million and if the 3 times term is based on total overall time and expense since the inception, we don't know what that amount would equal, perhaps another 3 million of 9 at 3 times or a total of 146 million. Too many unknowns to properly calculate the right amount to DM, but probably 150-200 million would be a fair amount.

If we received $4.00 per share or about 1.16 billion less 200 million, our net would be approx 900+ million or an equal amount in stock which may have a greater potential for growth after acquiring edig and it's patent/technology.

Use the info and run with it, lots of scenarios can be developed.

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