How do we get a return on shareholder investment?

Is it make or break time?

If we succeed with the current patent re-exam then the next round of lawsuits should be filed against the greatest revenue potential Corporations, e.g. Microsoft, Intel, Apple, and any other company where the amount would equal 20 million or more settlement dollars.

Continuing on with nickel and dime settlement amounts of 1/2 to 5 million will not put edig in a favorable negotiating position if other alternatives are pursued. This would also expand the total time to process the major settlements if no immediate action is taken against the larger Corporations.

Since the company has committed to be a non-product entity, then our position will be very weak if the Nunchi concept fails to generate any significant interest from potential partners. Producing substantial revenues from Nunchi is presently the only plan under development other than patent revenue. The end result without Nunchi revenue contributions would be to aggressively pursue the filing of lawsuits against the major and large infringers that we have identified.

Without Nunchi or future products to put into the market, our recourse if we are initially successful in generating new patent settlement revenue would be to put the company up for sale.

Having the large outstanding share amount is a negative in any buy out negotiation, but perhaps one of the prominent multi-billion dollar Corporations may be interested, at $1.00 per share, based on no or a minimum Nunchi interest, but including the patent revenue. Even at one dollar we are looking at $293 million dollars which is a large amount considering our present and future financial position with respect to the patent only process. This is equivalent to $586 million in gross patent revenue with DM receiving 40% plus expenses, an amount that is probably not achievable.

If Nunchi is marketable and partners are put into the equation, based on an estimate of a 1-5 year revenue forecast, then the purchase amount may result in an offer from $1.00 to $5.00 or more depending on an agreed revenue estimate and the size of the Nunchi concept market. Even using net revenue to edig of 293 million in year 2 or 3 would yield only a net income of approximately $1.00 per share and at a modest PE, the share price may be in the $5.00 range. Obviously if the Nunchi concept is unique and the market expands to billions, then the income and share price would be higher by a significant amount and a different scenario would be in place. Even then, it may be advantageous to utilize a favorable position in a fast changing market and look at a buyout opportunity.

All evidence points to the fact that a buy-out would be the best scenario for the shareholders, based on continuing the patent lawsuits and with or without the Nunchi concept in place.

I suggest based on current conditions, we market the company for $.50 per share or a buyout price of $146.5 million dollars. Pay off DM and pay the shareholders the remaining. Negotiate an agreed commission on Nunchi if the system exceeds a specific dollar amount in revenue to be paid to all shareholders as dividends each year, based on their buyout shares.