Notify Technology Reports Results for the Second Fiscal Quarter Ended March 31, 2011

May 20, 2011, 09:30 ET from Notify Technology Corporation

SAN JOSE, Calif., May 20, 2011 /PRNewswire/ -- Notify Technology Corporation (Pink Sheets: NTFY) today announced financial results for its second fiscal quarter ended March 31, 2011.

Total fiscal second quarter revenue decreased slightly to $1,712,765 in the three-month period ended March 31, 2011 from $1,733,849 during the same period in the prior year.  The net loss for the three month period ended March 31, 2011 was $86,926 or $(0.01) per diluted share. The company's financial performance was down from a net income of $89,103 or $0.01 per diluted share, reported for the same period in the prior year. The decrease in net income for the fiscal quarter reflects our investment in developing our new product line, NotifyMDM, released in April 2011.  

"I am very pleased we released our new NotifyMDM product on schedule," said Paul DePond, President and Chief Executive Officer of the company. "We have increased our investment in product development by 35% as compared to last year's expenditure to validate our commitment to maintain a leadership position in the mobile device management market. We feel that our new NotifyMDM product is so important an addition to our NotifyLink and NotifySync product lines that we have emphasized its development over short term profitability."

Sales and Marketing expenses were $591,866 in the three-month period ended March 31, 2011 compared to $695,294 in the three-month period ended March 31, 2010.  The decrease was the result of decreases in salary and commission expenses resulting from a decline of new NotifyLink account sales partially offset by marketing expenditures in preparation for the release of NotifyMDM.

Research and Development expenses were $762,783 in the three-month period ended March 31, 2011 compared to $520,520 in the three-month period ended March 31, 2010.  The increase was due to an increased investment in our design and testing staff to accelerate the completion of NotifyMDM and meet the demands of a rapidly expanding smart phone market.  

General and Administrative expenses increased slightly to $438,376 in the three-month period ended March 31, 2011 compared to $422,400 for the three-month period ended March 31, 2010.  

About Notify Technology Corporation

Founded in 1994, Notify Technology Corporation is an independent software vendor (ISV) who has specialized in wireless mobility solutions and services for the past 10 years. Notify's products including NotifyLink, NotifySync and NotifyMDM support all major smart phone and tablet platforms independent of wireless carrier or network.  Notify sells its mobility products directly and through authorized resellers internationally. Notify is an official Apple iPhone Enterprise Development Partner, Android Development Partner, BlackBerry Development Partner, Windows Mobile and Windows Phone Development Partner, Symbian Alliance Member, and HP/Palm Select Partner. The Company is headquartered in San Jose, California with product development and technical support located in Canfield, Ohio. For more information, visit http://www.notifycorp.com or contact 408-777-7930.

Forward-Looking Statements: This press release contains forward-looking statements related to Notify Technology Corporation that involve risks and uncertainties, including, but not limited to, statements regarding the changes in asset balances on the balance sheet, the launch of new wireless devices and product lines and the improving performance of the Company's wireless product.  Those statements are based on unaudited current information and expectations and there are important factors that could cause actual results to differ materially from those anticipated by such statements. These risks include, but are not limited to, Notify's ability to deliver products and manage growth, its ability to continue to improve its existing products or develop new products or technologies, and its ability to maintain revenue growth as well as other risks.  In particular, management cannot predict future NotifyLink, NotifySync and NotifyMDM revenues with any accuracy and does not know whether NotifyLink, NotifySync or NotifyMDM revenues will continue to grow at the rates recently experienced, if at all.  Increasing NotifyLink, NotifySync and NotifyMDM revenues will require, among other things, continued investments in the Company's sales and marketing organization and Notify has limited available cash resources to make these investments.  These forward-looking statements are made in reliance on the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995.  For further information about these factors that could affect Notify Technology's future results, please see the Company's filings with the Securities and Exchange Commission.  Prospective investors are cautioned that forward-looking statements are not guarantees of performance.  Actual results may differ materially from management's expectations.

Contacts:

At Notify Technology Corporation: Jerry Rice, Chief Financial Officer Phone: 408-777-7927 jerry.rice@notifycorp.com

(Financial Tables Follow)

NOTIFY TECHNOLOGY CORPORATION

CONDENSED STATEMENTS OF INCOME

Three-Month Periods

Six-Month Periods

Ended March 31,

Ended March 31,

2011

2010

2011

2010

Revenue:

  Product revenue

$  1,712,765

$ 1,733,849

$ 3,553,251

$ 3,530,494

Total revenue

1,712,765

1,733,849

3,553,251

3,530,494

Cost of revenue:

  Product cost

7,615

5,719

16,691

14,783

  Royalty payments

1,141

1,405

3,118

3,395

Total cost of revenue

8,756

7,124

19,809

18,178

Gross profit

1,704,009

1,726,725

3,533,442

3,512,315

Operating expenses:

  Research and development

762,783

520,520

1,484,333

974,370

  Sales and marketing

591,866

695,294

1,260,174

1,411,284

  General and administrative

438,376

422,400

864,413

907,584

Total operating expenses

1,793,025

1,638,214

3,608,920

3,293,238

Income/(loss) from operations

(89,016)

88,511

(75,478)

219,077

Other interest (expense),  net

2,090

592

3,855

1,679

Net income (loss)

$  (86,926)

$ 89,103

$ (71,623)

$ 220,756

Basic net income (loss) per share

$  (0.01)

$  0.01

$  (0.01)

$ 0.02

Basic weighted average shares outstanding

14,111,217

14,075,662

14,111,217

14,075,662

Diluted net income (loss) per share

$  (0.01)

$  0.01

$  (0.01)

$  0.01

Diluted weighted average shares outstanding

14,111,217

15,883,942

14,111,217

16,008,031

NOTIFY TECHNOLOGY CORPORATION

Condensed Balance Sheets

March 31,

Sept. 30,

2011

2010

Unaudited

Audited

 Assets:

Current assets:

Cash and cash equivalents

$  2,592,410

$  2,526,654

Accounts receivable, net

431,631

292,040

Other assets

34,920

44,570

Total current assets

3,058,961

2,863,264

Non-current assets

Property and equipment, net

275,380

306,380

Lease deposits

15,602

15,602

Total non-current assets

290,982

321,982

Total assets

$ 3,349,943

$  3,185,246

Liabilities and shareholders' deficit

Current liabilities:

Current portion of capital lease obligation

$         3,303

$       3,369

Accounts payable

59,261

55,378

Accrued payroll and related liabilities

384,457

405,203

Deferred revenue

3,141,631

2,927,067

Other accrued liabilities

132,810

123,066

Total current liabilities

3,721,462

3,514,083

Long-term liabilities:

Long-term Deferred revenue

100,419

112,696

Long-term capital lease obligations

1,677

3,174

    Total long-term liabilities

102,096

115,870

Total liabilities

3,823,558

3,629,953

Shareholders' deficit:

Preferred stock

- -

- -

Common stock

14,111

14,111

Additional paid-in capital

23,559,437

23,516,722

Accumulated deficit

(24,047,163)

(23,975,540)

Total shareholders' deficit

(473,615)

(444,707)

Total liabilities and shareholders' deficit

$  3,349,943

$  3,185,246

SOURCE Notify Technology Corporation



RELATED LINKS

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