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Notify Technology Reports Results for the Second Fiscal Quarter Ended March 31, 2012

May 16, 2012

SAN JOSE, Calif., May 16, 2012 /PRNewswire/ — Notify Technology Corporation (NTFY.PK) today announced financial results for its second fiscal quarter ended March 31, 2012.

Total fiscal second quarter revenue decreased to $1,624,524 in the three-month period ended March 31, 2012 from $1,712,765 during the same period in the prior year. The net loss for the three month period ended March 31, 2012 was $305,462 or $(4.33) per diluted share. The company’s financial performance was down from a net loss of $86,926 or $1.23 per diluted share, reported for the same period in the prior year. The decrease in net income for the fiscal quarter reflects the combined impact of a decline in sales of the NotifyLink product line and the expense of our investment in developing our new mobile device management product line, NotifyMDM.

“We released our NotifyMDM integrated with CommonTime’s MSuite product in April 2012 now available to CommonTime’s new and current customers around the world as CommonTime MDM,” said Paul DePond, President and Chief Executive Officer of the company. “We also took steps to streamline our operations while still maintaining our ability to service our existing customers and continue enhancing our NotifyMDM product.”

Sales and Marketing expenses were $665,512 in the three-month period ended March 31, 2012 compared to $591,866 in the three-month period ended March 31, 2011. The increase was the result of additions to our outside sales force and by marketing expenditures to support the new product introduction of NotifyMDM.

Research and Development expenses were $852,109 in the three-month period ended March 31, 2012 compared to $762,783 in the three-month period ended March 31, 2011. The increase was due to an increased investment in our design and testing staff to accelerate the development of our NotifyMDM product and meet the demands of a rapidly expanding smart phone and tablet market.

General and Administrative expenses decreased to $386,745 in the three-month period ended March 31, 2012 compared to $438,376 for the three-month period ended March 31, 2011. The decrease was in compensation and legal expense.

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 11 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. 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.


                                                (Financial Tables Follow)

                                              NOTIFY TECHNOLOGY CORPORATION
                                           CONDENSED STATEMENTS OF OPERATIONS

                                                                              Three-Month Periods          Six-Month Periods
                                                                                Ended March 31,             Ended March 31,
                                                                                   2012        2011                   2012        2011
                                                                                   ----        ----                   ----        ----

    Revenue:
       Product revenue                  $1,624,524               $1,712,765              $3,231,375             $3,553,251
    Total revenue                        1,624,524                1,712,765               3,231,375              3,553,251
                                         ---------                ---------               ---------              ---------

    Cost of revenue:
       Product cost                         24,339                    7,615                  39,626                 16,691
       Royalty payments                      3,405                    1,141                   4,170                  3,118
                                             -----                    -----                   -----                  -----
    Total cost of revenue                   27,744                    8,756                  43,796                 19,809
                                            ------                    -----                  ------                 ------
    Gross profit                         1,596,780                1,704,009               3,187,579              3,533,442
                                         ---------                ---------               ---------              ---------

    Operating expenses:
                                    Research and
                                    development         852,109                 762,783              1,707,702               1,484,333
                                    Sales and
                                    marketing           665,512                 591,866              1,407,412               1,260,174
                                    General and
                                    administrative      386,745                 438,376                795,904                 864,413
                                                        -------
    Total operating expenses             1,904,366                1,793,025               3,911,018              3,608,920
                                         ---------                ---------               ---------              ---------

    Income/(loss) from operations         (307,586)                 (89,016)               (723,439)               (75,478)

    Other interest (expense),  net           2,124                    2,090                   7,216                  3,855

    Net income (loss)                    $(305,462)                $(86,926)              $(716,223)              $(71,623)
                                         =========                 ========               =========               ========

    Basic net income (loss) per
     share                                  $(4.33)                  $(1.23)                $(10.10)                $(1.02)
                                            ======                   ======                 =======                 ======

    Basic weighted average shares
     outstanding                            70,541                   70,541                  70,541                 70,541
                                            ======                   ======                  ======                 ======

    Diluted net income (loss) per
     share                                  $(4.33)                  $(1.23)                $(10.10)                $(1.02)
                                            ======                   ======                 =======                 ======

    Diluted weighted average shares
     outstanding                            70,541                   70,541                  70,541                 70,541
                                            ======                   ======                  ======                 ======

                                                           NOTIFY TECHNOLOGY CORPORATION
                                                             Condensed Balance Sheets

                                                                                                                                                                                Mar. 31,                 Sept. 30,
                                                                                                                                                                                     2012                      2011
                                                                                                                                                                                                               ----
                                                                                                                                                                               Unaudited                   Audited
    Assets:
    Current assets:
                                                                                                                                                 Cash and cash
                                                                                                                                                 equivalents                                 $1,179,898                $2,040,580
                                                                                                                                                 Accounts
                                                                                                                                                 receivable,
                                                                                                                                                 net                                            347,567                   271,251
                                                                                                                                                Other assets                                     41,701                    83,235

    Total current assets                                                                                                                                            1,569,166                 2,395,066
                                                                                                                                                 Non-current
                                                                                                                                                 assets
                                                                                                                                                 Property and
                                                                                                                                                 equipment,
                                                                                                                                                 net                                            254,112                   312,272
                                                                                                                                                 Lease
                                                                                                                                                 deposits                                        15,602                    15,602

                                                                                                                                                 Total non-
                                                                                                                                                 current assets                                 269,714                   327,874

                                                                                                                                                Total assets                                 $1,838,880                $2,722,940

    Liabilities and shareholders' deficit
    Current liabilities:
                                                                                                                                                 Current
                                                                                                                                                 portion of
                                                                                                                                                 capital
                                                                                                                                                 lease
                                                                                                                                                 obligation                                      $2,746                    $2,665
                                                                                                                                                 Accounts
                                                                                                                                                 payable                                         18,081                    65,103
                                                                                                                                                 Accrued
                                                                                                                                                 payroll and
                                                                                                                                                 related
                                                                                                                                                 liabilities                                    408,150                   426,151
                                                                                                                                                 Deferred
                                                                                                                                                 revenue                                      2,728,360                 2,839,051
                                                                                                                                                 Other accrued
                                                                                                                                                 liabilities                                    109,142                   128,915

    Total current liabilities                                                                                                                                       3,266,479                 3,461,885
    Long-term liabilities:
                                                                                                                                                 Long-term
                                                                                                                                                 Deferred
                                                                                                                                                 revenue                                         75,865                    88,142
                                                                                                                                                 Long-term
                                                                                                                                                 capital
                                                                                                                                                 lease
                                                                                                                                                 obligations                                     10,726                    12,120

         Total long-term liabilities                                                                                                                                   86,591                   100,262
                                                                                                                                                                       ------                   -------
    Total liabilities                                                                                                                                               3,353,070                 3,562,147
                                                                                                                                                                    ---------                 ---------
    Shareholders' deficit:
                                                                                                                                                 Preferred
                                                                                                                                                 stock                                              - -                       - -
                                                                                                                                                Common stock                                         71                        71
                                                                                                                                                 Additional
                                                                                                                                                 paid-in
                                                                                                                                                 capital                                     23,665,271                23,624,030
                                                                                                                                                 Accumulated
                                                                                                                                                 deficit                                   (25,179,532)              (24,463,308)

    Total shareholders' deficit                                                                                                                                   (1,514,190)                  (839,207)
                                                                                                                                                                   ----------
                                                                                                                                                 Total
                                                                                                                                                 liabilities and
                                                                                                                                                 shareholders'
                                                                                                                                                 deficit                       $1,838,880                $2,722,940

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

SOURCE Notify Technology Corporation


Source: PR Newswire