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

May 20, 2011

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


Source: newswire



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