Notify Technology Reports Results for the Third Fiscal Quarter Ended June 30, 2005
Company’s wireless revenue segment is up 68% from same period last year.

For Immediate Release

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


San Jose, CA, August 19, 2005 -- Notify Technology Corporation (OTC: NTFY) today announced financial results for its third fiscal quarter ended June 30, 2005.

The Company’s net loss for the three month period ended June 30, 2005, was $252,695, or a net loss per share of $0.02, compared to a net loss of $16,383, or a net loss per share of $0.00, reported for the corresponding period of fiscal 2004.

The $866,633 of revenue reported in the third fiscal quarter of 2005 compares to $945,839 of revenue in the same period of fiscal 2004. The gross margin in the third fiscal quarter was 95.9% compared to 85.8% in the same quarter of fiscal 2004 due to a change in product mix.

The Company’s NotifyLink wireless product line revenue improved to $553,596 for the three-month period ended June 30, 2005 from $329,882 for the three-month period ended June 30, 2004. The service portion of the Visual Got Mail Solution product line was $295,069 in the three-month period ended June 30, 2005 compared to $412,980 in the comparable period of fiscal 2004. The level of Visual Got Mail service revenue is expected to continue to decrease in future quarters as the installed base the Visual Got Mail product services continues to decline due to our customer’s discontinued marketing of the service.

The increase in the wireless revenue is the result of increased sales and marketing efforts. The Company’s sales and marketing expense, which are primarily made up of the Company’s sales and the technical support organization, increased to $405,064 for the three-month period ended June 30, 2005 from $257,966 in the corresponding period of fiscal 2004.

The Company continues to focus its product development, marketing and sales on its NotifyLink wireless products. The Company has recently released several new versions of its NotifyLink Hosted Edition product targeting the Small to Medium Business (“SMB”) market. In addition, the Company is in its final stages of releasing new versions of its NotifyLink Enterprise Edition that will provide wireless synchronization for email, calendar, contacts, and tasks for a variety of IMAP4 email systems including the Sun Java Messaging System, the Oracle Collaboration Suite, the Mirapoint Messaging System, the Scalix Messaging Platform, and the Stalker Communigate Pro Messaging System.

“For the past three years we have been primarily focused on the Novell GroupWise marketplace which has provided us with the opportunity to establish Notify as a leading provider of wireless solutions in the GroupWise market,” said Paul DePond, Chief Executive Officer. “We have also been developing a family of products targeted at the IMAP4 market segment that is in dire need of a wireless email and PIM synchronization solution. Over the next months, Notify will launch these new products jointly marketed with several major IMAP4 vendors.”

About Notify Technology Corporation

Founded in 1994, Notify Technology Corporation, (OTC: NTFY) is an innovative communications company offering wireless and service products. Notify’s wireless solutions provide secure synchronized email and PIM access and management to any size organization on a variety of wireless 2-way devices and networks. Notify sells its wireless products directly and sells its wireline products through CLECs. The company is headquartered in San Jose, California. For more information, visit http://www.notifycorp.com or contact 408-777-7920.

Forward-Looking Statements: This press release contains forward-looking statements related to Notify Technology that involve risks and uncertainties, including, but not limited to statements regarding the development of NotifyLink revenue and the service revenue on the Visual Got Mail Solution. Those statements are based on 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, our ability to deliver products and manage growth, the continuance of certain customer voice mail programs, the expectation that the revenue from the service portion of the Visual Got Mail Solution will decline due to customer decisions to withdraw from the consumer market that the Notify product supports, as well as other risks. In particular, we cannot predict future NotifyLink revenues with any accuracy and do not know whether NotifyLink revenues will continue to grow at the rates we have recently experienced. Increasing NotifyLink revenues will require continued investments in our sales and marketing organization, and we have 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 expectations.

(Financial Tables Follow)


NOTIFY TECHNOLOGY CORPORATION

CONDENSED UNAUDITED STATEMENTS OF OPERATIONS

Three-Month Periods

Nine-Month Periods

Ended June 30,

Ended June 30,

2005

2004

2005

2004

Revenue:

Product revenue

$ 604,200

$ 408,475

$ 3,067,338

$ 1,085,433

Service revenue

262,433

437,364

1,113,602

1,326,001

Royalty revenue

--

100,000

--

154,975

Total revenue

866,633

945,839

4,180,940

2,566,409

Cost of revenue:

Product cost

25,586

77,504

1,278,912

421,760

Service cost

10,175

56,963

34,112

158,306

Total cost of revenue

35,761

134,467

1,313,024

580,066

Gross profit

830,872

811,372

2,867,916

1,986,343

Operating expenses:

Research and development

266,796

216,356

779,816

691,418

Sales and marketing

405,064

257,966

1,240,171

637,140

General and administrative

412,411

352,932

1,185,791

1,103,276

Total operating expenses

1,084,271

827,254

3,205,778

2,431,834

Loss from operations

(253,399)

(15,882)

(337,862)

(445,491)

Other interest (expense), net

704

(501)

2,053

(9,939)

Net loss

$ (252,695)

$ (16,383)

$ (335,809)

$ (455,430)

Basic and diluted net loss per share

$ (0.02)

$ (0.00)

$ (0.02)

$ (0.10)

Weighted average shares outstanding


13,968,995


4,593,995


13,921,486


4,597,877


Notify Technology CORPORATION

Condensed Unaudited Balance Sheets

June 30,

Sep. 30,

2005

2004

Assets:

Current assets:

Cash and cash equivalents

$ 610,908

$ 1,026,121

Accounts receivable, net

470,494

485,425

Other assets

66,824

56,598

Total current assets

1,148,226

1,568,144

Property and equipment, net

153,504

170,391

Total assets

$ 1,301,730

$ 1,738,535

Liabilities and shareholders’ deficit

Current liabilities:

Current portion of capital lease obligation

24,770

14,571

Accounts payable

24,487

64,012

Accrued payroll and related liabilities

364,821

378,057

Deferred revenue

1,162,239

1,081,175

Customer advances

60,054

271,114

Other accrued liabilities

195,051

173,168

Total current liabilities

1,831,422

1,982,097

Long-term capital lease obligations

27,552

16,623

Total liabilities

1,858,974

1,998,720

Shareholders' deficit:

Common stock

13,969

13,814

Additional paid-in capital

22,840,831

22,802,236

Accumulated deficit

(23,412,044)

(23,076,235)

Total shareholders’ deficit

(557,244)

(260,185)

Total liabilities and shareholders' deficit

$ 1,301,730

$ 1,738,535


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©2005 Notify Technology Corporation. All Rights Reserved.

 

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