Product sales used to be defined as "... consist primarily of revenue from the sale of hardware and software products. Hardware products consist of DSL test and diagnostics hardware, including systems, modules, and modems. Software products consist of software products for biometric, medical imaging and digital imaging applications, as well as DSL test and diagnostics software."
Contract Revenue used to be defined as "... patent, license and engineering service fees that we receive under agreements relating to Aware’s patents, DSL technology, DSL test and diagnostic technology, and biometrics technology.
Royalties used to be defined as "... royalty payments that we receive under licensing agreements. We receive royalties from customers for the right to use our patents and technology in their chipsets or solutions. Our royalty revenue comes predominantly from ADSL chipset sales by Ikanos Communications, Inc. (“Ikanos”), and Infineon Technologies AG (“Infineon”).
Revenue line categories: These new definitions will be in the 10K to follow
The following category line did not exist in previous quarters: It's amount is NOT included in the above amounts:
Income from patent arrangement:........$ 1,121,000
This was disclosed in today's 8K
".... Net income in the fourth quarter of 2012 included income from a patent arrangement of $1.1 million and an income tax benefit of $3.1 million". " ...The income from a patent arrangement of $1.1 million relates to an agreement we entered into several years ago with an unaffiliated third party under which we assigned patents in return for royalties on proceeds from its patent monetization efforts."
So, if the above is accurate, the $1.1M received in Q4/2012 was NOT ROYALTY but LICENSING FEES related to the some of the 7 parties to the HA lawsuit that settled between April 19 and Dec. 13, 2012 as they each have separate line items.
From the paltry growth on the Royalty line in Q4 (this report), I suspect there were Zero royalties paid as of Dec 31, 2012. They are yet to come.
McCool, Smith law firm most likely structured the contingency agreement so that they get paid lump sum first before anyone. It all makes sense.
This is the most acknowledgement of a direct connection to the HA lawsuit as we have gotten to date without coming right out and naming HA. That has to be worth something.