Mr. Darby said Vicon’s financial position at September 30, 2010 remained healthy, notwithstanding the operating loss. At year end, the Company had $14.1 million in cash and liquid securities, no interest bearing debt, net tangible equity of $33.6 million (equal to $7.47 per outstanding share) and a working capital ratio of 4.7 to 1.
Product development activities in fiscal 2010 produced the sixth generation of ViconNet®, the Company’s enterprise class physical security information management (PSIM) system. ViconNet Version 6 supports the latest compression technology, browser functionality and improved virtual maxtrix capability. Mr. Darby said an aggressive development schedule is again planned for fiscal 2011 featuring, among other things, enhancements to the ViconNet (PSIM) platform and a new line of mega pixel robotic dome cameras.
As previously reported, on August 16, 2010 the U.S. Patent Office Board of Appeals and Interferences (BPAI) affirmed the examiner’s finding of invalidity of two of the claims asserted by Lectrolarm against the Company and reversed the examiner’s finding of invalidity of the other three asserted claims. The U.S. District Court for the Western District of Tennessee then reopened Lectrolarm’s patent infringement suit against the Company, which had been stayed pending the BPAI’s ruling. The case is now scheduled for trial in early 2012. On November 19, 2010 the Company again petitioned the U.S. Patent and Trademark Office (USPTO) to re-examine the remaining asserted three claims based upon newly discovered prior art. The USPTO has 90 days to decide if it will re-examine these claims. “Clearly we were disappointed the BPAI did not uphold all of the examiner’s findings of invalidity. Based upon the new art, we have filed for re-examination again. We continue to believe the patent is invalid and are committed to proving so, in a court of law if necessary,” said Mr. Darby. Should the matter proceed through trial, the attorneys and expert witnesses have currently estimated their fees at approximately $1.7 million. Mr. Darby also said settlement discussions have been ordered by the court but there can be no assurance a settlement can be reached.