Signature Devices Inc. (SDVI) publishes, creates, develops and manufactures advanced information technologies, including computer systems, software and electronic products. The company also publishes software, including video games and commercial products. The Company owns Graffiti Entertainment Inc., which is a publisher and wholesale vendor of console-based (not online) video games with several major retailers, including Wal-Mart, Best Buy, Target, Game Stop, Toys “R” Us and Amazon.com, and distributes through Navarre Distribution when required by certain retailers. Graffiti Entertainment was granted “publisher” status by Nintendo of America for Nintendo DS and Nintendo Wii game consoles and by Sony Computer Entertainment of America for the Playstation Portable and the Playstation 3 game consoles.

SDVI also owns a proprietary online gaming community – Phatyaffle (www.phatyaffle.com). Phatyaffle is an online community similar to “My Space,” but is designed for casual, light and hardcore video game players and game developers, and allows members to network through Web pages and the video games they play. Phatyaffle’s services generate revenue through subscription services, advertising space and royalties. Subscription services are obtained through the organically grown community portal that connects gamers with games. Advertising revenue is acquired through the use of Web site placement ads and in-game advertising. Royalties come from the agreements with Graffiti Entertainment Inc. and online sales of PC video games.

Share Statistics Aug-14-09			2007	2008	%Chg
Symbol	SDVI	Revenue, Mn	n/a	n/a	n/m
Current price	$0.0015	Gross margin	n/a	n/a	n/m
52wk Range:	$0.00-$o.03	Oper. margin	n/a	n/a	n/m
Avg Vol:	17.34M	Net margin	n/a	n/a	n/m
Market Cap.	43,175
Dil. Shares Outst.	28.79M	EPS, $	n/a	n/a	n/m

Source: Reuters.com, SEC Filings.

No recent financial data available.

No consensus analysis data available.

The Company’s status of a fully integrated developer and publisher enables it to profit from multiple revenue streams and allows it to bring its own games to market faster and at less cost. SDVI has developed software for the world’s leading game publishers, including Electronic Arts, Crytek, Expresso Fitness and SNK Playmore. The Company has also developed embedded systems and electronics for companies such as Pacific Consultants (now PEMSTAR) for the product Land Warrior. Titles that SDVI and its teams have developed or contributed to include: Samuari Shodown V, Medal Of Honor Pacific Assault, FarCry, The Immortal, Halo, Microsoft Baseball, Wing Commander III, Centipede 3D, Jeff Gordon Racing PC, Battlezone II, Sacrifice, Heavy Gear, Shadowman, Unreal Tournament, and more.

The Company also owns a proprietary, patented technology known as “RangeBox” that allows all existing wireless links in the 900MHz, 2.4GHz and 5.xGHz ISM bands to operate with improved speed and over greater distances than is otherwise possible. RangeBox allows radio frequency channels such as Wi-Fi and other bands to increase the range of the signals without increasing power. While RangeBox provides the unique ability to extend link range beyond what is normally possible when operating with any other existing radio technology, including MIMO, it requires no changes to any other RF hardware components the customer may have, and is indeed compatible with other more difficult to integrate or expensive range enhancement technologies such as MIMO or bi-directional amplifiers.

In March 2009, the Company released Black Sigil: Blade of the Exiled, a Role Playing Game (RPG). The game includes vivid environments that create a realistic yet imaginative landscape with 40 to 50+ hours of game play and tons of side-quests. Prior the launch, Graffiti Entertainment received a “Most Wanted RPG of 2009″ Editor’s Choice Award from RPGamer.com for their Black Sigil: Blade of the Exiled for Nintendo. Graffiti shipped its role playing game to distributors in United States and Canada. The Company has also signed a distribution agreement with Skream Limited for the Role Playing Game Black Sigil: Blade of the Exiled. Skream will distribute the game to retailers in Europe in five languages including English, French, Italian, German and Spanish.

Year-to-date, the Company’s subsidiary Graffiti Entertainment launched C.O.R.E., Air Conflicts: Aces of World War II, and Black Sigil: Blade of the Exiled. The games sell for $29.99 retail and the company sells them for $23.50 wholesale. Cost of Goods and other associated costs are approximately $9.50 per unit. Graffiti Entertainment also plans on shipping Jakers! Let’s Explore for PC and Wii(TM) and two Moomin titles for Nintendo DS(TM). Graffiti also has several other titles in development for various platforms that should ship in the fourth quarter of 2009. For 2009, the Company estimates a gross profit between $1,244,145 – $3,028,155 with an EBITDA between $764,145 – $2,548,155. In estimating the revenues for 2009, the SDVI management gave a range with the low end being the very conservative estimates and the high end being an average sales of similar games.

The Company’s subsidiary Graffiti Entertainment, recently released its highly anticipated first-person shooter, “C.O.R.E.,” to North American retail outlets and is available exclusively on Nintendo DS(TM). “C.O.R.E.” is a story-driven sci-fi shooter that has been designed specifically for hardcore gamers, a segment of DS owners that have been overlooked in the past. It offers a solid, fast-paced multiplayer campaign, diverse environments and even gives players the ability to modify controls, to allow for a custom and precise control scheme. “C.O.R.E.” is rated “M” for Mature by the ESRB and retails for $29.99.

Considered by some as a curiosity in the mid-1970s, the computer and video gaming industries have grown from niche markets to mainstream. Overall computer and video game industry hardware, software and peripheral sales climbed to $22 billion in 2008, with entertainment software sales comprising $11.7 billion of that total figure—a 22.9% jump over the previous year, according to the Entertainment Software Association (ESA) report. The NPD Group revealed that, in 2008, total U.S. video game console software sales reached $8.9 billion (189.0 million units), PC game sales hit $701.4 million (29.1 million units), and portable software topped last year’s record sales with $2.1 billion (79.5 million units) in revenue. Overall video game sales seem to be holding up relatively well in a difficult economy. In 2009, even as demand in other industries has plunged, video games have shown resilience. Overall in 2009, the global video game software market should continue double-digit growth as the audience for entertainment is expanding as games have become an integral part of leisure time.

This summer the Company received a $400,000 credit line for accounts receivables financing for Graffiti Entertainment to help produce games for outstanding orders. These are two stages financing tools that allow Graffiti Entertainment to produce games. The first stage is purchase order financing, whereby the creditor will finance the cost to build games based on purchase orders. After the games are delivered there is a second stage of financing that replaces the first stage called invoice financing or accounts receivable financing. The Company now has both stages of financing in place and are moving forward to fulfill outstanding orders.

Source: http://stockcharts.com/h-sc/ui

Signature Devices trades below its 13-day moving average. This is generally considered to be an indication of a bearish trend.

The MACD for the Company currently indicates a strong bullish signal for two reasons. First, the MACD is above the signal line, a 9-day moving average. Second, the MACD is above 0 which implies that the underlying moving averages are trending higher.

Signature Devices is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.

Company Name	Ticker	Price per	Mrkt. Cap.	P/E		P/S
Aug-14-2009	symbol	Share, $	$ Mn	2009	2010	2009	2010
Majesco Entertainment Co.	COOL	1.25	61.4	8.93	5.43	0.71	0.65
Take Two Interactive Software Inc.	TTWO	10.18	816.9	n/m	16.16	0.8	0.6
THQ Inc.	THQI	6.56	442.6	43.73	18.22	0.52	0.49
Konami Corp.	KNM	18.85	2,520	15.97	12.65	n/a	n/a
Electronic Arts Inc.	ERTS	21.05	6,810	21.70	17.11	1.59	1.52
Median				18.84	16.16	0.77	0.65
Signature Devices	SDVI	0.0015	0.43	n/a	n/a	n/a	n/a

Source: Thomson Financial, Yahoo! Finance, Analyst estimates.

Net Share Purchase Activity

Insider Purchases – Last 6 Months Shares Trans Purchases N/A N/A Sales N/A N/A Net Shares Purchased (Sold) N/A N/A Total Insider Shares Held N/A N/A % Net Shares Purchased (Sold) N/A N/A

Net Institutional Purchases – Prior Qtr to Latest Qtr Shares Net Shares Purchased (Sold) N/A % Change in Institutional Shares Held N/A

Data provided by Thomson Financial

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