Struggling Digitext Renegotiates Sales Pact

Digitext, a struggling Thousand Oaks company that makes a specialized computer keyboard, has revamped its marketing agreement with computer giant Wang Laboratories.

Digitext’s keyboard rapidly enters text into a computer and is aimed at helping law offices, government agencies and other major generators of text to store information more quickly.

The company originally assigned exclusive marketing rights for the product to Wang, which was expected to sell the keyboard along with its other computer products. Wang also was to have bought a certain minimum number of keyboards for resale.

However, the companies decided to revamp their agreement after full-scale production of Digitext’s keyboard, which was to have started last fall, was delayed when test models revealed mechanical problems.

Digitext said its new agreement with Wang is non-exclusive, meaning Digitext is free to sell its keyboard through other vendors as well. The new pact also does not require Wang to buy a minimum number of keyboards, and both companies can earn commissions when their products are sold together in a package.

Wang, based in Lowell, Mass., also retained a warrant to buy 1.2 million Digitext common shares for $4.25 a share. If exercised, the warrant--which expires in December--would give Wang about 19.5% of the company. The stock, which peaked at $15 a share in late 1986, closed Monday at $1.75 in over-the-counter trading.

Separately, Digitext said it lost $942,183 in its fiscal first quarter that ended June 30, on sales of only $50,595.

Production delays and cost of redesigning the product resulted in Digitext’s first-quarter loss, which compared to a $690,421 loss on revenue of $531,573 a year earlier. In its full fiscal year that ended last March 31, Digitext lost $4.6 million.