Computer Automation Inc. Stock Jumps on Reports

Computer Automation Inc. common stock jumped 30% in heavy trading Monday, apparently the result of reports that the Irvine-based company had received a new contract from IBM.

In over-the-counter trading, Computer Automation shares closed at $15.50 a share, up $3.625 for the day.

The company attributed the day’s active trading volume of 504,500 shares to recent news that the computer test equipment maker received a $100,000 prepaid royalty from IBM.

The royalty was paid for a patent and cross licensing agreement with the giant computer maker completed during the quarter ended March 31. Under the terms of the agreement, IBM is licensed under Computer Automation’s patents and Computer Automation is licensed under the IBM patents which apply to its business.

The $100,000 payment was included in Computer Automation’s third-quarter financial results.

Computer Automation chief financial officer William Osmundsen said the company has no assurance that it will receive additional royalty payments from IBM.