Letter From the President and CEO of e.Digital Corp.Business Editors SAN DIEGO--(BUSINESS WIRE)--Nov. 14, 2001 This Letter is a Direct Communication From the President And CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of e.Digital Corp. (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). :EDIG EDIG European Defence Industries Group ) Dear Shareholder: Today we filed our Form 10-Q Form 10-Q See 10-Q. with the Securities and Exchange Commission, summarizing the quarter ended September 30, 2001. Per our Shareholder Communications policy, I would like to provide you with a brief update of our recent business. Revenues for products and services for the quarter ended September 30, 2001, totaled $506,996, and for the six months ended September 30, 2001, revenues totaled $1,176,275. There was an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. for the quarter of $1,080,127, or $0.01 per share. Our e.Digital online store opened for business on November 2 at www.edigital-store.com, and sales of our MXP MXP In currencies, this is the abbreviation for the Mexican Peso. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. (TM) 100 digital music and voice player/recorders have exceeded expectations given the limited marketing that has been completed to date. Additional marketing campaigns and media coverage, coordinated by Fleishman-Hillard, are scheduled to coincide with the busiest shopping season of the year and target prime customers for our MXP 100 product line. In addition to using MXP 100's unique VoiceNav(TM) speaker-independent voice navigation interface, users can navigate while playing music using e.Digital's Smart Song Selection(TM) (S3) feature. S3 allows consumers to scan through their entire music catalog and begin playing their next selected song immediately. Our product also features battery life of over 12 hours when fully charged. We are very pleased with the early response to our MXP 100 and its unique features from both consumers and the media. We are scheduled to add new e.Digital-developed products to our online store, including the TREO TREO The Receiving End of Sirens (band) 10(TM) digital jukebox and the MP2000 Internet music player during the holiday shopping season. We also expect to add to the store selected accessories and products from certain partners and licensees, based on the value they add to our product line and the value they offer to consumers. Marketing programs planned with these partners and licensees are expected to contribute to increased sales of consumer products through our online store and through additional sales channels. Direct sales to consumers provide a much higher profit margin, and ultimately serve to strengthen our OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and licensing and royalty fees, engineering and service fees. During the current fiscal quarter, we expect to record revenue from final shipments of Cquence Mobile products to Lanier Healthcare. We are successfully transitioning away from dependence on revenue from Lanier with revenue increasing from our consumer product sales, and our increasing, ongoing work for licensees and OEM customers. To provide additional working capital for the MXP 100 digital audio player See digital music player, digital media hub and digital media server. rollout, we obtained $1 million from accredited accredited recognition by an appropriate authority that the performance of a particular institution has satisfied a prestated set of criteria. accredited herds cattle herds which have achieved a low level of reactors to, e.g. working capital lenders. The notes are secured by inventory and accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying but interest is deferred until the end of 2002. In the current capital environment, this is an effective means of funding inventory with a minimum of dilution and financial risk to the Company. We are pleased with the progress of licensee Musical Electronics, Ltd., who is currently delivering an e.Digital-developed portable digital music encoder and player product -- based on a low-cost digital signal processor A digital signal processor (DSP) is a specialized microprocessor designed specifically for digital signal processing, generally in real-time computing. Characteristics of typical Digital Signal Processors
We have representatives at COMDEX The former, premier computer trade show in the U.S. Although it grew into an end user event, it was originally created for dealers and distributors (it was the COMputer Dealers EXposition). in Las Vegas this week, where our technology, particularly our MXP 100, is being shown by e.Digital and by certain technology allies, partners, and licensees in various technology suites. We are pleased to announce that today at COMDEX our MXP 100 was featured on TechTV, and we expect to receive further media coverage from the show. We are pursuing opportunities to bundle our products with related products and services including personal computers, and we continue working with a number of OEM customers and licensees on portable digital music players, voice recorders, and digital audio products for automotive applications. Our manufacturing partners possess sufficient facilities and resources to increase output as needed as needed prn. See prn order. according to demand for our consumer products from consumers and OEMs alike. As part of our continuing engineering development efforts, we are pleased to announce the promotion of Brian Gray to the position of Director of Engineering. Brian holds a Master's degree in Electrical Engineering (with a focus on signal processing) from Rensselaer Polytechnic Institute Rensselaer Polytechnic Institute, at Troy, N.Y.; coeducational; founded and opened 1824 as Rensselaer School; chartered 1826. It was called Rensselaer Institute from 1837 to 1861. in Troy, New York Troy is a city in New York, U.S., and the county seat of Rensselaer County. As of the 2000 census, the population was 49,170; in 1910, the population was 76,813. The city's motto is Ilium fuit, Troja est, which means "Troy was, Troy is. , and has over 14 years of experience designing and implementing real-time embedded DSP (1) (Digital Signal Processor) A special-purpose CPU used for digital signal processing applications (see definition #2 below). It provides ultra-fast instruction sequences, such as shift and add, and multiply and add, which are commonly used in math-intensive systems. Our branded consumer products are being launched to consumers, with more on the way. Certain OEMs and licensees are beginning distribution of "Powered by e.Digital" products through their sales and distribution channels, and more are on the way. After two years in the digital music space, we believe we are exceptionally well positioned and well prepared with our consumer product designs, distribution and support services network, engineering capabilities, technology alliances, partnerships, and customers, to turn our experience into industry leadership, and more importantly, increasing revenue and profitability. Sincerely yours, Alfred H. Falk President and CEO About e.Digital e.Digital Corp. offers an engineering partnership for the world's leading electronics companies to link portable digital devices to PCs and the Internet. e.Digital develops and markets to consumer electronics manufacturers complete end-to-end solutions for delivery and management of open and secure digital media with a focus on music players/recorders and portable digital voice recorders. Engineering services range from the licensing of e.Digital's patented MicroOS(TM) and MicroCAM(TM) technologies to custom software and hardware development, industrial design and manufacturing services. For more information on the company, please visit www.edig.com. Safe Harbor statement under the Private Securities Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. Reform of 1995: This document contains forward-looking statements relating to future performance, technology and product development that may affect future results and the future viability of the company. Actual results could be affected or differ materially from those projected in the forward-looking statements as a result of risks and uncertainties, including future products and results, technological shifts, potential technical difficulties that could delay new products, competition, general economic factors, pricing pressures, the uncertainty of market acceptance of new products and services by OEMs and end-user customers, and other factors identified and discussed in the company's most recent filings with the Securities and Exchange Commission. These forward-looking statements are based on information and management's expectations as of the date hereof. Future results may differ materially from the company's current expectations. Note: e.Digital, MicroOS, MXP, Music Explorer, and Smart Song Selection are trademarks or registered trademarks of e.Digital Corp. All other company, product, and service names are the property of their respective owners. |
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