e.Digital Corporation Reports Fiscal 2006 Results; Company Provides Update on eVU(TM) Business and Flash Memory IP Efforts.SAN DIEGO San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. -- e.Digital Corporation e.Digital Corporation (OTCBB: EDIG) is a public company based in San Diego, California and trades over-the-counter on the OTCBB under the ticker symbol "EDIG." Founded in 1988 as Norris Communicatons (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :EDIG EDIG European Defence Industries Group ), a leading innovator of proprietary, secure digital video technology and products, and patented technology in the utilization of flash memory in portable devices, today reported revenues for its fiscal year 2006 ended March 31, 2006 totaled $3.3 million compared to revenues of $4.3 million for fiscal 2005. The decrease was due primarily to the inability or unwillingness of contract manufacturer, Maycom, to timely complete a 1250 unit digEplayer(TM) order as previously reported. At March 31, 2006 the Company had approximately $1.2 million of orders, but delivery by Maycom is behind schedule and not assured. However, e.Digital recently received assurances from Maycom for a mid-to-late August targeted delivery of this delayed 1250 unit order. The Company reported 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. of $2.5 million for fiscal 2006, compared to an operating loss of $2 million for fiscal 2005. The increase in the operating loss was due primarily to an impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge of $604,000 for deposits related to the delayed 1250 unit order. Net loss available to common stockholders for fiscal 2006 was $(0.03) per basic diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to $(0.02) per basic diluted share for fiscal 2005. e.Digital also announced that it is expanding initial deliveries of its new, proprietary eVU(TM) mobile entertainment system to companies in the healthcare and travel and leisure industries (please go to the following link to view the product: www.edigital.com/evu.htm). Based on e.Digital's proprietary digital video technology, eVU features razor-sharp images on its 7" high resolution LCD screen, superb audio fidelity, dual stereo headphone See headphones. jacks, embedded Inserted into. See embedded system. credit card reader/processor, touch screen capabilities, bright full featured graphical user interface graphical user interface (GUI) Computer display format that allows the user to select commands, call up files, start programs, and do other routine tasks by using a mouse to point to pictorial symbols (icons) or lists of menu choices on the screen as opposed to having to , e.Digital's patent-pending hardware security technology, up to 10 hours of high resolution video playback on a single battery charge, and other advanced features. "Our eVU mobile entertainment system and turnkey entertainment services business is being well-received, especially by companies in the in flight entertainment (IFE Ife (ē`fā), city (1991 est. pop. 262,000), SW Nigeria. Located in a farm region, the city is an important center for marketing and shipping cacao. According to tradition, Ife is the oldest Yoruba town (founded c.1300). ) industry," said Will Blakeley, e.Digital's president and chief technical officer. "We are excited to be working with Mezzo mez·zo n. pl. mez·zos A mezzo-soprano. mezzo Adverb Music moderately; quite: mezzo-forte Noun pl -zos Movies and other companies who are offering eVUs to their customers/passengers/patients. With volume eVU production on track to begin next quarter with our U.S. manufacturer, we look forward to releasing order details as we receive the consent of our customers." In addition to direct product sales, e.Digital believes that as its turnkey entertainment services solution is adopted, the Company will capture more margin on each unit sale and collect monthly revenues from content and other services, and could become profitable with annual deliveries totaling approximately 4,000 eVU units. Addressing e.Digital's efforts to monetize its flash memory-related patent portfolio, Blakeley remarked, "With the assistance of IP veteran, Pat Nunally, and other outside groups and firms, we are identifying potential licensees in the cell phone, PDA/Pocket PC, portable A/V (1) (Audio/Video) Refers to equipment and applications that deal with sound and sight. The A/V world includes microphones, tape recorders, audio mixers, still and video cameras, film projectors, slide projectors, VCRs, CD and DVD players/recorders, amplifiers and recorder, digital camera, camcorder, and other portable device industries. Pat and other outside groups and firms are also assisting us expedite ex·pe·dite tr.v. ex·pe·dit·ed, ex·pe·dit·ing, ex·pe·dites 1. To speed up the progress of; accelerate. 2. the processing of our patent portfolio, derive a valuation of our intellectual property in products we believe are utilizing our patents, and prepare the foundational documentation, materials and agreements in order to pursue licensing agreements and the potential revenues they could generate." About e.Digital Corporation: e.Digital is a provider of secure portable Video on Demand products including its eVU(TM) mobile entertainment system. e.Digital also licenses its MicroOS(TM), Content Mark-Up Language (CML 1. CML - A query language. ["Towards a Knowledge Description Language", A. Borgida et al, in On Knowledge Base Management Systems, J. Mylopoulos et al eds, Springer 1986]. 2. CML - Concurrent ML. ) application, LDP LDP - Linux Documentation Project software, patent-pending Hardware Security technologies, Digital Rights Management (DRM (1) (Digital Radio Mondiale) A digital audio broadcasting (DAB) system for AM radio in Europe. See HD Radio. (2) (Digital Rights M ) solutions, Content Download applications, Encryption The reversible transformation of data from the original (the plaintext) to a difficult-to-interpret format (the ciphertext) as a mechanism for protecting its confidentiality, integrity and sometimes its authenticity. Encryption uses an encryption algorithm and one or more encryption keys. and Content Protection solutions, and Video Display software applications. Additionally, e.Digital partners with leading, innovative companies, designing and providing manufacturing services for products employing the Company's proprietary digital technology platforms. e.Digital is also pursuing the monetization of its flash memory-related patent portfolio. For more information about e.Digital and its technology platforms, please visit the company website at www.edigital.com. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. 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: All statements made in this document, other than statements of historical fact, are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of Section 21E of the Securities Exchange Act. You should not place undue reliance on these statements. We base these statements on particular assumptions that we have made in light of our industry experience, the stage of product and market development, expected future developments and other factors that we believe are appropriate under the circumstances. These forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about the businesses of the Company and the industries and markets in which the company operates. These statements are not guarantees of future performance and involve risks, uncertainties that could cause actual results to differ materially from those suggested in the forward-looking statements, including but not limited to the Company's ability to finance its operations, favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. resolve the complaint filed by digEcor, Inc. against the Company and certain of its officers and employees, sell its products, implement a turnkey financial, product, and maintenance solution, manufacture and ship orders in a timely manner, secure additional business, and other risks identified and discussed in our filings with the Securities and Exchange Commission ("SEC"). Actual outcomes and results may differ materially from what is expressed or implied by the forward-looking statements. More information about potential factors that could affect the Company can be found in its most recent Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , Form 10-Q Form 10-Q See 10-Q. and other reports and statements filed with the Securities and Exchange Commission ("SEC"). e.Digital Corporation disclaims any intent or obligation to update these or any forward-looking statements, except as otherwise specifically stated by it. Note: eVU and MicroOS are trademarks of e.Digital Corporation. All other company, product, and service names are the property of their respective owners.
e.Digital Corporation and subsidiary
Condensed Balance Sheet
(000's omitted except per share amounts)
March 31, March 31,
2006 2005
$ $
---------- ----------
ASSETS
Current
Cash and cash equivalents 1,059 1,290
Accounts receivable 2 52
Deposits and prepaid expenses 32 505
---------- ----------
Total current assets 1,093 1,847
---------- ----------
Property and equipment, net 63 126
---------- ----------
Total assets 1,156 1,973
========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current
Accounts payable 261 522
Accrued liabilities and other 627 616
Customer deposits 794 707
Lease liability 515 515
Unsecured notes, short-term 1,016 35
Convertible subordinated notes 397 942
---------- ----------
Total current liabilities 3,610 3,337
---------- ----------
Long-term liabilities - 897
Stockholders' deficit (2,454) (2,261)
---------- ----------
Total liabilities and stockholders' deficit 1,156 1,973
========== ==========
e.Digital Corporation and subsidiary
Condensed Statements of Operations
(000's omitted except per share amounts)
For the year ended March 31,
2006 2005
$ $
----------------------------
Total revenue 3,250 4,252
Cost of revenue 3,136 3,255
----------------------------
Gross profit 114 997
Operating expenses:
Selling and administrative 1,318 1,518
Research and related expenditures 1,338 1,515
----------------------------
Total operating expenses 2,656 3,033
----------------------------
Operating loss (2,542) (2,036)
Other expense 565 381
----------------------------
Loss and comprehensive loss (3,107) (2,417)
Imputed and accrued dividends on
preferred stock 2,161 1,326
----------------------------
Loss attributable to common stockholders (5,268) (3,743)
============================
Loss per common share - basic and diluted $(0.03) $(0.02)
Weighted average common shares
outstanding 177,472,037 165,525,386
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