SOURCE: e.Digital Corporation

August 14, 2013 17:52 ET

e.Digital Announces First Quarter Results

Receives Notice of Allowance for New Patent

SAN DIEGO, CA--(Marketwired - Aug 14, 2013) - e.Digital Corporation (OTCQB: EDIG), a long standing source of innovation and future-defining patented technologies, today reported financial results for its first quarter of fiscal 2014, ended June 30, 2013.

The Company reported a net loss of $71,437 or $(0.00) per share for the first quarter of fiscal 2014, compared to a net loss of $332,983 or $(0.00) per share for the prior year's first quarter. For the first quarter of fiscal 2014 revenues totaled $449,458 compared to $132,546 for the first quarter of the prior year. The most recent quarter included $392,000 of patent license revenues compared to no comparable patent license revenues for the first quarter of the prior year. Operating expenses increased to $520,895 from $465,529 for the prior year's comparable quarter primarily due to patent licensing and litigation costs associated with patent license revenues.

"Positive results from our Flash-R patent monetization efforts allowed us to significantly reduce losses for the quarter compared to the prior year's first quarter," commented Fred Falk, President and CEO of e.Digital. "With the assistance of our patent licensing law firm, Handal & Associates, we have been aggressively pursuing parties believed to infringe the Company's Flash-R patents covering the use of flash memory technologies. We entered into licensing and settlement agreements with multiple defendants and we expect more significant licensing revenues as we progress through the litigation and licensing process.

"Our intellectual property continues to expand as we recently received a notice of allowance from the United States Patent and Trademark Office for our patent application titled System and Method for Managing Information Stored in Semiconductors. The allowance of this patent along with a recently filed continuation, serves as the foundation of our new MicroSignet patent portfolio. The technology allows naturally occurring defects introduced in the semiconductor fabrication process to be used as a 'fingerprint' unique to each integrated circuit. As some of these faults are transient, these 'fingerprints' cannot be copied. So, every device in a system becomes part of rights management and data security. We believe this portfolio will be attractive to manufacturers of semiconductors. This is the third significant technology portfolio now including Flash-R, Nunchi® and MicroSignet IP and related patents.

"The marketing of our Nunchi patent portfolio continues through IPmetrics Intellectual Property Consulting, which is managing the valuation and monetization of this portfolio. We believe they are making good progress in getting the portfolio into the hands of the prospective licensees, many of whom are currently conducting due diligence," concluded Falk.

About e.Digital Corporation: For more than 20 years, e.Digital's ideas and inventions have impacted the evolution of consumer products. Today, e.Digital innovations, including its Flash-R™ portfolio of flash memory-related patents, are essential to many portable consumer electronic products. The Company pioneered dedicated portable in-flight entertainment systems and more than 30 airlines have made e.Digital powered products their in-flight entertainment choice. For more information about e.Digital, please visit: www.edigital.com.

Safe Harbor statement under the Private Securities Litigation Reform of 1995: All statements made in this document, other than statements of historical fact, are forward-looking statements 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, our ability to protect and monetize our IP portfolio, 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. 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-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.

 
 
e.Digital Corporation and subsidiary
Condensed Consolidated Balance Sheet
(000's omitted except per share amount)
(unaudited)
 
    June 30,   March 31,
    2013   2013
    $   $
ASSETS        
  Current        
    Cash   1,803   1,741
    Accounts receivable   54   176
    Inventory   14   21
    Deposits and prepaid expenses   59   60
  Total current assets   1,930   1,998
    Inventory, long term   63   104
    Property and equipment, net   12   13
  Total assets   2,005   2,115
         
LIABILITIES AND STOCKHOLDERS' EQUITY        
  Current        
    Accounts payable   130   67
    Accrued and other   168   273
  Total current liabilities   298   340
  Stockholders' equity   1,707   1,775
  Total liabilities and stockholders' equity   2,005   2,115
         
         
   
e.Digital Corporation and subsidiary  
Condensed Consolidated Statement of Operations  
(000's omitted except per share amount)  
(unaudited)  
   
    For the three months  
    ended June 30,  
    2013     2012  
    $     $  
Revenues   449     133  
Cost of revenues            
  Products and services   108     94  
  Patent licensing and litigation costs   113     23  
  Contingent legal fees and expenses   15     3  
Selling and administrative   202     200  
Research and related expenditures   83     146  
Total operating expenses   521     466  
Income (loss)   (72 )   (333 )
(Provision for) benefit from income taxes   -     -  
Income (loss) attributed to common stockholders   (72 )   (333 )
Income (loss) per common share - basic and diluted   (0.00 )   (0.00 )
             
Weighted average common shares outstanding            
  Basic and diluted   293,187     293,003