SOURCE: e.Digital Corporation

February 13, 2013 16:30 ET

e.Digital Announces Third Quarter Results

SAN DIEGO, CA--(Marketwire - Feb 13, 2013) - e.Digital Corporation (OTCQB: EDIG), a long standing source of innovation and future-defining patented technologies, today reported financial results for its third quarter of fiscal 2013, ended December 31, 2012.

The Company reported a net loss of $334,494 or $(0.00) per share for the third quarter of fiscal 2013, compared to a net income of $671,417 or $0.00 per share for the prior year's third quarter. For the third quarter of fiscal 2013 revenues totaled $79,072 compared to $1,281,845 for the third quarter of the prior year. The most recent quarter included $0 of patent license revenues compared to $1,155,000 for the third quarter of the prior year. Gross profit for the third quarter was $6,351 or 8% of revenues, compared to $1,140,046 or 89% of revenues, for the prior year's third quarter. Operating expenses decreased to $400,045 from $437,629 for the prior year's comparable quarter primarily due to reduced patent related costs.

For the nine months ended December 31, 2012 the Company reported a net loss of $1,043,482 or $(0.00) per share on revenues of $336,567. For the comparable nine months of the prior year the Company reported net income of $1,566,084 or $0.01 per share on revenues of $4,506,151. The Company's results are impacted by the timing and amount of license fees and there were no significant licensing revenues so far in fiscal 2013.

"Q3 was essentially a transitional quarter for e.Digital," commented Fred Falk, President and CEO of e.Digital. "With the reexamination of two of our key patents behind us, we were able to reignite our patent monetization efforts. Through our newly retained 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." In October and November 2012, the Company commenced new enforcement action by filing six complaints in the U.S. District Court for the Southern District of California. In December 2012 and January 2013 the Company filed an additional ten complaints asserting that products made and sold by the defendant companies infringe the Company's U.S. patents, and dismissed one defendant without prejudice. "We will continue to work hard to protect and enforce the Company's intellectual property and we expect to see positive results through our efforts," continued Falk.

In addition to the Flash-R progress, Q3 was a milestone quarter for new technology development. The Company was granted six patents for context and interpersonal awareness systems technologies, thereby establishing rights and officially launching the Company's Nunchi® patent portfolio. Over the last several months, the Company filed three new Nunchi related patent applications. The Company is also currently developing technologies in the areas of cloud technology, information security and user authentication. "As we return to monetizing our Flash-R patent portfolio we are also now better poised to pursue Nunchi licensing opportunities and to bring on-line our next family of IP," 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, 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. 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)
 
    December 31,   March 31,
    2012   2012
    $   $
ASSETS        
  Current        
    Cash   2,051   3,125
    Accounts receivable   122   168
    Inventory   30   98
    Deposits and prepaid expenses   61   40
  Total current assets   2,264   3,431
    Property and equipment, net   14   18
    Inventory, long-term   106   89
  Total assets   2,384   3,538
         
LIABILITIES AND STOCKHOLDERS' EQUITY        
  Current        
    Accounts payable   73   100
    Accrued and other   110   211
  Total current liabilities   183   311
  Stockholders' equity   2,201   3,227
  Total liabilities and stockholders' equity   2,384   3,538
                         
                         
e.Digital Corporation and subsidiary              
Condensed Consolidated Statement of Operations              
(000's omitted except per share amount)              
(unaudited)              
               
    For the three months     For the nine months  
    ended December 31,     ended December 31,  
    2012     2011     2012     2011  
    $     $     $     $  
Revenues   79     1,282     337     4,506  
Cost of revenues   73     142     269     1,598  
  Gross profit   6     1,140     68     2,908  
Operating expenses:                        
  Selling and administrative   269     219     724     699  
  Research and related expenditures   131     219     446     512  
Total operating expenses   400     438     1,170     1,211  
Operating income (loss) before income taxes   (394 )   702     (1,102 )   1,697  
Provision for income taxes   59     (31 )   59     (132 )
Income (loss)   (335 )   671     (1,043 )   1,565  
Dividends on preferred stock   -     -     -     -  
Income (loss) attributed to common stockholders   (335 )   671     (1,043 )   1,565  
Income (loss) per common share - basic and diluted   (0.00 )   0.00     (0.00 )   0.00  
                         
Weighted average common shares outstanding                        
  Basic and diluted   293,008     293,003     293,005     293,003