SOURCE: e.Digital Corporation

August 13, 2014 16:30 ET

e.Digital Reports Fiscal First Quarter 2015 Financial Results

Licensing Success Drives Profitable Quarter

SAN DIEGO, CA--(Marketwired - Aug 13, 2014) - e.Digital Corporation (OTCQB: EDIG), a long standing source of innovation and future-defining patented technologies, today announced results for its first quarter of fiscal year 2015, ended June 30, 2014.

The Company reported a net income of $30,439 or $0.00 per share for the first quarter of fiscal 2015, compared to a net loss of $71,437 or $(0.00) per share for the prior year's first quarter. For the first quarter of fiscal 2015 revenues totaled $682,748 compared to $449,458 for the first quarter of the prior year. The most recent quarter included $632,500 of patent license revenues compared to $392,000 for the first quarter of the prior year. Operating expenses increased to $652,309 from $520,895 for the prior year's comparable quarter primarily due to increased licensing and patent related costs.

Recent Highlights:

  • Continued Flash-R licensing success - New licensing agreements produced increased revenues and a profitable first fiscal quarter. Eight new agreements resulted from lawsuits filed in December 2013 against manufacturers and suppliers of Flash memory storage devices. Patent enforcement progress continues in other pending cases including those against SanDisk, GoPro, Toshiba, Seagate and Intel.

  • Nunchi® lawsuit filed - The Company's newest technologies embodied in its Nunchi® patents is demonstrating monetization promise. The Company recently identified several potential infringers of its Nunchi properties in the "connected" home security space. In July, the Company filed its first patent infringement lawsuit involving its Nunchi® portfolio against Dropcam, which uses various devices to communicate and monitor remote locations. 

  • Expanded and strengthened the Company's Nunchi patent portfolio - On July 10, 2014, the Company filed a continuation patent application to broaden the coverage of its Nunchi patent portfolio. The portfolio now consists of six granted U.S. patents along with four continuation applications now pending.

  • microSignet technology - The Company believes the rapidly developing and changing data security market offers improved licensing opportunities as it seeks partnerships with semiconductor companies and established online security providers.

Management Commentary:

"It has been a busy and productive first quarter for e.Digital," commented Fred Falk, president and CEO of e.Digital. "In addition to entering into new Flash-R licensing arrangements, we filed our first Nunchi enforcement lawsuit and we are looking at other potential infringers. We have expended substantial time and effort to monetize our Nunchi portfolio through a formal licensing program; however, with infringing products entering the market we will also take enforcement actions to protect our intellectual property."

"In addition to our litigation activities, we are working with Handal & Associates to identify potential partners and licensees for our microSignet technology. Unlike other security solutions, microSignet utilizes the internal physical characteristics of semiconductor memories, to identify a 'fingerprint' that uniquely identifies a given piece of hardware like a smart phone or desktop computer. microSignet, uses this information to authenticate, or bind valuable content to a particular device. We believe that the Company's microSignet security technology may be the key to providing a compelling solution to the threat of on-going internet security breaches," 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: This press release includes forward-looking information and statements. Except for historical information contained in this release, statements in this release may constitute forward-looking statements regarding assumptions, projections, expectations, targets, intentions or beliefs about future events that are based on management's belief, as well as assumptions made by, and information currently available to, management. While the Company believes that expectations are based upon reasonable assumptions, there can be no assurances that goals and strategy will be realized. Numerous factors, including risks and uncertainties, may affect actual results and may cause results to differ materially from those expressed in forward-looking statements made by the Company or on its behalf. Some of these factors include the substantial uncertainties inherent in pursuing patent enforcement activities including, but not limited to the risks and costs of litigation and support activities, the timing and amount of settlements/licenses if any, the acceptance of existing and future products and technologies, the difficulty of commercializing and protecting new technology such as the Company's Nunchi, microSignet and other technologies, the impact of competitive products, technologies and pricing, general business and economic conditions, and other factors detailed in the Company's Annual Report on Form 10-K and other periodic reports filed with the SEC. Except as required by law, the Company specifically disclaims any obligation to update or revise any forward-looking statement whether as a result of new information, future developments or otherwise.

 
e.Digital Corporation and subsidiary 
Condensed Consolidated Balance Sheet 
(000's omitted except per share amount) 
(unaudited) 
 
    June 30,   March 31,
    2014   2014
    $   $
ASSETS        
  Current        
    Cash   1,951   1,788
    Accounts receivable   237   239
    Inventory   14   14
    Deposits and prepaid expenses   70   65
  Total current assets   2,272   2,106
    Inventory, long term   39   40
    Property and equipment, net   13   14
  Total assets   2,324   2,160
         
LIABILITIES AND STOCKHOLDERS' EQUITY        
  Current        
    Accounts payable   251   66
    Accrued and other   166   231
  Total current liabilities   417   297
  Stockholders' equity   1,907   1,863
  Total liabilities and stockholders' equity   2,324   2,160
           
           
   
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,  
    2014   2013  
    $   $  
Revenues   683   449  
Cost of revenues          
  Products and services   54   108  
  Patent licensing and litigation costs   112   113  
  Contingent legal fees and expenses   207   15  
Selling and administrative   187   202  
Research and related expenditures   93   83  
Total operating expenses   653   521  
Income (loss)   30   (72 )
(Provision for) benefit from income taxes   -   -  
Income (loss) attributed to common stockholders   30   (72 )
Income (loss) per common share - basic and diluted   0.00   (0.00 )
           
Weighted average common shares outstanding          
  Basic and diluted   293,328   293,187