SOURCE: e.Digital Corporation

June 27, 2013 16:30 ET

e.Digital Reports Fiscal Year 2013 Results

SAN DIEGO, CA--(Marketwired - Jun 27, 2013) - e.Digital Corporation (OTCQB: EDIG), a long standing source of innovation and future-defining patented technologies, today announced results for its fiscal year ended March 31, 2013.

Highlights:

  • Continued progress with patent licensing: Since the start of fiscal 2013 the Company has filed a total of twenty-two complaints, settled with seven defendants, won a stipulated judgment against one defendant, and dismissed one.
  • Added new patents to portfolio of IP: The USPTO has granted the Company six new patents in the area of context and interpersonal awareness systems technologies creating the foundation of its Nunchi® patent portfolio. The Company filed two patent continuations and one continuation in part, which it expects will further strengthen the portfolio.
  • Began marketing new IP: In March, the Company retained IPmetrics Intellectual Property Consulting to manage the valuation and monetization of the Nunchi patent portfolio. IPmetrics is currently marketing the portfolio of patents into various technology sectors.

Management Commentary:
"Fiscal year 2013 brought not only challenge, but also progress," commented Fred Falk, president and CEO of e.Digital. "Although the Company reported a financial loss for the year, we were successful in getting the much-needed tools in place to allow us to renew our intellectual property monetization efforts. We successfully completed the reexamination by the United States Patent and Trademark Office (USPTO), of one of our key patents, US 5,742,737. With the reexamination completed, we restarted the process of monetizing our Flash-R™ patent portfolio, through a newly retained law firm, Handal & Associates. We have begun to realize Flash-R related licensing revenue and expect more licensing revenues in the future as we progress through the litigation process. Our future success will be determined to some degree by factors out of our control, such as Markman and other court rulings.

"We enjoyed progress in the development of new intellectual property during the year, our Nunchi portfolio," continued Falk. "As with all emerging technologies, it takes time for industries to embrace a new technology's role in their market. Just as in the early days of our Flash-R technology, we believe value increases as we develop the portfolio over time.

"Although new sales of our eVU® portable in-flight entertainment device have been stifled by the growing trend of passengers using their own entertainment devices, we did receive small follow on orders from an existing airline customer. Many of the players that we've sold over the years are still in use and we continue to provide revenue-generating services, such as repairs and content updates, for those devices.

"Looking to the future, we have begun developing new intellectual property, focusing on technologies in the areas of cloud based privacy, security, user authentication and communications," concluded Falk.

Fiscal 2013 Financial Summary:
Revenues totaled $442,000 for the fiscal year ended March 31, 2013. Revenues for fiscal year 2013 included $11,000 in licensing fees from the Company's Flash-R™ patent portfolio and $431,000 in eVU portable in flight entertainment (IFE) sales and services. For the prior year, licensing revenue was $4.1 million and eVU revenues were $627,000. During fiscal 2013 the Company had no new patent license agreements, and in the prior year, licensed eight companies including one outside of litigation. The Company recently announced new patent licenses secured in the first quarter of fiscal 2014 from its expanded enforcement efforts.

Operating costs and expenses for fiscal year 2013 were $1.98 million, decreased from $3.4 million in fiscal year 2012. The decrease is primarily as a result of decreased contingent legal fees due to a lack of patent license settlements in fiscal 2013.

Net loss for fiscal year 2013 was $1.48 million or $(0.01) per diluted share, compared to the net income of $1.2 million or $0.00 per diluted share for fiscal 2012.

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
Consolidated Balance Sheet
(000's omitted except per share amount)
(unaudited)
  March 31,
  2013   2012
  $   $
ASSETS      
  Current      
    Cash and cash equivalents 1,741   3,125
    Accounts receivable 176   168
    Inventory 21   98
    Deposits and prepaid expenses 60   40
  Total current assets 1,998   3,431
    Inventory, long-term 104   89
    Property and equipment, net 13   18
  Total assets 2,115   3,538
       
LIABILITIES AND STOCKHOLDERS' EQUITY      
  Current      
    Accounts payable 67   100
    Accrued and other 273   211
  Total current liabilities 340   311
  Stockholders' equity 1,775   3,227
  Total liabilities and stockholders' equity 2,115   3,538
       
       
       
           
           
e.Digital Corporation and subsidiary  
Consolidated Statement of Operations  
(000's omitted except per share amount)  
(unaudited)  
  For the year  
  ended March 31,  
  2013     2012  
  $     $  
Revenues 442     4,727  
Operating costs and expenses:          
  Products and services 336     455  
  Patent licensing and litigation costs 285     90  
  Contingent legal fees and expenses 41     1,322  
Selling and administrative 777     875  
Research and related expenditures 545     673  
Total operating costs and expenses 1,984     3,415  
Net income (loss) and comprehensive income (loss) (1,542 )   1,312  
(Provision for) benefit from income taxes 59     (117 )
Net income (loss) and comprehensive income (loss) (1,483 )   1,195  
Income (loss) per common share - basic and diluted (0.01 )   0.00  
           
Weighted average common shares outstanding          
  Basic 293,187     293,003  
  Diluted 293,187     293,335