SOURCE: e.Digital Corporation

e.Digital Corporation

June 23, 2016 17:39 ET

eDIGITAL Reports Fiscal Year 2016 Results

SAN DIEGO, CA--(Marketwired - June 23, 2016) - 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, 2016.

Highlights:

  • Nunchi® patent portfolio - During the third fiscal quarter, eDigital was granted U.S. Patent 9,178,983 for interpersonal awareness and the Internet of Things technologies. The Nunchi patent portfolio consists of eight granted patents that are poised to play a key role in the future of mobile communications and the Internet of Things. Additional Nunchi patent applications are in progress.
  • Nunchi litigation - The Company filed multiple patent infringement lawsuits during fiscal 2016 against companies in the connected home security market. The asserted patents relate to the way systems analyze and manage data. A royalty bearing license agreement was entered into with defendant, Myfox in the fourth fiscal quarter. In December 2015, the United States Patent Trial and Appeal Board (PTAB) granted a defendant's petition for Inter Partes Review (IPR) of the asserted patents. An IPR is a procedure for challenging the validity of a United States patent before the United States Patent and Trademark Office (USPTO).
  • microSignet™ patent portfolio - In the fourth fiscal quarter U.S. Patent 9,298,565 was granted for semiconductor based data security solutions. The microSignet portfolio consists of two granted patents and one continuation. microSignet offers a unique hardware security solution, that in addition to other levels of security, offers a solution to online data security breaches.
  • Synap technology - The Company has one pending patent application in an exciting new area of secure communications. Synap technology enables applications to achieve the highest levels of security; protecting user communications, user data, online transactions, and physical security. Using sensor technology, it allows separate devices to independently construct large volumes of the same secure data internally, without ever having to exchange secure data between the devices. One potential application of this unique technology allows users to fully secure communications. Central to this new technology are mechanisms to independently create common, secure data between devices.
  • eVU® business completed - eDigital ceased its eVU operations as of September 30, 2015.
  • Flash-R licensing completed - The Company successfully monetized its Flash-R patent portfolio through enforcement actions beginning in 2007, with 83 companies and related distributors agreeing to license terms as of September 30, 2015. All of the Flash-R patents have now expired.
  • New Website and Branding - eDigital launched a fresh, new website and a re-designed corporate logo in fiscal 2016. The new site is available at www.edigital.com

Management Commentary:
"Fiscal year 2016 was a transitional year for the Company as we phased out our legacy products and technologies, while opening the door to new technologies and business opportunities," commented Fred Falk, president and CEO of eDigital. "We believe the rapidly growing smart home industry, also known as the Internet of Things (IoT), presents eDigital with an opportunity to participate at a product design level. Our strategy is to position the Company, employing its supporting patents, to engage this exciting new market allowing eDigital to continue to do what it does best; innovate.

"With regard to our unique microSignet and Synap technologies, the online security industry is challenging due to its multifarious nature. We are also up against much larger companies with their own proprietary solutions and virtually unlimited financial and technical resources. However, we remain confident that we can gain a foothold in this space by partnering with smaller companies that have an established presence in the online security sector.

"As we move forward in this new fiscal year we are excited about the road that lies ahead, and participating in the growth of the emergent Internet of Things industry," concluded Falk.

Fiscal 2016 Financial Summary:
Revenues totaled $709,531 for the fiscal year ended March 31, 2016 compared to $2.2 million in the prior year. The decline is primarily the result of decreased patent license revenues. Revenues for fiscal year 2016 included $693,500 in licensing fees from the Company's patent portfolio. For the prior year, licensing revenue was $2.1 million. During fiscal 2016, the Company licensed 15 companies, and in the prior year had 29 new patent license agreements.

Operating costs and expenses for fiscal year 2016 were $1.98 million, decreased from $2.7 million in fiscal year 2015. The decrease is primarily as a result of reduced headcount and expenses related to the terminated eVU business and reduced contingent legal fees due to fewer license agreements.

The net loss for fiscal year 2016 was $1,275,164 or ($0.00) per diluted share, compared to the net loss of $235,153 or ($0.00) per diluted share for fiscal 2015.

About e.Digital Corporation: For more than 25 years, e.Digital's ideas and inventions have impacted the evolution of consumer products. Today, e.Digital innovations, including Nunchi® portfolio, empower many portable consumer electronic products. 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
Consolidated Balance Sheet
(000's omitted except per share amount)
       
   March 31,
   2016  2015
   $  $
ASSETS      
 Current      
  Cash and cash equivalents  701  1,953
  Accounts receivable  -  11
  Inventory  -  -
  Deposits and prepaid expenses  31  43
 Total current assets  732  2,007
  Property and equipment, net  27  7
 Total assets  759  2,014
       
LIABILITIES AND STOCKHOLDERS' EQUITY    
 Current      
  Accounts payable  121  140
  Accrued and other  109  157
 Total current liabilities  230  297
 Stockholders' equity  529  1,717
 Total liabilities and stockholders' equity  759  2,014
       

      
      
e.Digital Corporation and subsidiary
Consolidated Statement of Operations
(000's omitted except per share amount)
      
  For the year
  ended March 31,
  2016  2015
  $  $
Revenues 710  2,236
Cost of revenues:     
 Products and services 8  242
 Patent licensing and litigation costs 450  455
 Contingent legal fees and expenses 300  700
Selling and administrative 860  929
Research and related expenditures 367  367
Total operating expenses 1,985  2,693
Other income -  52
Net loss and comprehensive loss (1,275 )(405)
Income tax benefit -  170
Net loss and comprehensive loss (1,275 )(235)
Loss per common share - basic and diluted (0.00 )(0.00)
      
Weighted average common shares outstanding    
 Basic 293,593  293,339
 Diluted 293,593  293,339