e.Digital Reports Third Quarter Results
February 12 2014 - 10:00AM
Marketwired
e.Digital Reports Third Quarter Results
SAN DIEGO, CA--(Marketwired - Feb 12, 2014) - e.Digital
Corporation (OTCQB: EDIG), a long standing source of innovation and
future-defining patented technologies, today announced results for
its third quarter of fiscal 2014, ended December 31, 2013.
Recent Highlights:
- Continued Flash-R™ licensing success: During the third
fiscal quarter, the Company entered into eight
revenue-generating license and settlement agreements. There
are five remaining defendants from the original groups of
lawsuits filed by the Company's law firm, Handal &
Associates. The Company expects additional settlements
before the end of the fiscal year.
- Additional Lawsuits Filed: In early December 2013, the
Company filed numerous additional lawsuits against manufacturers
and suppliers of Flash memory storage devices. These
devices include various types of Flash cards, SSD drives and
USB thumb drives. The Company believes the defendants are
infringing claim one of the Company's U.S. Patent No. 5,839,108
("the '108 patent"). Claim one of the '108 patent was not
affected by last year's collateral estoppel ruling, which the
Company is currently challenging through an appeal it filed
with the Federal Circuit Court of Appeals. There are currently
40 active cases in this latest round of litigation.
Management Commentary: "Recent Flash-R licensing and settlement
agreements resulted in a profitable third quarter and increased our
cash position," commented Fred Falk, president and CEO of
e.Digital. "We have settled with all but five of the initial
defendants and are currently in settlement discussions with
defendants from new patent enforcement actions initiated in early
December 2013. In addition to managing our litigation activities,
our law firm, Handal & Associates, is pursuing the collateral
estoppel appeal we filed last October. We believe a successful
appeal would enhance our claim infringement position with respect
to litigation against remaining and future defendants.
"We continue to explore and market applications of our Nunchi®
and microSignet™ technologies with the assistance of Handal &
Associates. The Company's microSignet technology offers a unique
hardware security solution, which in addition to other levels of
security offers a solution to online data security breaches. A
prototype of this security technology is being developed to
demonstrate this exciting technology to potential licensees. On a
separate track, we are developing applications and technologies to
demonstrate the power and functionality of our Nunchi technology,"
concluded Falk.
Third Quarter Fiscal 2014 Financial Summary: The Company
reported a net income of $698,794 or $0.00 per share, for the third
quarter of fiscal 2014 compared to a net loss of $334,494 or
$(0.00) per share for the prior year's third quarter. For the third
quarter of fiscal 2014 revenues totaled $1,286,367 compared to
$79,072 for the third quarter of the prior year. The most recent
quarter included $1,227,500 of patent license revenues with no
comparable revenues for the third quarter of the prior year.
Operating expenses increased to $572,573 from $472,766 for the
prior year's comparable quarter primarily due to increased
patent-related legal costs associated with increased revenues.
For the nine months ended December 31, 2013 the Company reported
a net income of $217,244 or $0.00 per share on revenues of
$1,837,554. For the comparable nine months of the prior year the
Company reported a net loss of $1,043,482 or $(0.00) per share on
revenues of $336,567. The Company's results are impacted by the
timing and amount of license fees.
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) |
|
|
|
December 31, |
|
March 31, |
|
|
2013 |
|
2013 |
|
|
$ |
|
$ |
ASSETS |
|
|
|
|
|
Current |
|
|
|
|
|
|
Cash |
|
2,045 |
|
1,741 |
|
|
Accounts receivable |
|
62 |
|
176 |
|
|
Inventory |
|
15 |
|
21 |
|
|
Deposits and prepaid expenses |
|
36 |
|
60 |
|
Total current assets |
|
2,158 |
|
1,998 |
|
|
Property and equipment, net |
|
11 |
|
13 |
|
|
Inventory, long-term |
|
40 |
|
104 |
|
Total assets |
|
2,209 |
|
2,115 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
Current |
|
|
|
|
|
|
Accounts payable |
|
83 |
|
67 |
|
|
Accrued and other |
|
130 |
|
273 |
|
Total current liabilities |
|
213 |
|
340 |
|
Stockholders' equity |
|
1,996 |
|
1,775 |
|
Total liabilities and stockholders' equity |
|
2,209 |
|
2,115 |
|
|
|
|
|
|
|
|
|
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, |
|
|
|
2013 |
|
|
2012 |
|
|
2013 |
|
|
2012 |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
Revenues |
|
1,286 |
|
|
79 |
|
|
1,838 |
|
|
337 |
|
Cost of revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Products and services |
|
84 |
|
|
73 |
|
|
255 |
|
|
266 |
|
|
Patent licensing and litigation costs |
|
113 |
|
|
90 |
|
|
338 |
|
|
165 |
|
|
Contingent legal fees and expenses |
|
119 |
|
|
- |
|
|
149 |
|
|
3 |
|
Selling and administrative |
|
180 |
|
|
179 |
|
|
626 |
|
|
559 |
|
Research and related expenditures |
|
77 |
|
|
131 |
|
|
238 |
|
|
446 |
|
Total operating expenses |
|
573 |
|
|
473 |
|
|
1,606 |
|
|
1,439 |
|
Income (loss) |
|
713 |
|
|
(394 |
) |
|
232 |
|
|
(1,102 |
) |
(Provision for) benefit from income taxes |
|
(15 |
) |
|
59 |
|
|
(15 |
) |
|
59 |
|
Income (loss) attributed to common stockholders |
|
698 |
|
|
(335 |
) |
|
217 |
|
|
(1,043 |
) |
Income (loss) per common share - basic and diluted |
|
0.00 |
|
|
(0.00 |
) |
|
0.00 |
|
|
(0.00 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted |
|
293,187 |
|
|
293,008 |
|
|
293,187 |
|
|
293,005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|