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It's about time you support us.............seems like we have to give the State away everytime you drive up here.
FIB'S you gotta love them.................
It was a Celica..............and $300 shares (american).
After suffering for nearly 30 years with constipation and bloating due to diverticulitis, I so happy to be able to wear the tight little black number again to parties and special occasions which was very unattractive with the bloated tummy constantly with me along with the feelings of irritability and chronic fatigue. The first 2 days of using Oxy-Powder™ had quite a Wow! factor and a restroom must be close at hand or you are in big trouble, but once aware of the situation when using the product the feeling of purity and well-being far exceed the initial getting used to the effects of using Oxy-Powder™ in the early days. I cannot recommend the product highly enough to those like me, who have felt the misery of constant bloating and feeling conscious of personal appearance with an ugly bloated tummy, after 3 days of use this appearance had completely vanished and I can wear my favourite clothes and feel great. The feelings of fatigue and awful constipation have vanished, my skin is now radiant I feel like a new person, I cannot imagine being without this wonderful product thank you so much Oxy-Powder™ I shall definately be a permanent user.
Misha "emma"
I have been constipated my entire life, literally full of you know what. Would go maybe every week or so and walked around feeling like a sausage. I have been taking laxatives my whole life to boot and not only did my body become addicted to the laxatives but they made me sick to my stomach. I was not really overweight, but yet I had difficulty losing any weight at all over the last 2 years. I started to become fatiged all the time, and felt like I was walking around in a fog half the time. I found this website and after reading the testimonials I tried the product and it is everything it claims to be! There is NO cramping at all like taking all other laxative products or tea's, and it works just great! I dont think I am cleansed to the point of getting to the mucus stored in my body, but it does not matter! I feel 100% better and go everyday now! I take 5 capsules 2 times per week for maintenance and it works perfect. Now when I go on vacations, I dont have to worry about being miserable, I just take some with me. No more walking around feeling like I'm 6 months pregnant and cant breathe! This Product Rocks!
-- Dean "Daboss"
I believe 0.01, just a tad lower than e.digitals low of 0.015
Rollingrock.......... that's why caller ID is such a wonderful thing........
Sorry, I have a number of "distant" friends who also invested years back.
I'm trying to get on their good side. I stopped giving stock tips, now I just agree to have Emma clean their homes.
Oh, I forgot, free dental from Dafloss, too!
Actually, it was a pretty legit question.
So, when the last 700 shares are sold, are retiring as moderator?
Hey..........I haven't been in it since.....well, last week!!
Good to see you, come to Atomic Bobs if you get a chance.
Now that is a funny question. Depends on what you want to hear. If you want blue sky while looking through rose colored glasses, go to Agora.com and follow Daboss and Emma. If you want to hear all of the bad things, go to RB. If you want some balance and humor go to Atomic Bobs and if you stay here, just listen to everyone and make your own decision.
But anyway, best of luck to you and be careful.
Well don't tell emma that, it would be like throwing a toaster in the bathtub.........you know, electricity in the water
I believe it is.........
Joe, you know why that is, don't you? It's because there is electricity in Emma's girdle.
Maybe she bought one of those ipod attachments.......that berge is hawking.
K
Well maybe they did and Fred or Renee wouldn't let it go.,.............. or couldn't.........
That is hilarious..........
Pretty profound Arkie..........now really tell it like it is......... :-}
I guess anything is possible:
Patriot Scientific Corporation Announces Unprecedented Microcap Dividend
Tuesday February 14, 9:42 am ET
SAN DIEGO, Calif.--(BUSINESS WIRE)--Feb. 14, 2006--In a move virtually unprecedented among Microcap stocks, Patriot Scientific Corporation (OTCBB: PTSC.OB - News) - a high-tech intellectual properties Company that specializes in developing and licensing high-performance ultra-low power microprocessor technology - today announced that it will issue a cash dividend of $0.02 per share of common stock for shareholders and qualified warrant holders of record as of February 24, 2006. The dividend is payable March 22, 2006.
ADVERTISEMENT
This dramatic announcement follows closely on the heels of the Company's announcement last week of a buy-back program for up to 20 million stock warrants and the conversion and retirement of all outstanding debentures. Final information as to the number of shareholders and outstanding shares will be provided by the Company's transfer agent as of the record date, but based upon current information and estimates the Company will set aside funds of approximately $7million or more for payment of the dividend from its currently available cash and cash equivalents that amount to approximately $17 million.
This announcement is especially significant because - until less than 12 months ago - Patriot had never shown a quarterly profit, and had never realized significant revenue from its 10-patent portfolio of seminal microprocessor innovations. Since February of last year, the Company's jointly owned patent portfolio has been successfully licensed to Intel, HP and AMD - in the process, generating nearly $24 million in revenue for Patriot. Based on these licenses and other key factors covered in recent SEC filings, Patriot Scientific currently has a market cap of approximately $64 million dollars.
With these successful license negotiations as precedent, the Company - through its marketing alliance with The TPL Group's Alliacense division, - is actively and confidently negotiating for licenses with other U.S. and foreign companies whose products include high speed microprocessors - more than 150 of which were put on notice of likely infringement - and that includes practically every high-tech consumer electronics manufacturer and systems integrator in the global marketplace.
"We are pleased to be in the strong financial position that enables us to offer our loyal shareholders this significant dividend," said David H. Pohl, Chairman and CEO of Patriot Scientific. "The Company strongly believes that more licensing deals and related revenues are likely, although none are assured," Pohl continued. "Patriot Scientific's Board of Directors will consider and decide whether to take such dividend payment actions in the future, based on future revenues and the financial condition of the Company, as well as market conditions and other factors."
Pohl also said that, "This dividend payment, which is rare in the arena of microcap companies, is another important step toward evidencing Patriot Scientific's current financial strength and the fact that the Board and management firmly believe in the Company's future potential. During the past 12 months, the Company has undergone significant changes in management and operating strategy. As a result of those changes and the licensing revenues related to our jointly owned patent portfolio we are now in a favorable cash position, and we are using some of that cash to pay out our first-ever dividend to shareholders."
The action by Patriot Scientific to issue this dividend - and also last week's decision to retire the debentures and buy back what could amount to up to approximately 20 percent of the Company's total outstanding stock warrants at this juncture - were driven by the same impetus that has guided other strategic re-organizational moves that began in 2005. Last year the Company changed both its executive team and the Company's strategic direction, including the signing of a significant agreement with The TPL Group regarding joint ownership and marketing of its patent portfolio.
Patriot Scientific received licensing revenues of $13 million in 2005. The Company received distribution of an additional $10 million in January of 2006 as a result of a license transaction with systems manufacturer HP regarding Patriot's jointly owned patent portfolio.
"The far-reaching changes in 2005 helped pave the way for new growth-oriented initiatives in 2006," Pohl said. "These changes are positive for Patriot. We continue to move forward with the paramount goal of enhancing shareholder value by prudently addressing Company fundamentals and growing the business."
About Patriot Scientific
Patriot Scientific (OTCBB: PTSC.OB - News) has emerged as an effective and dynamic intellectual property licensing Company, developing and marketing innovative and proprietary semiconductor technologies. The Company's portfolio of proprietary designs encompasses what is believed to be fundamental ultra-low-power array microprocessor technology, as well as pending patents designed to protect Patriot's proprietary technology.
Detailed information about Patriot Scientific can be found on the website www.ptsc.com. Copies of Patriot Scientific press releases, current price quotes, stock charts and other valuable information for investors may be found at www.hawkassociates.com and www.americanmicrocaps.com. An investment profile on Patriot Scientific may be found at http://www.hawkassociates.com/patriot/profile.htm
About the Patent Portfolio
The patent portfolio, also marketed as the MMP portfolio, contains intellectual property that became jointly owned by publicly held Patriot Scientific Corporation and the privately held TPL Group in a settlement between them in June 2005. Both TPL and Patriot assert that their jointly owned patents have long been essential to the design of advanced microprocessors, digital signal processors, embedded processors and system-on-chip devices. Global sales of end products deploying chips using technologies protected by the jointly owned patents are estimated to be greater than $200 billion annually. The MMP Portfolio is exclusively managed by Alliacense, a TPL Group enterprise. While major microprocessor manufacturers such as Intel (NASDAQ: INTC - News) and Advanced Micro Devices (NYSE: AMD - News) were early portfolio licensees, Alliacense is now focusing its licensing efforts on system manufacturers.
Safe Harbor statement under the Private Securities Litigation Reform Act of 1995: Statements in this news release looking forward in time involve risks and uncertainties, including the risks associated with the effect of changing economic conditions, trends in the products markets, variations in the Company's cash flow, market acceptance risks, technical development risks, seasonality and other risk factors detailed in the Company's Securities and Exchange Commission filings.
Contact:
Attention Group
Media Relations:
Daryl Toor, 770-777-9489
dtoor@attentiongroup.com
or
Hawk Associates
Investor Relations:
Frank Hawkins, 305-451-1888
info@hawkassociates.com
or
Julie Marshall, 305-451-1888
info@hawkassociates.com
--------------------------------------------------------------------------------
Maybe this is him
I think this is some of his handy work
Is it safe yet?
Boy, now wouldn't that be cool if the boys in Poway took a cut. Especially the administrative intern named Fred.
I like Kirk's inititive, too bad the BOD's in Poway has a testostrone problem. (ie: no balls, or they can't reach them as they are puppets on a string)
do you expect him to? I don't know what his ramblings on were with the O1000?
Hey, I am going south, right now I just got into Alabama, staying in Athens, cause 735 miles is enough for one day.
Saw a horrific accident on the interstate. A tanker hit the left side of a bride abutment over the Tenn. River and ended up totally engulfed in flames. After a one hour delay because of smoke, I was able to drive past and see the remains of the truck. Don't know what happened to the driver and I don't know if any other vehicles were involved.
But getting back to the pig thing.........its not me, honest
Who are you talking to and who is meet?
I've got my certificates.........and I didn't have a problem getting them.....
Chisel, I've got an O1000, which weighs a ton compared to the Ipod. I first thought that the O1000 was a good player, and it actually is, but it does not compare to the first generation of the pods. I bought my daughter the video 30 gig pod, and actually with the little tiny screen, it still is pretty damn nice to watch and listen to.
The jury is still out on what will happen with the Evu and the new president. I still hold all my shares, not as many as Erma and Daboss, but enough to make me shake my head..........best of luck to all of us in 2006
You be careful out there. Lots of strange things going on in Kalifornia.......He'll probably catch you and make you drink more KOOLAID.
Hell, who knows, you might even convert to the Mormon religion..........
Anyway.
Merry Christmas to all.
Hey perk, what's up?
Ok, but what happens when you get dropped on your head?
That's ok, don't answer that, it's retorical.
Did you get picked on alot when you were a little kid? Wait let me rephrase that. Did you get picked on alot "recently"?
Pretty amazing..........just what do you expect to get out of doing that? What purpose could it or would it actually do?
Your response should be quite interesting...........
How much do you pay for that stuff you're smoking?
It was if it was danced wrong.........
Perky don't worry..........it's Christmas and HOPEFULLY our top notch sales force will sell something.
Hey Mac, be nice.....everybody has at least one friend. Real or not!
Gosh, I just checked how long I've been here, since 2001!!
Man, where does time go? Just a couple of months ago, I would have been out of here, should Lawyer Longs prognostication come through............
Hey Freddie, that is a pretty good one.....I'm sure there are many more out there as well.
Hmmmmmmmmmmmmmmmm up, what up with dat?
While you're waiting for your parole hearing, may I suggest something to do to while away those hours. If you do this well, I'll send you the plans to dig out of jail.
POPSICLE STICK TRUSS BRIDGE
Instructions By John Christiansen,
8th grader, Powell MS, Littleton, CO
Graphics By Ken Loontjer, Neujahr and Gorman, Inc., Denver, CO
PURPOSE: To build a bridge spanning twelve inches that will hold 50 lbs. The bridge is to be made of only popsicle sticks and glue.
Materials
114 straight popsicle sticks
2 or 3 heavy books
Ruler
Glue - school or wood glue is best
Rubber bands or small clamps (orthodontic bands are great!)
Saw/sandpaper - a dremel tool works also
Procedure:
1) Select 9 of the sticks, break one in half and lay 3 against a ruler. Glue them together, forming a beam 3 popsicle sticks thick and 3 long. Clamp or rubber band it together and allow to dry.
Repeat step 1 three more times - you should have 4 beams
2) Select 6 of the sticks, break one in half and lay two against a ruler. Glue them together, forming a beam 3 sticks thick and 2 long. Clamp or rubber band it and allow to dry.
Repeat step 2 - you should have 2 beams.
3) Select 12 sticks and two beams - a long and a short one. Lay them on a table with the flat part of the beams down. Glue 6 sticks on top in a triangular pattern. Then glue 6 on the underside in the same fashion. Press with books.
Repeat step 3 - you should have 2 walls.
4) Sand or cut the extra off of the walls
5) Lay the 2 remaining beams on a table. Glue 33 popsicle sticks onto them, forming the road.
Press with books.
6) Glue the 2 walls at a right angle onto the road.
Hold the walls in place until the glue sets.
7) Glue crossbeams on top of the walls. You will use a total of 9 sticks. Allow to dry.
8) Smear extra glue on the joint between the wall and the road. This will reinforce the joint.
Allow to dry, and YOU’RE DONE!
e.Digital Corporation Announces Results for the Second Quarter and Six Months Ended September 30, 2005
Tuesday November 15, 8:30 am ET
SAN DIEGO--(BUSINESS WIRE)--Nov. 15, 2005--e.Digital Corporation (OTC:EDIG - News), a leading innovator of proprietary digital video technology platforms, today reported revenues for the second quarter of its fiscal year 2006 ended September 30, 2005 totaled $1.99 million compared to revenues of $2.03 million for second quarter of fiscal 2005, a decrease of less than one percent. Revenues for the first six months of fiscal 2006 ended September 30, 2005 totaled $2.99 million compared to revenues of $2.12 million for the first six months of fiscal 2005, an increase of 40 percent.
ADVERTISEMENT
Gross profit for the second quarter of fiscal 2006 was $540,000 compared to $367,000 for the same period of fiscal 2005. Gross profit for the first six months of fiscal 2006 was $711,000 compared to $436,000 for the same period of fiscal 2005.
The company reported a reduced operating loss of $145,000 for its second fiscal quarter 2006, compared to an operating loss of $394,000 for the same period last year. The company reported an operating loss of $675,000 for the first six months of fiscal 2006 compared to an operating loss of $1.10 million for the same period last year. The decrease in operating loss resulted from the increase in gross profit for the six-month period and a decrease in operating expenses.
Net loss available to common stockholders for the second fiscal quarter of 2006 was $(0.00) per basic diluted share, compared to $(0.00) per basic diluted share for the same period last year. Net loss available to common stockholders for the first six months of fiscal 2006 was $(0.01) per basic diluted share, compared to $(0.01) per basic diluted share for the same period last year.
The company also announced it has received a formal digEplayer(TM) purchase order from digEcor worth approximately $1.2 million, $750,000 of which it expects to ship this quarter.
"We are making steady progress growing annual revenues and reducing losses," said Will Blakeley, e.Digital's new president and chief technical officer. "I am very excited to be leading a company that has a dynamic blend of senior engineering talent and experience, proprietary video/audio and content protection technologies, and a growing market and customer base for versions of secure, closed system video products based on our new digital video/audio technology platform (DVAP). We are working to enhance e.Digital's proprietary technologies, maximize our DVAP-based business opportunities, and grow annual revenues through current and new business expansion.
"I came to e.Digital because I believe we are well-positioned to exploit a developing market that has tremendous potential," concluded Blakeley. "We expect fiscal 2006 revenues will exceed fiscal 2005 revenues and look forward to launching our proprietary MedeViewer(TM) with customers and partners in the healthcare and travel and leisure industries."
About e.Digital Corporation: e.Digital Corporation partners with leading, innovative companies, designing and providing manufacturing services for their branded digital video/audio and wireless products based on the Company's proprietary MicroOS(TM)-enabled technology platforms. e.Digital specializes in the delivery, management, and protection of secure digital content through its technology platforms. e.Digital's services include the licensing of the Company's MicroOS, custom software and hardware development, industrial design, and manufacturing services through the Company's manufacturing partners. For more information about e.Digital and its technology platforms, please visit the company website at 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. These statements are not guarantees of future performance and involve risks, uncertainties that could cause actual results to differ materially from those suggested in the forward-looking statements, including but not limited to the Company's ability to finance its operations, ability of the Company's manufacturing partner to manufacture and ship orders in a timely manner, acceptance of customer-branded products, securing additional business, and other risks identified and discussed in our filings with the Securities and Exchange Commission ("SEC"). 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 by e.Digital Corporation 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.
Note: MicroOS and MedeViewer are trademarks of e.Digital Corporation. digEplayer is a trademark of digEcor (formerly APS/Wencor). All other company, product, and service names are the property of their respective owners.
e.Digital Corporation and subsidiary
Condensed Balance Sheet
(000's omitted except per share amounts)
(audited)
September 30, 2005 March 31, 2005
$ $
------------------ -----------------
ASSETS
Current
Cash 380 1,290
Accounts receivable 22 52
Prepaid expense and other 78 505
------------------ -----------------
Total current assets 480 1,847
------------------ -----------------
PP&E and other assets 94 126
------------------ -----------------
Total assets 574 1,973
================== =================
LIABILITIES AND STOCKHOLDERS'
DEFICIT
Current
Accounts payable 607 522
Accrued liabilities 587 616
Customer deposits 41 707
Leased liabilities 515 515
Promissory notes short-term 1,913 977
------------------ -----------------
Total current liabilities 3,663 3,337
------------------ -----------------
Long-term liabilities - 897
Stockholders' deficit (3,089) (2,261)
------------------ -----------------
Total liabilities and
stockholders' deficit 574 1,973
================== =================
e.Digital Corporation and subsidiary
Condensed Statement of Operations
(000's omitted except per share amounts)
(audited)
For the For the
three months ended six months ended
September 30, September 30,
2005 2004 2005 2004
$ $ $ $
------------ ------------ ------------ ------------
Total revenue 1,990 2,028 2,988 2,122
Cost of revenue 1,450 1,661 2,277 1,686
------------ ------------ ------------ ------------
Gross profit 540 367 711 436
Operating
expenses:
Selling, general
and
administrative 397 399 735 745
Research and
development 288 362 650 789
------------ ------------ ------------ ------------
Total operating
expenses 685 761 1,386 1,534
------------ ------------ ------------ ------------
Loss from
operations (145) (394) (675) (1,098)
Other income
(expense):
Interest expense (112) (117) (233) (147)
Other 2 - 6 (2)
------------ ------------ ------------ ------------
Total other income
(expense) (110) (117) (227) (149)
------------ ------------ ------------ ------------
Net loss (255) (510) (902) (1,247)
Dividends on
convertible
preferred stock (43) (37) (86) (85)
------------ ------------ ------------ ------------
Net loss available
to common
stockholders (297) (547) (986) (1,332)
============ ============ ============ ============
Net loss per share
of common stock
- basic and
diluted (0.00) (0.00) (0.01) (0.01)
Average weighted
number of common
stock
outstanding. 175,260,876 164,386,736 175,208,630 163,250,768
Contact:
e.Digital Corporation
Robert Putnam, 858-679-1504
rputnam@edigital.com
--------------------------------------------------------------------------------
Source: e.Digital Corporation
Corporate Officers
will blakeley - President & Cto
Will Blakeley joined e.Digital as President and Chief Technical Officer on November 14th, 2005. Over his 27-year career, Mr. Blakeley has served in managerial and engineering positions for TRW, Scientific Atlanta, Aegis Broadband and most recently with Northrop Grumman. He is well versed in multiple disciplines with significant experience in managing large engineering teams, contracts, manufacturing, marketing and finance. Mr. Blakeley has a strong background in systems engineering skills including specifications, architectures and algorithms. He has successfully managed both development and production contracts totaling $100 million from inception through deployment. Mr. Blakeley has a Bachelor of Science in Applied Mathematics and a Master of Science in Electrical Engineering from San Diego State University.
Robert Putnam - Senior Vice President
Mr. Putnam has been with e.Digital since its inception in 1988. He was made Senior Vice President and appointed as Director of the Company in 1995. Mr. Putnam is responsible for e.Digital's investor relations and interfacing with the investment community. He received a B.A. degree in Mass Communications from Brigham Young University in 1983.
Key Personnel
Alfred H. Falk - Vice President, Business Development
Mr. Falk joined e.Digital in 1995 as Vice President of Business Development / Vice President OEM & International Sales. Mr. Falk was appointed President and Director of e.Digital in January 1997 and on July 1, 1998 he was appointed Chief Executive Officer. On July 1, 2004 Fred Falk stepped down as the Company’s president and chief executive officer to serve as vice president of business development over the Company’s personal video technology platform. Before joining e.Digital, Mr. Falk served Resources Internationale as Director of U.S. Sales from 1993 - 1995. For the eight years prior to 1993, Mr. Falk was the Manager of OEM Sales and Technology Licensing for Personal Computer Products, Inc. From 1978 - 1988, he held several management positions at DH Technology and was instrumental in its successful start-up. Mr. Falk attended Palomar College in San Marcos and Foothill College in Los Altos, California.
Board of Directors
Alex Diaz, Chairman
Alex Diaz joined e.Digital's Board of Directors in July 2002, and was appointed Chairman in November 2002. Mr. Diaz is Executive Vice-President of Califormula Radio Group, whose holdings include Radio Latina 104.5 and the classical music station XLNC1 90.7, and formerly included the popular FM stations Jammin' Z90 and Hot Country 99.3, now operated by Clear Channel Communications. Mr. Diaz oversees the company's Wide Area Network (WAN), linking audio, production studios, and transmitter sites, all of which he designed. He also established a Web presence for several of Califormula's San Diego radio stations, including Jammin' Z90, Radio Latina, and XLNC1. In addition, he developed an audio-logging system to monitor on-air broadcasts and audit the performance of music, commercial, and live-voice broadcasts. Mr. Diaz acquired extensive experience with radio music scheduling systems while working at Radio Computing Services in New York, where he was responsible for developing and modifying software programs directed at the Latin American market for the radio broadcasting industry. He holds bachelor's degrees in mathematics and computer science from the University of California in San Diego and is fluent in Spanish and French.
Allen Cocumelli
Allen Cocumelli has served on e.Digital's Board of Directors since 1999, and served as its Chairman from April 2000 to November 2002. Mr. Cocumelli currently serves as Chief Operating Officer and general counsel for Simple Network Communications, Inc. (SimpleNet), a subsidiary of broadcast.com, which was acquired by Yahoo! Inc. in 1999. Allen Cocumelli has served as Simple Network's corporate counsel since its inception in 1996, and joined their management team in 1997. Mr. Cocumelli's background also includes seven years at Intel Corporation as a manager in the Components Manufacturing Group and as Director of Corporate Training and Development. His activities at Intel included the start-up of four manufacturing facilities, the implementation of a corporate-wide training development system and management responsibility for over 300 employees in four domestic and overseas locations. Mr. Cocumelli holds a B.S. in Industrial Psychology from UCLA and a law degree from Thomas Jefferson University in San Diego, California.
Robert Putnam - Senior Vice President
Mr. Putnam has been with e.Digital since its inception in 1988. He was made Senior Vice President and appointed as Director of the Company in 1995. Mr. Putnam is responsible for e.Digital's investor relations and interfacing with the investment community. He received a B.A. degree in Mass Communications from Brigham Young University in 1983.
Renee Warden
Ms. Warden joined e.Digital’s board of directors in 2005, where she currently heads the company’s audit committee. Renee Warden joined the Company as Accounting Manager in 1991. In 1997 Ms. Warden was appointed Controller and Corporate Secretary for the company and in 2003 was promoted to Chief Accounting Officer and Secretary. From 1993 to 2003 Ms. Warden also held the positions of Chief Accounting Officer, Secretary and Director of Human Resources for American Technology Corporation. In May of 2005 Ms. Warden resigned from her position as chief accounting officer and corporate secretary to take a financial position with another company. Ms. Warden obtained a B.S. degree in business accounting from the University of Phoenix in 1999.
Here's the whole thingy..............
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
November 8, 2005 (November 2, 2005)
Date of Report (Date of earliest event reported)
E.DIGITAL CORPORATION
(Exact name of registrant as specified in charter)
Delaware
(State or other jurisdiction of incorporation)
0-20734
(Commission File Number)
33-0591385
(IRS Employer Identification No.)
13114 Evening Creek Drive South
San Diego, California 92128
(Address of principal executive offices)
(858) 679-1504
(Registrant’s telephone number, including area code)
--------------------------------------------------------------------------------
ITEM 8.01. Other Events.
e. Digital Corporation has entered into amendments with the holders of the company’s 12% Subordinated Promissory Notes (“12% Notes”) to (i) extend the maturity date under the 12% Notes from December 31, 2005 to December 31, 2006, (ii) authorize an additional $500,000 in principal amount of 12% Notes (the “Additional Notes”), (iii) pay the purchasers of the Additional Notes (in the aggregate) a royalty as consideration for the additional financing necessary for the development of the company’s new MedeViewer product equal to up to Twenty Dollars ($20.00) for each MedeViewer sold for a period of three years (the “Royalty”) and (iv) change the terms of conversion.
The full text of each amended agreement is attached hereto as Exhibit 4.50.1 and Exhibit 4.51.2, respectively.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
e.DIGITAL CORPORATION
Date: November 8, 2005 By: /s/ Robert Putnam
Robert Putnam, Senior Vice President and Secretary
(Principal Executive Officer and duly authorized
to sign on behalf of the Registrant)
EXHIBIT INDEX
Exhibit No. Description
4.50.1 Form of Amendment to 12% Subordinated Promissory Note and Warrant Purchase Agreement between the company and certain accredited investors (individual amendments differ only as to name of Purchaser)
4.51.2 Form of Second Amendment to 12% Subordinated Promissory Note between the company and certain accredited investors (individual amendments differ only as to name of Payee)
2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EXHIBIT 4.50.1
AMENDMENT
TO
12% SUBORDINATED PROMISSORY NOTE AND WARRANT PURCHASE AGREEMENT
THIS AMENDMENT TO 12% SUBORDINATED PROMISSORY NOTE AND WARRANT PURCHASE AGREEMENT (this “ Amendment ”) is made and entered into as of October 25, 2005, by and among e.Digital Corporation, a Delaware corporation (the “ Company ”), and each of those persons and entities, severally and not jointly, whose names are set forth on the Schedule of Purchasers attached hereto as Exhibit A (which persons and entities are hereinafter collectively referred to as “ Purchasers ” and each individually as a “ Purchaser ”).
R E C I T A L S
A. Whereas, the Company has previously entered into that certain 12% Subordinated Promissory Note and Warrant Purchase Agreement dated on or about July 1, 2004 (the “ Agreement ”) and, in connection therewith, issued to Purchasers certain 12% Subordinated Promissory Note (individually, a “ Note ” and collectively, the “ Notes ”) and certain Stock Purchase Warrants of even date (individually, a “ Warrant ” and collectively, the “ Warrants ”);
B. Whereas, holders of at least fifty-one percent (51%) in the aggregate principal amount of the Notes outstanding may amend, modify and/or waive certain requirements and obligations of the Company under the Agreement and bind all Purchasers with respect to such amendment, modification and waiver;
C. Whereas, the Company desires to amend, modify and/or waive certain requirements and obligations of the Company under the Agreement and Purchaser, consents to such modification as set forth herein.
NOW, THEREFORE, for a valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows:
1. Aggregate Principal Amount . The Company is hereby authorized to issue an additional $500,000 in principal amount of Notes. In connection therewith, the aggregate principal amount of Notes referenced in (i) the first unnumbered Recital and (ii) Section 7 of the Agreement, is hereby increased from $1,000,000 to $1,500,000. Section 2.3 is hereby revised to delete the phrase “June 30, 2004” and replace it with November 30, 2005.” No increase in the number of Warrants is authorized by this Amendment.
2. Amendments to Note . Exhibit B is hereby deleted in its entirety and replaced with the Amended and Restated 12% Subordinated Promissory Note attached hereto as Exhibit A. Purchasers hereby consent to the revised terms contained therein including, without limitation, (i) a “ Maturity Date ” of December 31, 2006, (ii) amended “conversion” rights and (iii) a royalty to be paid solely to the purchasers of the additional $500,000 in Notes (the “ Additional Notes ”) as consideration for the additional financing necessary for the development of the Company’s new MedeViewer product, which shall, in the aggregate, shall be equal to up to Twenty Dollars ($20.00) for each MedeViewer sold for a period of three years (the “ Royalty ”). Purchaser hereby consents to the payment of the aggregate Royalty to the holders of the Additional Notes pro rata. Purchaser understands that Purchaser will not receive the Royalty unless Purchaser is a purchaser of Additional Notes.
3. Effective Amendment . Except as expressly modified, altered or supplemented herein, all of the provisions of the Note remain in full force and effect; provided , however , that in the event of any conflict between the provisions of the Note and the provisions of this Amendment, the provisions of this Amendment shall control.
4. Counterparts . This Amendment may be executed in two or more counterparts each of which shall be deemed an original but all of which taken together shall constitute but one and the same Amendment.
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment to 12% Subordinated Promissory Note and Warrant Purchase Agreement as of the date first above written.
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SIGNATURE PAGE
TO
AMENDMENT
TO
12% SUBORDINATED PROMISSORY NOTE AND WARRANT PURCHASE AGREEMENT
“COMPANY” “PURCHASER”
E.DIGITAL CORPORATION
13114 Evening Creek Drive South Name
San Diego, California 92128
By: ____________________________
By: ____________________________
Robert Putnam T itle: ____________________________
Senior Vice President and Secretary
Address: ____________________________
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EXHIBIT A
NOTE SERIES 04-A
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY STATE SECURITIES LAWS, AND IS A “RESTRICTED SECURITY” AS THAT TERM IS DEFINED IN RULE 144 UNDER THE ACT. THIS NOTE MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
THIS NOTE IS SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER SET FORTH IN THAT CERTAIN 12% SUBORDINATED PROMISSORY NOTE AND WARRANT PURCHASE AGREEMENT (“PURCHASE AGREEMENT”) THEREFOR BETWEEN THE COMPANY AND THE ORIGINAL HOLDER HEREOF.
(ALL AMOUNTS IN U.S. DOLLARS)
E.DIGITAL CORPORATION
AMENDED AND RESTATED
12% SUBORDINATED PROMISSORY NOTE
Due December 31, 2006
Note Date: _________________ US$_____________. 00
San Diego, California
FOR VALUE RECEIVED, e.Digital Corporation, the undersigned Delaware corporation (together with all successors, the “ Company ”), hereby promises to pay to the order of
Payee:
or his, her or its successors or assigns
(collectively, “ Noteholder ”) at
Address:
or at such other address or addresses as Noteholder may subsequently designate in writing to the Company, the principal sum of ________________ and NO/100 Dollars ($______________.00), due and payable in one installment on December 31, 2006 (“ Maturity Date ”), plus simple interest thereon at the rate of twelve percent (12.00%) per annum, in lawful monies of the United States of America. Interest shall be paid in monthly installments on or before the first day of each month, computed on the basis of a 360 day year and a 30 day month. If the Maturity Date should fall on a weekend or national holiday, payment shall be due on the following business day. This Note is one of a duly authorized issue of Notes of the Company designated as its 12% Subordinated Promissory Notes (herein called the “ Notes ”), limited in aggregate principal amount to $1,500,000.
1. Payment . Any payment shall be deemed timely made if received by Noteholder within fifteen (15) calendar days of the due date. Payments received shall be imputed first to late or penalty charges, if any, then due, next to interest payments then due, and next to the remaining unpaid principal balance.
An “ Event of Default ” occurs if (a) the Company does not make the payment of interest or principal of this Note when the same becomes due and payable and such default shall continue for a period of fifteen (15) calendar days, (b) the Company fails to comply with any of its other agreements in this Note that do not otherwise have separate remedies or provisions and such failure continues for the period and after the notice specified below, (c) pursuant to or within the meaning of any Bankruptcy Law (as hereinafter defined), the Company: (i) commences a voluntary case; (ii) consents to the entry of an order for relief against it in an involuntary case; (iii) consents to the appointment of a Custodian (as hereinafter defined) of it or for all or substantially all of its property or (iv) makes a general assignment for the benefit of its creditors or (v) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (A) is for relief against the Company in an involuntary case; (B) appoints a Custodian of the Company or for all or substantially all of its property or (C) orders the liquidation of the Company, and any order or decree remains unstayed and in effect for a period of sixty (60) days. As used herein, the term “ Bankruptcy Law ” means Title 11 of the United States Code or any similar federal or state law for the relief of debtors. The term “ Custodian ” means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.
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A default above is not an Event of Default until the holders of at least 25% in aggregate principal amount of the Notes then outstanding notify the Company of such default and the Company does not cure it within sixty (60) days after receipt of such notice, which must specify the default, demand that it be remedied and state that it is a “ Notice of Default .” If an Event of Default occurs and is continuing, the Noteholder hereof by notice to the Company, may declare the principal of and accrued interest on this Note to be due and payable immediately; provided, however, that the holders of at least 51% in aggregate principal amount of the Notes then outstanding, by written notice to the Company, may rescind and annul such declaration and its consequences.
2. Prepayment . The Company may prepay this Note at any time and from time to time, in whole or in part, without the prior written agreement of Noteholder, upon payment of a prepayment fee equal to thirty days’ interest (on the portion of principal that is being prepaid). Any prepayment of this Note shall be applied first against any prepayment fee, then against accrued interest and then against principal. Upon payment in full of the principal amount of this Note and interest thereon, the Noteholder shall surrender this Note for cancellation. The Company shall only make principal reductions or prepayments pro rata among the Noteholders of this series. Likewise any Noteholder who receives any payments or proceeds from any enforcement of a security interest or any distribution in connection with a bankruptcy, liquidation, reorganization, dissolution, winding-up or similar proceedings, shall be obligated to pro rate such amounts among the other Noteholders of this series as provided in the Purchase Agreement between the Company and the original holder hereof.
3. Intercreditor Agreement . Relationships between the Noteholder and each of the other Noteholders shall be determined pursuant to the intercreditor agreements set forth in Section 7 of the 12% Subordinated Promissory Note and Warrant Purchase Agreement of even date (the “ Purchase Agreement ”) and Sections 1 and 2 herein on a pari passu basis.
4. Warrants . This Note is being issued in conjunction with certain warrants. A portion of the original issue price of this investment unit (consisting of this Note and its associated warrants) has been allocated to these warrants. The original issue price of this Note is therefore less than its principal amount. Because the excess of the principal amount of this Note over its original issue price is less than (a) one-quarter of one percent of this Note’s principal amount (b) multiplied by the number of complete years to this Note’s maturity, this Note will not have “ original issue discount ” as that phrase is defined for United States income tax purposes. Any Noteholder may contact the Company’s Chief Financial Officer, Treasurer or Chief Accounting Officer at its principal office (or such other address as the Company shall subsequently furnish to the Noteholder) for further information concerning the computation of original issue discount under the terms of this Note.
5. Conversion .
5.1 Voluntary Conversion . Any Noteholder of this Note has the right, at the Noteholder’s option, at any time beginning forty-eight (48) hours after the date of the Note, and prior to payment in full of the principal balance of this Note at Maturity or any prepayment date, to convert this Note, in accordance with the provisions of Section 5.2.1 hereof, in whole or in part, into fully paid and nonassessable shares of common stock, $.001 par value per share, of the Company (the “Common Stock”). The number of shares of Common Stock into which this Note may be converted (“Conversion Shares”) shall be determined by dividing the aggregate principal amount of the Note by the Conversion Price (as defined below) in effect at the time of such conversion. The initial Conversion Price shall be equal to nineteen cents ($0.19).
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5.2 Conversion Procedure .
5.2.1 Notice of Conversion Pursuant to Section 5.1 . Before the Noteholder shall be entitled to voluntarily convert this Note into shares of Common Stock, it shall surrender this Note at the office of the Company and shall give five day advance written notice by mail, postage prepaid, to the Company at its principal corporate office, of the election to convert the same pursuant to this Section 5.2, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. Unless waived by the Company in its sole discretion, the minimum conversion amount accepted by the Company for conversion hereunder shall be the lesser of: a $25,000 principal balance on the Noteholder’s Note, or the remaining principal balance on the Noteholder’s Note. The Company shall, as soon as practicable after the fifth day from the date of the written notice, issue and deliver at such office to the Noteholder of this Note a certificate or certificates for the number of shares of Common Stock to which the Noteholder of this Note shall be entitled as aforesaid. Such conversion shall be deemed to have been made on the close of business on the fifth day from the date of written notice, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock as of such date.
5.2.2 Delivery of Stock Certificates . As promptly as practicable after the conversion of this Note, the Company at its expense will issue and deliver to the Noteholder of this Note a certificate or certificates for the number of full shares of Common Stock issuable upon such conversion.
5.3 Mechanics and Effect of Conversion . No fractional shares of Common Stock shall be issued upon conversion of this Note. In lieu of the Company issuing any fractional shares to the Noteholder upon the conversion of this Note, the Company shall pay to the Noteholder the amount of outstanding principal that is not so converted, such payment to be in the form as provided below. Upon the conversion of this Note pursuant to Section 5.1 above, the Noteholder shall surrender this Note, duly endorsed, at the principal office of the Company. At its expense, the Company shall, as soon as practicable after the notice period, issue and deliver to such Noteholder at such principal office a certificate or certificates for the number of shares of such Common Stock to which the Noteholder shall be entitled upon such conversion (bearing such legends as are required hereby and by applicable state and federal securities laws in the opinion of counsel to the Company), together with any other securities and property to which the Noteholder is entitled upon such conversion under the terms of this Note, including a check payable to the Noteholder for any cash amounts payable as described above. Upon conversion of this Note and irrespective of whether the Noteholder complies with its obligation under this paragraph to surrender the endorsed Note to the Company, the Company shall be forever released from all its obligations and liabilities under this Note, except that the Company shall be obligated to pay the Noteholder, within thirty (30) days after the date of such conversion, any interest accrued and unpaid to and including the date of such conversion, and no more.
5.4 Conversion Price Adjustments .
5.4.1 Shares Issued for Less Than Conversion Price . If at any time or from time to time prior to the Maturity Date, the Company sells any Common Stock or any indebtedness, bonds, debentures, notes, preferred stock or similar equity securities which are convertible into or exercisable for Common Stock at a price less than the Conversion Price, the Conversion Price shall thereupon be reduced to such lesser price. Notwithstanding anything to the contrary herein, the provisions of this Section 5.4 shall not apply to any such securities issued or to be issued pursuant to (i) securities issued to employees, consultants, officers or directors of the Company pursuant to any stock option, stock purchase or stock bonus plan, agreement or arrangement approved by the Board of Directors; (ii) securities issued pursuant to the acquisition of another business entity or business segment of any such entity by the Company by merger, purchase of substantially all of the assets or other reorganization whereby the Company will own more than fifty (50%) of the voting power of such business segment of any such entity; (iii) securities issued to vendors or customers or to other persons in similar commercial situations with the Company if such issuance is approved by the Board of Directors; (iv) securities issued in corporate partnering transactions on terms approved by the Board of Directors; (v) securities issued in accordance with the terms of any of the Company’s preferred stock or warrants outstanding on the date hereof, if any; and (vi) borrowings, direct or indirect, from financial institutions regularly engaged in the business of lending money, whether or not presently authorized with an equity component which is not a major component of such borrowing. Notwithstanding anything to the contrary herein, the provisions of this Section 5.4 shall not apply to the first $100,000 in proceeds received by the Company from the sale of any Common Stock or any securities convertible into or exercisable for Common Stock or similar equity securities sold in any successive 180-day period beginning on the date of this Note and continuing through the Maturity Date. For example, to demonstrate the operation of the preceding sentence, the Company may sell such equity securities and receive $100,000 in the first 180-day period after the date of this Note, and after the expiration of the first 180-day period may sell another $100,000 in such securities during the succeeding 180-day period and the $200,000 in total proceeds received from the sales in both such transactions shall not apply to and shall be exempt from the operation of this Section 5.4.
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5.5 Adjustments for Stock Splits and Subdivisions . In the event the Company should at any time or from time to time after the date of issuance hereof fix a record date for the effectuation of a split or subdivision of the outstanding shares of Common Stock or the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in additional shares of Common Stock or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly, additional shares of Common Stock (hereinafter referred to as “Common Stock Equivalents”) without payment of any consideration by such holder for the additional shares of Common Stock or the Common Stock Equivalents (including the additional shares of Common Stock issuable upon conversion or exercise thereof), then, as of such record date (or the date of such dividend distribution, split or subdivision if no record date is fixed), the Conversion Price of this Note shall be appropriately decreased so that the number of shares of Common Stock issuable upon conversion of this Note shall be increased in proportion to such increase of outstanding shares.
5.6 Adjustment for Reverse Stock Splits . If the number of shares of Common Stock outstanding at any time after the date hereof is decreased by a combination of the outstanding shares of Common Stock, then, following the record date of such combination, the Conversion Price for this Note shall be appropriately increased so that the number of shares of Common Stock issuable on conversion hereof shall be decreased in proportion to such decrease in outstanding shares.
6. Subordination . The indebtedness evidenced by this Note is hereby expressly subordinated, to the extent and in the manner hereinafter set forth, in right of payment to the prior payment in full of all of the Company’s Senior Indebtedness, as hereinafter defined; provided, however, that the maximum aggregate amount of the Company’s Senior Indebtedness to which the indebtedness evidenced by this Note shall be subordinated shall not exceed One Million Dollars ($1,000,000). The Company may, however, in its sole and absolute discretion, incur and/or have outstanding from time to time Senior Indebtedness in excess of the amount stated in the immediately preceding sentence, and the existence of such Senior Indebtedness shall not diminish in any way the subordination of the indebtedness evidenced by this Note.
As used in this Note, the term “ Senior Indebtedness ” shall mean the principal of and unpaid accrued interest on: (a) all indebtedness of the Company to banks, insurance companies or other financial institutions regularly engaged in the business of lending money, which is for money borrowed by the Company (whether or not secured and whether or not existing as of the date of this Note or hereafter incurred); (b) the 15% Unsecured Promissory Note in the original principal amount of $750,000 issued by the Company on December 11, 2002, as amended (the “ 15% Unsecured Note ”); and (c) any such indebtedness issued in exchange for such Senior Indebtedness, or any indebtedness arising from the satisfaction of such Senior Indebtedness by a guarantor.
If there should occur any receivership, insolvency, assignment for the benefit of creditors, bankruptcy, reorganization or arrangement with creditors (whether or not pursuant to bankruptcy or other insolvency laws), sale of all or substantially all of the assets, dissolution, liquidation or any other marshalling of the assets and liabilities of the Company, or if this Note shall be declared due and payable upon the occurrence of an event of default with respect to any Senior Indebtedness, then (a) no amount shall be paid by the Company in respect of the principal of or interest on this Note at the time outstanding, unless and until the principal and interest on the Senior Indebtedness then outstanding shall be paid in full; and (b) no claim or proof of claim shall be filed with the Company by or on behalf of the Noteholder that shall assert any right to receive any payments in respect of the principal of and interest on this Note, except subject to the payment in full of the principal of and interest on all of the Senior Indebtedness then outstanding. If there occurs an event of default that has been declared in writing with respect to any Senior Indebtedness, or in the instrument under which any Senior Indebtedness is outstanding, permitting the holder of such Senior Indebtedness to accelerate the maturity thereof, then, unless and until such event of default shall have been cured and waived or shall have ceased to exist, or all Senior Indebtedness shall have been paid in full, no payment shall be made in respect of the principal of or interest on this Note, unless within three (3) months after the happening of such event of default, the maturity of such Senior Indebtedness shall not have been accelerated.
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Subject to the rights, if any, of the holders of Senior Indebtedness under this Section 6 to receive cash, securities and other properties otherwise payable or deliverable to the Noteholder, nothing contained in this Section 6 shall impair, as between the Company and the Noteholder, the obligation of the Company, subject to the terms and conditions hereof, to pay to the Noteholder the principal hereof and interest hereon as and when the same become due and payable, or shall prevent the Noteholder, upon default hereunder, from exercising all rights, powers and remedies otherwise provided herein or by applicable law.
Subject to the payment in full of all Senior Indebtedness and until this Note shall be paid in full, the Noteholder shall be subrogated to the rights of the holders of Senior Indebtedness (to the extent of payments or distributions previously made to such holders of Senior Indebtedness pursuant to the provisions of this Section 6) to receive payments or distributions of assets of the Company applicable to the Senior Indebtedness. No such payments or distributions applicable to the Senior Indebtedness shall, as between the Company and its creditors, other than the holders of Senior Indebtedness and the Noteholder, be deemed to be a payment by the Company to or on account of this Note; and for the purposes of such subrogation, no payments or distributions to the holders of Senior Indebtedness to which the Noteholder would be entitled except for the provisions of this Section 6 shall, as between the Company and its creditors, other than the holders of Senior Indebtedness and the Noteholder, be deemed to be a payment by the Company to or on account of the Senior Indebtedness.
By its acceptance of this Note, the Noteholder agrees to execute and deliver such documents as may be requested from time to time by the Company or the lender of any Senior Indebtedness in order to implement the foregoing provisions of this Section 6.
7. Replacement . If this Note becomes worn, defaced or mutilated but is still substantially intact and recognizable, the Company or its agent may issue a new Note in lieu hereof upon its surrender. Where the Noteholder claims that the Note has been lost, destroyed or wrongfully taken, the Company shall issue a new Note of like tenor in place of the original Note if the Noteholder so requests by written notice to the Company together with an affidavit of the Noteholder setting forth the facts concerning such loss, destruction or wrongful taking and such other information in such form with such proof or verification as the Company may request. The Company in addition may require, at its sole discretion, indemnification and/or an indemnity bond in such amount and issued by such surety as the Company deems satisfactory.
8. Attorneys Fees . If the indebtedness represented by this Note or any part thereof is collected in bankruptcy, receivership or other judicial proceedings or if this Note is placed in the hands of attorneys for collection after default, the Company agrees to pay, in addition to the principal and interest payable hereunder, reasonable attorneys’ fees and costs incurred by the Noteholder.
9. Notice . Any notice, demand, consent or other communication hereunder shall be in writing addressed to the Company at its principal office or, in the case of Noteholder, at Noteholder’s address appearing above, or to such other address as such party shall have theretofore furnished by like notice, and either served personally, sent by express, registered or certified first class mail, postage prepaid, sent by facsimile transmission, or delivered by reputable commercial courier. Such notice shall be deemed given (a) when so personally delivered, or (b) if mailed as aforesaid, five (5) days after the same shall have been posted, or (c) if sent by facsimile transmission, as soon as the sender receives written or telephonic confirmation that the message has been received and such facsimile is followed the same day by mailing by prepaid first class mail, or (d) if delivered by commercial courier, upon receipt.
10. Waiver . The Company hereby waives present, demand for performance, notice of non-performance, protest, notice of protest and notice of dishonor. No delay on the part of Noteholder in exercising any right hereunder shall operate as a waiver of such right or any other right.
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11. Governing Law . This Note shall be governed by and construed in accordance with the laws of the State of California applicable to contracts between residents of such state entered into and to be performed entirely within such state.
12. Severabilit y. Each provision of this Note shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Note is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.
13. Royalty . Noteholders acquiring Notes on or after October 26, 2005 shall be entitled to receive a royalty (“Royalty”) equal to (i) the principal of this Note divided by (ii) $500,000 (the aggregate principal of the additional Notes sold concurrently herewith) (the “Additional Notes”) multiplied by (iii) Twenty Dollars ($20.00) for each MedeViewer sold during calendar years 2006, 2007 and 2008. The Royalty shall be paid quarterly to holders of the Additional Notes in lieu of warrants referenced in Section 4.
IN WITNESS WHEREOF , the undersigned Company has executed this Note and has affixed hereto its corporate seal.
E.DIGITAL CORPORATION,
a Delaware corporation
Date: By:
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Robert Putnam
Vice President and Secretary
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Exhibit 4.51.2
SECOND AMENDMENT
TO
12% SUBORDINATED PROMISSORY NOTE
THIS SECOND AMENDMENT TO 12% SUBORDINATED PROMISSORY NOTE (this “Amendment”) is made and entered into as of October 25, 2005, by E.DIGITAL CORPORATION, a Delaware corporation (“Maker”) in favor of [_____________________________], or its registered assigns (“Payee”).
R E C I T A L S
A. Whereas, Maker has previously executed and delivered to Payee that certain 12% Subordinated Promissory Note dated on or about July 1, 2004 (the “Note”) and, in connection therewith, issued to Payee a Stock Purchase Warrant of even date (the “Warrant”);
B. Whereas, Payee is one of several holders of the 12% Subordinated Promissory Notes (collectively, the “Notes”) and one of several holders of Stock Purchase Warrants (collectively, the “Warrants”);
C. Whereas, holders of at least fifty-one percent (51%) in the aggregate principal amount of the Notes outstanding may amend, modify and/or waive certain requirements and obligations of the Maker under the 12% Subordinated Promissory Notes and bind all holders with respect to such amendment, modification and waiver;
D. Whereas, the terms of the 12% Subordinated Promissory Notes were previously amended on June 30, 2005 to extend the Maturity Date from July 1, 2005 to December 31, 2005 and adjust the exercise price of the Warrants; and
E. Whereas, Maker desires to further amend, modify and/or waive certain requirements and obligations of the Maker under the 12% Subordinated Promissory Notes and Payee, consents to such modification as set forth herein.
NOW, THEREFORE, for a valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows:
1. Maturity Date . The “Maturity Date” referenced in the first unnumbered paragraph of the Note, as amended, is hereby extended from December 31, 2005 to December 31, 2006.
2. Aggregate Principal Amount . Maker is hereby authorized to issue an additional $500,000 in principal amount of Notes. In connection therewith, the aggregate principal amount of Notes referenced in the first unnumbered paragraph of the Note, as amended, is hereby increased from $1,000,000 to $1,500,000. . No increase in the number of Warrants is authorized by this Amendment.
3. Royalty for New Financing . Payee understands that Maker intends to offer purchasers of the additional $500,000 in Notes (the “Additional Notes”) a royalty as consideration for the additional financing necessary for the development of its new MedeViewer product and that such royalty, in the aggregate, shall be equal to up to Twenty Dollars ($20.00) for each MedeViewer sold for a period of three years (the “Royalty”). Payee hereby consents to the payment of the aggregate Royalty to the holders of the Additional Notes pro rata. Payee understands that Payee will not receive the Royalty unless Payee is a purchaser of Additional Notes.
4. Conversion . Paragraph 5 of the Note is hereby is hereby deleted in its entirety and replaced with provisions set forth on Exhibit A attached hereto.
5. Effective Amendment . Except as expressly modified, altered or supplemented herein, all of the provisions of the Note remain in full force and effect; provided , however , that in the event of any conflict between the provisions of the Note and the provisions of this Amendment, the provisions of this Amendment shall control.
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6. Counterparts . This Amendment may be executed in two or more counterparts each of which shall be deemed an original but all of which taken together shall constitute but one and the same Amendment.
IN WITNESS WHEREOF, the parties hereto have duly executed this Second Amendment to 12% Subordinated Promissory Note as of the date first above written.
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SIGNATURE PAGE
TO
SECOND AMENDMENT
TO
12% SUBORDINATED PROMISSORY NOTE
“MAKER” “PAYEE”
E.DIGITAL CORPORATION Name
13114 Evening Creek Drive South
San Diego, California 92128 By: ____________________________
Title: ____________________________
By: ____________________________ Address: ____________________________
Robert Putnam
Senior Vice President and Secretary
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EXHIBIT A
5 Conversion .
5.1 Voluntary Conversion . Any Noteholder of this Note has the right, at the Noteholder’s option, at any time beginning forty-eight (48) hours after the date of the Note, and prior to payment in full of the principal balance of this Note at Maturity or any prepayment date, to convert this Note, in accordance with the provisions of Section 5.2.1 hereof, in whole or in part, into fully paid and nonassessable shares of common stock, $.001 par value per share, of the Company (the “Common Stock”). The number of shares of Common Stock into which this Note may be converted (“Conversion Shares”) shall be determined by dividing the aggregate principal amount of the Note by the Conversion Price (as defined below) in effect at the time of such conversion. The initial Conversion Price shall be equal to nineteen cents ($0.19).
5.2 Conversion Procedure .
5.2.1 Notice of Conversion Pursuant to Section 5.1 . Before the Noteholder shall be entitled to voluntarily convert this Note into shares of Common Stock, it shall surrender this Note at the office of the Company and shall give five day advance written notice by mail, postage prepaid, to the Company at its principal corporate office, of the election to convert the same pursuant to this Section 5.2, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. Unless waived by the Company in its sole discretion, the minimum conversion amount accepted by the Company for conversion hereunder shall be the lesser of: a $25,000 principal balance on the Noteholder’s Note, or the remaining principal balance on the Noteholder’s Note. The Company shall, as soon as practicable after the fifth day from the date of the written notice, issue and deliver at such office to the Noteholder of this Note a certificate or certificates for the number of shares of Common Stock to which the Noteholder of this Note shall be entitled as aforesaid. Such conversion shall be deemed to have been made on the close of business on the fifth day from the date of written notice, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock as of such date.
5.2.2 Delivery of Stock Certificates . As promptly as practicable after the conversion of this Note, the Company at its expense will issue and deliver to the Noteholder of this Note a certificate or certificates for the number of full shares of Common Stock issuable upon such conversion.
5.3 Mechanics and Effect of Conversion . No fractional shares of Common Stock shall be issued upon conversion of this Note. In lieu of the Company issuing any fractional shares to the Noteholder upon the conversion of this Note, the Company shall pay to the Noteholder the amount of outstanding principal that is not so converted, such payment to be in the form as provided below. Upon the conversion of this Note pursuant to Section 5.1 above, the Noteholder shall surrender this Note, duly endorsed, at the principal office of the Company. At its expense, the Company shall, as soon as practicable after the notice period, issue and deliver to such Noteholder at such principal office a certificate or certificates for the number of shares of such Common Stock to which the Noteholder shall be entitled upon such conversion (bearing such legends as are required hereby and by applicable state and federal securities laws in the opinion of counsel to the Company), together with any other securities and property to which the Noteholder is entitled upon such conversion under the terms of this Note, including a check payable to the Noteholder for any cash amounts payable as described above. Upon conversion of this Note and irrespective of whether the Noteholder complies with its obligation under this paragraph to surrender the endorsed Note to the Company, the Company shall be forever released from all its obligations and liabilities under this Note, except that the Company shall be obligated to pay the Noteholder, within thirty (30) days after the date of such conversion, any interest accrued and unpaid to and including the date of such conversion, and no more.
5.4 Conversion Price Adjustments .
5.4.1 Shares Issued for Less Than Conversion Price . If at any time or from time to time prior to the Maturity Date, the Company sells any Common Stock or any indebtedness, bonds, debentures, notes, preferred stock or similar equity securities which are convertible into or exercisable for Common Stock at a price less than the Conversion Price, the Conversion Price shall thereupon be reduced to such lesser price. Notwithstanding anything to the contrary herein, the provisions of this Section 5.4 shall not apply to any such securities issued or to be issued pursuant to (i) securities issued to employees, consultants, officers or directors of the Company pursuant to any stock option, stock purchase or stock bonus plan, agreement or arrangement approved by the Board of Directors; (ii) securities issued pursuant to the acquisition of another business entity or business segment of any such entity by the Company by merger, purchase of substantially all of the assets or other reorganization whereby the Company will own more than fifty (50%) of the voting power of such business segment of any such entity; (iii) securities issued to vendors or customers or to other persons in similar commercial situations with the Company if such issuance is approved by the Board of Directors; (iv) securities issued in corporate partnering transactions on terms approved by the Board of Directors; (v) securities issued in accordance with the terms of any of the Company’s preferred stock or warrants outstanding on the date hereof, if any; and (vi) borrowings, direct or indirect, from financial institutions regularly engaged in the business of lending money, whether or not presently authorized with an equity component which is not a major component of such borrowing. Notwithstanding anything to the contrary herein, the provisions of this Section 5.4 shall not apply to the first $100,000 in proceeds received by the Company from the sale of any Common Stock or any securities convertible into or exercisable for Common Stock or similar equity securities sold in any successive 180-day period beginning on the date of this Note and continuing through the Maturity Date. For example, to demonstrate the operation of the preceding sentence, the Company may sell such equity securities and receive $100,000 in the first 180-day period after the date of this Note, and after the expiration of the first 180-day period may sell another $100,000 in such securities during the succeeding 180-day period and the $200,000 in total proceeds received from the sales in both such transactions shall not apply to and shall be exempt from the operation of this Section 5.4.
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5.5 Adjustments for Stock Splits and Subdivisions . In the event the Company should at any time or from time to time after the date of issuance hereof fix a record date for the effectuation of a split or subdivision of the outstanding shares of Common Stock or the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in additional shares of Common Stock or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly, additional shares of Common Stock (hereinafter referred to as “Common Stock Equivalents”) without payment of any consideration by such holder for the additional shares of Common Stock or the Common Stock Equivalents (including the additional shares of Common Stock issuable upon conversion or exercise thereof), then, as of such record date (or the date of such dividend distribution, split or subdivision if no record date is fixed), the Conversion Price of this Note shall be appropriately decreased so that the number of shares of Common Stock issuable upon conversion of this Note shall be increased in proportion to such increase of outstanding shares.
5.6 Adjustment for Reverse Stock Splits . If the number of shares of Common Stock outstanding at any time after the date hereof is decreased by a combination of the outstanding shares of Common Stock, then, following the record date of such combination, the Conversion Price for this Note shall be appropriately increased so that the number of shares of Common Stock issuable on conversion hereof shall be decreased in proportion to such decrease in outstanding shares.
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WSJ, are you saying that they are Fairy - fairy's over at Angora? Not that there is anything wrong with that.............