e.Digital Corporation (fka EDIG)

[JBocca9801]

Cassandra--

What is it about the following statement that you do not understand:

"The 1994 Plan provides for the granting of options which either qualify for treatment as incentive stock options under Section 422A of the Internal Revenue Code of 1986, as amended (the "Code") and are designated "incentive stock options" or which do not qualify for such treatment and are designated "nonstatutory stock options." Unless the context clearly indicates to the contrary, the term "option" used herein shall mean either an incentive stock option or a non-statutory stock option and the
term "optionee" shall mean any person holding an option granted under the 1994 Plan.

As I previously stated, the plan grants options which can qualify for either ISO or NQSO treatment. Therefore as previously posted, the options exercised in February of 2000 may very well have NQSO's, not ISO's as you have repeatedly stated.

Again, please post your support which confirms that the options exercised in February of 2000 were incentive stock options under IRC 422A.