e.Digital Corporation (fka EDIG)

[Cassandra]

She consistently dwells on the past and the financial problems during the last several years, which we all agree to, but never offers any thoughts in line with her so called expertise relating to the future.

RO: On the contrary, for the past couple of years I have posted about dismal prospects for this company ever becoming successful and that I think the stock will continue its downtrend back to historic .06 low and even lower. I've been right so far in my prospective projections on what is likely to happen with the company and its many hyped "deals."

e.Digital has always had products supposedly on the horizon that the company creates great expectations for. People have been making the exact same defense for years: "Forget the dismal past, look what's ahead... $10 million/yr Lanier contract, global standard royalties, Intel, Lucent, EASTECH, Maycom, Remote Solution/Hango, HyTek, DataPlay, Samsung, Toshiba, Musical, EDIG branded products, Circuit City, CompUSA, Good Guys, Hammacher Schlemmer, Skymal, college bookstores, broadband entertainment, DivX, $2.6 million in quarterly revenue, etc., etc., etc." See #msg-1082498 for more specific details.

Even when EDIG does get a deal, like B&O or Musical, the royalties are pathetically low. None of the HUGE deals projected for the future ever turn out to be significant. The branded products sold over the past 5 quarters cost more than twice the revenue (see #msg-1081900). This 15 year-old company can't even decide on a business plan and stick with it.

In the meantime, the company has burned through $65 million in investor-supplied funds, has used dilutive toxic financing repeatedly, obtained loans from offshore shells with outrageous terms, pays bills with stock and is about to register several million more conversion shares to for the Series D financing.

With a current ridiculous market cap of $30 million EDIG is amazingly overvalued. Even if the company could find a way to become profitable, the bloated number of shares outstanding will prevent the share price from any substantial appreciation. Additionally, I do not believe this management has what it takes to achieve major success and has proven to be untrustworthy in shareholder guidance.

FWIW, Of all of the deals EDIG is working on, I believe the Softeq one is the most substantial. The F-T deal has been delayed a year and is reminiscent of Lanier. Product will probably come out, but the financial impact to EDIG may not be great. I don't believe the APS deal will amount to much at all for EDIG as I believe the concept of using a HD-based portable device for a movie rental situation is wrought with potential problems. Using a portable DVD player like InMotion ueses, seems much more cost effective and desirable IMO. I also do not believe EDIG will ever get any kind of "bundling" deal and that royalties from DW will be a major disappointment.

I believe that e.Digital will eventually fail as a company and that those who never sell their stock are likely to lose all of their investment. EDIG may be a good stock for momo trading, but is a massive disaster as a long-term hold.