e.Digital Corporation (fka EDIG)

[Cassandra]

DoP: The covenants of the Series E shares require an "Initial Minimum" (also called the "current required minimum") of 9,157,895 shares to be registered within 30 days of the signing (which was on 11/19/03). #msg-1806472

The number of conversion shares required for the Series D shares is currently 10,789,474. Although the Series D covenants stated that an S-3 would be filed on 6/30/03, e.Digital did not comply, so those shares are still pending to be registered.

Therefore 19,947,369 additional common shares are pending S-3 registration for the Series D and E convertibles, which is roughly 13% dilution to existing shareholders.

Although it's possible they could again delay the registration of the Series D conversion shares, that does not seem likely or cost effective. There are major penalties if they are late in filing the S-3 due for the Series E convertibles.