e.Digital Corporation (fka EDIG)

[Tinroad]

Equity funding--some thoughts from TWOMIL
From TWOMIL
PostID 166302 On Friday, February 15, 2002 (EST) at 7:39:34 PM
http://www.agoracom.com/nonmemforum/msgreview.asp?id=166302&refid=0&orig=166302

Who is investing in our company with the purchase of shares of the shelf registration is still not known. Conjecture about their being a long term holder will hopefully become known when the buyer is announced. Should they choose to remain annonymous and not be owners of over 5% of the common, that will also be their choice. Asking management about the intent of those who may be in discussions with eDig may not be disclosable on 2-19-02, but should be, at the discretion of the buyer, when stock is purchased.

I believe the shelf registration was done in such a way that discounted common will be offered to large purchasers. An expected discount could be 8 to 15% of market price. This would bypass the need for commissions and other costs for underwriting and therefore make this financing very cost efficient and provide no vehicles for offshore shorting. I suspect management has large contracted product orders from other retailers and oem's and that discussions have been in progress where equity funders learned about the nature of these orders and their profit margins. Should a funding take place within a week of the registration's approval it would be obvious that this game plan began a long time ago and has been carefully orchestrated to be timely, appropriate and efficient.

If these equity funds were going to be placed into a wholly owned subsidiary of edig, I would be inclined to consider that a large partner already working with us was involved. If these funds are going directly into edig as it's currently constituted, I would see the equity purchaser as some type of equity fund.

Most everything management has stated they would implement appears to be going forward. The information we're going to hear on Tuesday should be more detailed about both the upcoming financing as well as how we're going to place our products in retail outlets and continue to improve and further innovate our product line and those of our oems.

Good luck to all.