F-up10 - My conflicting opinion
is that there was no "lying" done by our mgmt, but by F-10 reps. While I agree that JC made many false or way pre-mature statements (I seem to recall something about $2.6M), I remain convinced that FF at the ASM was speaking in good faith of his understanding of the situation at that exact point in time. If I recall correctly, at the ASM, he said something like "per communications this morning" blah, blah, F-10 is in full production. I suspect this notice was given by F-10 via multple layers of management at distant locations with a language barrier (no speeky ingy okay). We know how communication can falter under such circumstances (look at all the examples on this board - lol! - and we think we speak the same language!), so I am much more incline to place the "blame" there than anywhere else. We were advised of the difficulties and mis-representations of F-10 in January, I believe, and it is historically clear that EDIG pursued reconciliation for an extended period before dropping the arbitration bomb (which is a last resort manuever clearly impacting the probability of further business). I do believe F-10 will drag this thing out as long as possibly (any timely action clause may be useless if one party - F-10 - recognizes they will likely lose. What can EDIG do? Request arbitration over the lack of timely arbitration? Or pursue conventional legal avenues that would just drag things out longer?). EDIG made it very clear in the following PR that F-10 had not operated in good faith and had mis-represented the facts on multiple occasions, and apparently failed to put things in writing. But you seem to want to just shoot the messenger (FF).
"SAN DIEGO--(BUSINESS WIRE)--April 20, 2004--e.Digital Corporation (OTC:EDIG - News) today announced it has filed a demand for arbitration against Eclipse by Fujitsu Ten. The filing comes after several weeks of unsuccessful dialogue between the companies, during which time Eclipse by Fujitsu Ten discussed both a buyout and a re-structuring of the signed Supply Agreement. e.Digital is being represented by the San Diego offices of national law firm Gray Cary Ware & Freidenrich LLP in this action.
"In light of the time and resources we have committed to this project, the inadequate and conflicting positions taken by Eclipse by Fujitsu Ten, and their refusal to provide us with their official written position on this product and our contract with them, we have no choice but to file for arbitration as called for under the Supply Agreement," said Fred Falk, president and CEO of e.Digital Corporation. "Within the arbitration demand, we are seeking compensatory and punitive damages of up to $2.5 million plus attorneys fees for numerous breaches of the contract signed by Eclipse by Fujitsu Ten including cancellation of the initial non-cancelable order, breach of the implied covenant of good faith and fair dealing, and misappropriation of our intellectual property, confidential, proprietary and trade secret information.
"While we are disappointed with Eclipse by Fujitsu Ten's failure to perform under the Supply Agreement, we are confident we will prevail in arbitration," added Falk. "As we reported in today's Letter to Shareholders, we remain confident in our business and our proprietary technology platforms and we hope to resolve this issue as soon as possible." "
The only things bothering me about all this have nothing to do with communications from EDIG/FF, but with the delay in getting our due, and the seemingly low dollar value being pursued (dedication of limited resources to this project which could have been better allocated elsewhere - like to that HP DAP we passed on - and the value of IP shared). But I do see this as a "when" scenario, not an "if" scenario.
FWIW,
SGE
