e.Digital Corporation (fka EDIG)

[wm_wallace2000]

The JAMBA Situation Easily Explained:

From EDIG’s 1997 YE 10KSB (filed 6/26/97), pg. 9:
“the Company's ownership in JABRA at March 31, 1997, represented by 940,734 common shares was 12.1%.”
(Estimated total JABRA shares based on the 12.1%: 7.8 Million)

From EDIG’s 1998 YE 10KSB (filed 6/26/98) pg. 3:
“The Company also holds as an investment 58,600 common shares (less than 3%) of JABRA...”
(Estimated total JABRA shares outstanding based on the 3% : 1.95 Million)
**** There looks like there may have been a 4 for 1 reverse split here, but who knows???)

From EDIG’s 1999 YE 10KSB40 (filed 6/28/99) pg. 41:
“The Company's 58,600 shares or approximately 2.5% investment in JABRA Corporation ("JABRA")”
(Estimated total JABRA shares outstanding based on the 2.5% : 2.34 Million)

From EDIG’s 2000 YE 10KSB40 (filed 6/27/98):
The is absolutely NO MENTION of JABRA at all.

Ok, Here is the FIRST problem. A 10K annual report is supposed to list every source of revenue you had within that year, every expense you had within that year, every asset you held in that year, every asset you disposed of in that year, every liability on your books, every investment, stock your company held within that year, etc..

You really don’t have to look at all the other filings in between these 10K's, the 10K is supposed ot reflect everything that happened in that specific year, and encompass everything on the other filings.

In the 3 10K’s following the YE 1997 10K, there is NO EXPLANATION as to what happened to these JAMBRA shares.

The filings mentioned that the stock on EDIG’s balance sheet was carried at “nil” value for accounting purposes, but as you can see in 1993 & 1996 EDIG sold some of these shares for millions of dollars! So the definitely had a substantial value.


Here is the SECOND Problem: On 8/24/00, GN Netcom bought out JABRA for $40 Million + $35 Million additional payments = $70 Million total.

http://www.gnnetcom.com/usa/news.html

If the 4 for one Stock Split actually happened, which is the best, least damning case scenario for EDIG, there are JABRA 235,183 shares that disappeared from EDIG’s balance sheet with NO Explanation! This has a value of, according to the merger, of roughly $7 million dollars.

Norris, Falk, Putnam and Warden all signed these 10K’s as to their validity.

Also, to say this was an oversight in book keeping won’t fly because the disappearance of these shares happen SEVERAL times on different 10K’s!

Don’t expect Putnam to answer your questions. I think he wants to spend all his future holidays with his family.