E.DIGITAL CORPORATION CONVERTS SECURED NOTES TO SERIES D PREFERRED STOCK
(SAN DIEGO, CA – December 30, 2002) – e.Digital Corporation (OTC: EDIG) today announced that investors have converted an aggregate of $2.05 million of promissory notes to equity in the form of Series D Preferred Stock. The Company has also restructured the payment terms on its $750,000 term note.
Chief Financial Officer Ran Furman stated, "We have come to an agreement that management believes is favorable to the Company. Under this agreement, all of the $1 million of 12% Secured Promissory Notes due December 31, 2002 and all of the $1.05 million of 24% Promissory Notes have been converted into Series D Preferred Stock. The 12% Series D Preferred Stock matures June 30, 2007, is non redeemable and is convertible into shares of Common Stock at $0.20, subject to certain adjustments."
Under the renegotiated terms of the $750,000 Promissory Note, the company reduced its payments to 15% interest only through December 31, 2003. Payments consisting of $50,000 per month, including principal and interest, will begin in January 2004 and continue until May 2005 when the Note is expected to be paid in full.
Mr. Furman added "These important financial changes remove our December 31, 2002 debt obligation, significantly reduce our debt payment obligations in 2003 and improve our balance sheet going into a new calendar year. We are pleased with the confidence shown in e.Digital by these investors."
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