Replies to post #73028 on e.Digital Corporation (fka EDIG)

[Cassandra]

Maycom fiasco update:

Fluffy hype released on the wires yesterday. Today they address the huge issue facing them, but only as a "shareholder alert" that doesn't hit the wires. They certainly don't want the traders to hear about this stuff.

FWIW, I doubt that there is any reason for e.Digital to think that some "third party" has created this problem. Since they say Maycom intends to fulfill the order, the problem is not that they are unwilling, but apparently unable. They also mention that they met with "the principal," it sounds like just one person owns Maycom.

Given that Maycom is a very small company with only 6 people in production, my sense is that the problem is likely financial.

The "third party" distraction is probably more palitable than to admit that e.Digital did not verify completion of the product before making final payment. Because e.Digital is in charge of manufacturing, the blame would lie on them and they would be liable to their customer, digEcor.

03/31/06
SHAREHOLDER ALERT

e.Digital CORPORATION PROVIDES UPDATE ON status of 1250 unit digeplayer™ order

(SAN DIEGO, CA, March 31, 2006) – e.Digital Corporation (OTC: EDIG), a leading innovator of secure digital video technology and products, and patented technology in the utilization of flash memory in portable devices provided an update today regarding the status of the 1250 unit digEplayer™ order placed by customer, digEcor, in November 2005. For more details and information regarding this order, please view the following link: www.edigital.com/shal032306.htm

Since the company became aware of information indicating that its long-time contract manufacturer, Maycom Co. Ltd. (Maycom) may be unwilling or unable to complete the fully-paid purchase order for product intended for delivery to digEcor, company officials have personally visited the offices of Maycom in Korea and held face-to-face meetings with its principal. During these meetings, the company became aware of discrepancies between what had been reported previously to the company regarding the progress of the order, by Maycom and by a report from a January 2006 onsite inspection commissioned by digEcor prior to final progress payments being made. These discrepancies have caused e.Digital to begin an investigation to determine if any third parties have interfered with the company’s relationship with Maycom.

Throughout the meetings in Korea and in subsequent discussions, Maycom has assured e.Digital that it intends to fulfill its obligation under the purchase order. However, the company has yet to receive a definitive plan and timetable for such performance. Because of the uncertainty of Maycom’s timely performance, e.Digital has engaged legal representation in Korea to pursue legal remedies with Maycom and its principal(s), and other third parties if warranted. The company intends to take all necessary action to compel Maycom to fulfill its obligations. e.Digital will provide further updates regarding this matter as they become available.

About e.Digital Corporation:. e.Digital Corporation specializes in the delivery, management, and protection of secure digital content through its proprietary technology platforms. Through customer and partnering relationships, e.Digital is a provider of secure portable Video on Demand products including the Company’s proprietary eVU™. e.Digital’s services include the licensing of the Company’s MicroOS™, Content Mark-Up Language (CML) application, patent-pending hardware security technology, Digital Rights Management (DRM) solutions, and video display software applications. In addition, e.Digital partners with leading, innovative companies, designing and providing manufacturing services for products employing the Company’s proprietary digital technology platforms. For more information about e.Digital and its technology platforms, please visit the company website at www.edigital.com.

Safe Harbor statement under the Private Securities Litigation Reform of 1995: All statements made in this document, other than statements of historical fact, are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act. You should not place undue reliance on these statements. We base these statements on particular assumptions that we have made in light of our industry experience, the stage of product and market development, expected future developments and other factors that we believe are appropriate under the circumstances. These forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about the businesses of the Company and the industries and markets in which the company operates. These statements are not guarantees of future performance and involve risks, uncertainties that could cause actual results to differ materially from those suggested in the forward-looking statements, including but not limited to the Company’s ability to finance its operations, sell its products, implement a turnkey financial, product, and maintenance solution, manufacture and ship orders in a timely manner, secure additional business, the Company’s contract manufacturer’s (Maycom) ability to timely fulfill the November 11, 2005 purchase order, and other risks identified and discussed in our filings with the Securities and Exchange Commission (“SEC”). Actual outcomes and results may differ materially from what is expressed or implied by the forward-looking statements. More information about potential factors that could affect the Company can be found in its most recent Form 10-K, Form 10-Q and other reports and statements filed with the Securities and Exchange Commission (“SEC”). e.Digital Corporation disclaims any intent or obligation to update these or any forward-looking statements, except as otherwise specifically stated by it.

Note: eVU and MicroOS are trademarks of e.Digital Corporation. All other company, product, and service names are the property of their respective owners.

Press Contact:
Robert Putnam
[phone] ext.205
[e-mail]