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Cassandra

09/15/03 7:40 PM

#45782 RE: newelong #45780

NEWe: I'm having some trouble following exactly what you are claiming.

You say you asked this of RP:

Some time ago it was mentioned that our initial development contract with APS was valued at close to $1,000,000, which I believe included manufacturing and industrial/mechanical design costs [Digitalway] and our NRE/design fees, licensing fees and royalties.

Then you state:

In a phone conversation with Robert just a short time ago, he acknowledged that our contract with APS is indeed close to $1,000,0000 ... Furthermore, manufacturing costs are definitely distinct and separate from our royalties...

What do you mean when you say that manufacturing costs are definitely distinct and separate from e.Digital's royalties? Manufacturing costs are an expense and royalties are income.

I can't tell if you are trying to say that you believe e.Digital will receive additional compensation beyond royalties and licensing fees from APS for manufacturing costs, or that APS will pay Digitalway directly for manufacturing and design, bypassing e.Digital?

You also mention "supplying e.Digital`s proprietary chips with embedded MicroOS technology."

However, e.Digital has never been a seller of "proprietary chips." To what are you referring?

TIA for your clarification.