Replies to post #49159 on e.Digital Corporation (fka EDIG)

[drag and boogie]

i'm shocked!

[Cassandra]

sdr: Your information is massively incorrect or an outright lie.

On 2/3/00, the SAME day the NASDAQ application was announced, Fred Falk, Robert Putnam and Renee Warden exercised options at $0.08 (Renee's were at 0.10) and sold them on the open market for $12+, netting millions in personal profits. Fred Falk's profits alone were about $3.3 million.

Fred did exercise some more 8-cent options in the fall not long before the NASDAQ rejection was announced, which could have triggered AMT, but it would pale in comparison to his gain earlier in the year and he can use that AMT as a tax credit when he disposes of those shares.

RP did not exercise any more options until June 2003 when he exercised options for 500,000 shares at $0.10.

You are also incorrect about the SEC not allowing the sale of shares at more than a 7% discount. The Diaz restricted share sale occurred on 8/2/02, as EDIG reported to the SEC, at a 45%discount to the market. Additionally, several of the sales of shelf shares were at discounts in the 20% range.

Are you claiming that e.Digital broke the law in those cases or lied to the SEC about the date of the Diaz sale?

[owd3]

This is incorrect.

"Fred exercised 751,684 shares Q1'2000 @ $5.46 per shr"

First off, how does one exercise a "share"?? Second, from the filing:

"Option Grants for Fiscal Year Ended March 31, 2000"

Alfred H. Falk
Number of Options Granted 2,000,000 (1) Exercise Price $5.46"

maybe you don't know this, but that little "(1)" you see there refers to a note. The note states:

"These options vested 25% at issue and 25% vest each year thereafter from issue until fully vested."

since he was only vested in 25% of those $5.46 options when granted, what you claim simply could not have happened (without major hankypanky, that is). The most he could have exercised of those $5.46 options would have been 500,000 (25% of the 2M). That is all he was vested in at the time.

What has you confused is the next section that shows what he exercised during the year, but was totally unrelated to the above granting of options at $5.46.

That section stated:

"The following table provides information on exercised and unexercised options of the Named Executive Officer at March 31, 2000.

Alfred H. Falk
Shares Acquired on Exercise- 751,684
Value Realized- $6,962,470"

The above does not state what price the options were exercised at, only that they were. The only thing you do know for sure was that the $9.26/share value he realized on those options were well above any option price outstanding at the time. He was in the money by millions.