CAL: Since you asked...
The biggest problem I see with the 10-Q is the working capital deficit of nearly $3 million (highest I've ever seen the company have) and the fact that the unsecured note is due in full by 12/31/04.
There have already been 3 forbearance agreements on that loan, so the lender may not continue to be so patient. The 10-Q did not address how that loan would be resolved, so the matter is outstanding.
It seems clear that e.Digital will need additional financing in the not-too-distant future. As all shareholders know, the history if e.Digital's financings has been deleterious on the share price.
They have also not been clear about the source of the $1 million order they announced on 10/28. Now they say they have $2.2 million in orders place so far this Q, but only $1.2 MM are attributed to Wencor/APS. Who placed the other order? Why be so sly about it?
They also neglected to give guidance for the current Q ending 12/31/04. My sense is that they do not expect to ship these products this Q, therefore the majority of revenue would likely be realized in QE 3/31/05 (unless orders aren't completed at all).
I'm interested in your thoughts about why they had to file the 2 recent Reg FD 8-K's with the SEC to cure selective disclosure of material non-public information?
To whom do you think they are making such selective disclosures? Why?
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