E.Digital Corporation
Encyclopedia
e. Digital Corporation is a public company
based in San Diego, California
. Founded in 1988 as Norris Communications, it is one of the publicly traded companies started by inventor/entrepreneur Elwood "Woody" Norris. Its stock trades over-the-counter
on the OTCBB under the ticker symbol
"EDIG."
under the Company Act
in the Province of British Columbia
, Canada
on February 11, 1988 under the name 340520 B.C. Ltd. and changed its name to Norris Communications Corp. on April 7, 1988. On November 22, 1994 the Company changed its jurisdiction to the Yukon Territory. In August, 1996, jurisdiction was changed to the State of Wyoming
.
The company was reincorporated in the State of Delaware
in September, 1996 as Norris Communications, Inc. In January, 1999 stockholders approved a name change to e.Digital Corporation.
for its fiscal year ending March 31, 2009 due to settlements with six of eight defendants of its patent infringement lawsuits which resulted in one-time licensing fees totalling $10.1 million, the company returned to an unprofitable status in fiscal year 2010, posting a net loss of $985,000. Revenue for products totalled $205,000 with service revenue totalling $749,000. Patent infringement settlement income totalled $1,600,000 for total revenue of $2,554,000.
, state the following in their opinion letter dated June 15, 2009 attached to the company's 10-K annual report for FY 2009: -
In its 10-K annual statement filed on June 16, 2009, e.Digital made additional disclosures regarding doubt about the company's ability to continue as a going concern:
services, MP3 player reference design
s and custom prototype
and product design.
From 2006 forward, service offerings have been exclusively tied to the eVU product, including warranty service, media content procurement/refreshing and hardware repair.
s which it refers to as its Flash-R patent portfolio. The company has made licensing of its patented "MicroOS" flash file system, originally called the "Norris Flash File Systerm" or "NFFS," a priority since 1997. The company says it believes that its patent
holdings relating to flash memory
are "fundamental and valuable, particularly in the areas of content file management, optimal flash memory management, and in removable flash applications."
In February 2006, e.Digital announced that it was pursuing "monetization
" of its patent portfolio. It engaged Pat Nunally, formerly of Patriot Scientific Corporation
, as an Intellectual Property
(IP) consultant
in June 2006.
On December 21, 2006 the company stated to shareholders that it had "identified 174 companies with 1,372 products that appear to employ our patent portfolio." On December 20, 2007 it further expanded its claim by stating: “To date, we have identified annual U.S. revenues of more than $20 billion from what we believe are infringing products from such companies."
In March 2007 the company engaged the law firm of Duane Morris LLP
to pursue patent infringement
claims on a contingent fee
basis. The agreement grants Duane Morris 40 - 50% of all settlements and awards after full reimbursement for expenses incurred. The contigency fee agreement also provides a lien resulting in e.Digital's patents being officially assigned to Duane Morris.
of e.Digital’s common stock
totalled 286,050,900.
to elect directors and officers and transact other business, the company did not hold a meeting of shareholders between August 2005 and September 2008. The five prior meetings were held in December 2003, November 2002, 2001 and 2000 and January 1999.
On September 17, 2008 e.Digital held an annual meeting of the stockholders and approved an increase in the number of authorized common stock shares from 300,000,000 to 350,000,000. e.Digital held its 2009 annual meeting on November 19, 2009 at the company's office. The company's directors were reelected and accountants were ratified.
On September 29, 2010, e.Digital announced that its next annual meeting of the stockholders would be postponed until February 2011.
from a low of $0.06 in January 1999 to an intra-day peak of $24.50 on January 24, 2000, fuelled primarily by speculation on multiple internet message boards, most prominently the Raging Bull forum that the stock would become listed on the NASDAQ
stock exchange
. The share price quickly receded and NASDAQ eventually denied the listing. The price of its stock dropped back to a low of $0.025 and has traded between $0.025 - $0.125 from September 1, 2010 - September 1, 2011.
Public company
This is not the same as a Government-owned corporation.A public company or publicly traded company is a limited liability company that offers its securities for sale to the general public, typically through a stock exchange, or through market makers operating in over the counter markets...
based in San Diego, California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
. Founded in 1988 as Norris Communications, it is one of the publicly traded companies started by inventor/entrepreneur Elwood "Woody" Norris. Its stock trades over-the-counter
Over-the-counter (finance)
Within the derivatives markets, many products are traded through exchanges. An exchange has the benefit of facilitating liquidity and also mitigates all credit risk concerning the default of a member of the exchange. Products traded on the exchange must be well standardised to transparent trading....
on the OTCBB under the ticker symbol
Ticker symbol
A stock symbol or ticker symbol is a short abbreviation used to uniquely identify publicly traded shares of a particular stock on a particular stock market. A stock symbol may consist of letters, numbers or a combination of both. "Ticker symbol" refers to the symbols that were printed on the ticker...
"EDIG."
Corporate history
The Company was incorporatedIncorporation (business)
Incorporation is the forming of a new corporation . The corporation may be a business, a non-profit organisation, sports club, or a government of a new city or town...
under the Company Act
Investment Company Act of 1940
The Investment Company Act of 1940 is an act of Congress. It was passed as a United States Public Law on August 22, 1940, and is codified at through . Along with the Securities Exchange Act of 1934 and Investment Advisers Act of 1940, and extensive rules issued by the Securities and Exchange...
in the Province of British Columbia
British Columbia
British Columbia is the westernmost of Canada's provinces and is known for its natural beauty, as reflected in its Latin motto, Splendor sine occasu . Its name was chosen by Queen Victoria in 1858...
, Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
on February 11, 1988 under the name 340520 B.C. Ltd. and changed its name to Norris Communications Corp. on April 7, 1988. On November 22, 1994 the Company changed its jurisdiction to the Yukon Territory. In August, 1996, jurisdiction was changed to the State of Wyoming
Wyoming
Wyoming is a state in the mountain region of the Western United States. The western two thirds of the state is covered mostly with the mountain ranges and rangelands in the foothills of the Eastern Rocky Mountains, while the eastern third of the state is high elevation prairie known as the High...
.
The company was reincorporated in the State of Delaware
Delaware
Delaware is a U.S. state located on the Atlantic Coast in the Mid-Atlantic region of the United States. It is bordered to the south and west by Maryland, and to the north by Pennsylvania...
in September, 1996 as Norris Communications, Inc. In January, 1999 stockholders approved a name change to e.Digital Corporation.
Financial status
Throughout its over 22-year history, e.Digital / Norris Communications continuously lost money. The accumulated deficit at March 31, 2010 was $80 million. Although the company reported its first annual profitProfit (accounting)
In accounting, profit can be considered to be the difference between the purchase price and the costs of bringing to market whatever it is that is accounted as an enterprise in terms of the component costs of delivered goods and/or services and any operating or other expenses.-Definition:There are...
for its fiscal year ending March 31, 2009 due to settlements with six of eight defendants of its patent infringement lawsuits which resulted in one-time licensing fees totalling $10.1 million, the company returned to an unprofitable status in fiscal year 2010, posting a net loss of $985,000. Revenue for products totalled $205,000 with service revenue totalling $749,000. Patent infringement settlement income totalled $1,600,000 for total revenue of $2,554,000.
Going concern warnings
e.Digital's accountants, Singer Lewak Greenbaum & Goldstein, LLP of Santa Ana, CaliforniaSanta Ana, California
Santa Ana is the county seat and second most populous city in Orange County, California, and with a population of 324,528 at the 2010 census, Santa Ana is the 57th-most populous city in the United States....
, state the following in their opinion letter dated June 15, 2009 attached to the company's 10-K annual report for FY 2009: -
- " As discussed in Note 1 to the consolidated financial statementsFinancial statementsA financial statement is a formal record of the financial activities of a business, person, or other entity. In British English—including United Kingdom company law—a financial statement is often referred to as an account, although the term financial statement is also used, particularly by...
, the Company has historically suffered recurring losses from operations and has a substantial accumulated deficit. This raises substantial doubt about the Company’s ability to continue as a going concernGoing concernA going concern is a business that functions without the threat of liquidation for the foreseeable future, usually regarded as at least within 12 months.-Definition of the 'going concern' concept:...
. In its 10-K annual statement filed on June 16, 2009, e.Digital made additional disclosures regarding doubt about the company's ability to continue as a going concern:
In its 10-K annual statement filed on June 16, 2009, e.Digital made additional disclosures regarding doubt about the company's ability to continue as a going concern:
- "Until the fiscal year ended March 31, 2009 (fiscal 2009), we incurred significant losses and negative cash flow from operations. Our recent profitability has resulted from one-time patent licensing revenues and there is no assurance of future licensing revenues from new licensees. Accordingly, we could incur losses in the future until product, service and/or licensing revenues are sufficient to sustain continued profitability. Our ability to continue as a going concern is in doubt and is dependent upon achieving a profitable level of operations."
Access to capital
In January 2007, e.Digital issued a press release announcing a purported $8.5 million common stock purchase agreement with Fusion Capital Fund II, LLC (Fusion). In actuality, the company issued 7,866,666 shares of its common stock in exchange for $500,000 plus the right to sell to Fusion an additional 15 million common shares at market-based prices until February 2009. The maximum total purchase price for the additional 15 million shares was $8.0 million, creating a theoretical agreement maximum of $8.5 million. However, in its SEC filings e.Digital discloses that to achieve the announced (maximum) amount, the average market-based purchase price of the additional 15 million shares would have to be $0.533 per share—a share price not seen since 2003. The agreement expired in February 2009.Products
- 1988–1993 - No products. Most income came from a manufacturing subsidiary of Norris called American Surface Mounted Devices.
- 1994–1996 - Norris Communications unveiled and marketed its Flashback, claimed to be the first portable digital voice recorder with removable flash memoryFlash memoryFlash memory is a non-volatile computer storage chip that can be electrically erased and reprogrammed. It was developed from EEPROM and must be erased in fairly large blocks before these can be rewritten with new data...
. The device employed the then newly-developed Norris Flash File System (NFFS), later re-named MicroOS.
- 1997–2000 - e.Digital's sole paying customer was LanierLanier-People:* Allen Lanier, musician in the band The Blue Öyster Cult* Bob Lanier , basketball player* Bob Lanier , Texas politician...
for which it developed and manufactured through Eltech Electronics, Inc., a portable digital dictation device and docking stationDocking stationA Docking station or port replicator or dock provides a simplified way of “plugging-in” an electronic device such as a laptop computer to common peripherals...
named Cquence Mobile to interface with Lanier's existing Cquence digital dictation system for hospitals.
- 2001–2003 – The company sold rebranded Digitalway digital audio players as well as developing and marketing its own branded players, some of which included a speech recognitionSpeech recognitionSpeech recognition converts spoken words to text. The term "voice recognition" is sometimes used to refer to recognition systems that must be trained to a particular speaker—as is the case for most desktop recognition software...
feature licensed from Lucent, which e.Digital trademarkTrademarkA trademark, trade mark, or trade-mark is a distinctive sign or indicator used by an individual, business organization, or other legal entity to identify that the products or services to consumers with which the trademark appears originate from a unique source, and to distinguish its products or...
ed as "VoiceNav." The rebranded and e.Digital-developed products were not widely accepted and resulted in gross losses of over 100% of direct product costs. During this time e.Digital also operated a free music website at domain www.wedigmusic.com.
- 2003–2006: e.Digital's only customer was APS/digEcor for which it provided custom product design and manufacturing oversight of the digEplayer 5500DigEplayerThe "digEplayer" is a product line of "digEcor." digEplayers are self-contained, portable audio video on demand hard-disk based digital entertainment devices...
originally through South KoreaSouth KoreaThe Republic of Korea , , is a sovereign state in East Asia, located on the southern portion of the Korean Peninsula. It is neighbored by the People's Republic of China to the west, Japan to the east, North Korea to the north, and the East China Sea and Republic of China to the south...
n OEMOEMOEM means the original manufacturer of a component for a product, which may be resold by another company.OEM may also refer to:-Computing:* OEM font, or OEM-US, the original character set of the IBM PC, circa 1981...
Digitalway and subsequently South Korean OEM Maycom.
- 2006–present: e Digital currently has one product - its eVU portable media playerPortable media playerA portable media player or digital audio player, is a consumer electronics device that is capable of storing and playing digital media such as audio, images, video, documents, etc. the data is typically stored on a hard drive, microdrive, or flash memory. In contrast, analog portable audio...
offered to airlines for use as a portable in-flight entertainmentIn-flight EntertainmentIn-flight entertainment refers to the entertainment available to aircraft passengers during a flight. In 1936, the airship Hindenburg offered passengers a piano, lounge, dining room, smoking room, and bar during the 2½ day flight between Europe and America...
device. In late 2006, the company stated it had conducted successful trials of its eVU product in healthcare facilities and indicated substantial pending orders in 2007 which did not occur.
Services
Throughout most of its history, Norris Communications/e.Digital Corporation offered engineeringEngineering
Engineering is the discipline, art, skill and profession of acquiring and applying scientific, mathematical, economic, social, and practical knowledge, in order to design and build structures, machines, devices, systems, materials and processes that safely realize improvements to the lives of...
services, MP3 player reference design
Reference design
Reference design refers to a technical blueprint of a system that is intended for others to copy. It contains the essential elements of the system; however, third parties may enhance or modify the design as required....
s and custom prototype
Prototype
A prototype is an early sample or model built to test a concept or process or to act as a thing to be replicated or learned from.The word prototype derives from the Greek πρωτότυπον , "primitive form", neutral of πρωτότυπος , "original, primitive", from πρῶτος , "first" and τύπος ,...
and product design.
From 2006 forward, service offerings have been exclusively tied to the eVU product, including warranty service, media content procurement/refreshing and hardware repair.
Intellectual property
e.Digital owns five patentPatent
A patent is a form of intellectual property. It consists of a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time in exchange for the public disclosure of an invention....
s which it refers to as its Flash-R patent portfolio. The company has made licensing of its patented "MicroOS" flash file system, originally called the "Norris Flash File Systerm" or "NFFS," a priority since 1997. The company says it believes that its patent
Patent
A patent is a form of intellectual property. It consists of a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time in exchange for the public disclosure of an invention....
holdings relating to flash memory
Flash memory
Flash memory is a non-volatile computer storage chip that can be electrically erased and reprogrammed. It was developed from EEPROM and must be erased in fairly large blocks before these can be rewritten with new data...
are "fundamental and valuable, particularly in the areas of content file management, optimal flash memory management, and in removable flash applications."
In February 2006, e.Digital announced that it was pursuing "monetization
Monetization
Monetization is the process of converting or establishing something into legal tender. It usually refers to the coining of currency or the printing of banknotes by central banks...
" of its patent portfolio. It engaged Pat Nunally, formerly of Patriot Scientific Corporation
Patriot Scientific Corporation
Patriot Scientific Corporation refers to itself an "Intellectual Property licensing company." Founded in 1992, it is a Delaware corporation based in Carlsbad, California and is one of the publicly traded companies started by inventor Elwood "Woody" Norris...
, as an Intellectual Property
Intellectual property
Intellectual property is a term referring to a number of distinct types of creations of the mind for which a set of exclusive rights are recognized—and the corresponding fields of law...
(IP) consultant
Consultant
A consultant is a professional who provides professional or expert advice in a particular area such as management, accountancy, the environment, entertainment, technology, law , human resources, marketing, emergency management, food production, medicine, finance, life management, economics, public...
in June 2006.
On December 21, 2006 the company stated to shareholders that it had "identified 174 companies with 1,372 products that appear to employ our patent portfolio." On December 20, 2007 it further expanded its claim by stating: “To date, we have identified annual U.S. revenues of more than $20 billion from what we believe are infringing products from such companies."
In March 2007 the company engaged the law firm of Duane Morris LLP
Duane Morris
Duane Morris LLP is a law firm headquartered in Philadelphia, Pennsylvania. Founded in 1904 as Duane, Morris, Heckscher & Roberts, the firm has 24 offices in the United States, London, Singapore and Vietnam. In addition to legal services, Duane Morris has independent affiliates employing...
to pursue patent infringement
Patent infringement
Patent infringement is the commission of a prohibited act with respect to a patented invention without permission from the patent holder. Permission may typically be granted in the form of a license. The definition of patent infringement may vary by jurisdiction, but it typically includes using or...
claims on a contingent fee
Contingent fee
A contingent fee or conditional fee is any fee for services provided where the fee is only payable if there is a favourable result...
basis. The agreement grants Duane Morris 40 - 50% of all settlements and awards after full reimbursement for expenses incurred. The contigency fee agreement also provides a lien resulting in e.Digital's patents being officially assigned to Duane Morris.
Patent infringement litigation
- The company filed its first lawsuit for infringement of its patents on August 1, 1996 in the U.S. District Court for the Southern District of California for infringement of patent number 5,491,774. Defendants were Taiwanese corporations Simate Corp. and Leading Accessories Inc. and their North American distributors James H. Rochel and J.T.L. Enterprises Inc. Outcome of that lawsuit is unknown.
- On December 6, 1996, the company announced a letter of intentLetter of intentA letter of intent is a document outlining an agreement between two or more parties before the agreement is finalized. The concept is similar to a heads of agreement...
to create a strategic and tactical alliance with competing company Voice It Worldwide Inc. Despite the fact that Voice It also claimed to be the first to use removable memory in a digital recorder, the company did not sue for infringement of its patent.
- On September 7, 2007, e.Digital filed its second lawsuit for patent infringement against VivitarVivitarVivitar Corporation was a manufacturer, distributor and marketer of photographic and optical equipment originally based in Oxnard, California. Since 2008 the Vivitar name serves as Sakar International's photographic and optical equipment brand.-Products:...
Corporation this time in the Marshall Division, Eastern District of TexasUnited States District Court for the Eastern District of TexasThe United States District Court for the Eastern District of Texas is the Federal district court with jurisdiction over the eastern part of Texas and is a part of the Fifth Circuit. The court's headquarters are in Tyler, Texas and has five subdivision offices in Beaumont, Lufkin, Marshall,...
on 4 of its 5 patents. Vivitar responded by denying the infringement claims and filing counterclaims seeking declaratory reliefDeclaratory reliefDeclaratory relief is a judge's determination of the parties' rights under a contract or a statute, often requested in a lawsuit over a contract. In theory, an early resolution of legal rights will resolve some or all of the other issues in the matter....
/summary judgement that the patents are non-infringed and invalid. In March 2009, the court administratively closed the case due to Vivitar's bankruptcy.
- On March 4, 2008, e.Digital filed an almost identical lawsuit, also in the Marshall Division, Eastern District of Texas against CasioCasiois a multinational electronic devices manufacturing company founded in 1946, with its headquarters in Shibuya, Tokyo, Japan. Casio is best known for its electronic products, such as calculators, audio equipment, PDAs, cameras, musical instruments, and watches...
America, Inc., Avid TechnologyAvid TechnologyAvid Technology, Inc. is an American company specializing in video and audio production technology; specifically, digital non-linear editing systems, management and distribution services. It was created in 1987 and became a publicly traded company in 1993...
Inc., LG ElectronicsLG ElectronicsLG Electronics is a global electronics and telecommunications company headquartered in Yeouido, Seoul, South Korea. The company operates its business through five divisions: mobile communications, home entertainment, home appliance, air conditioning and business solution...
USA, Inc., NikonNikon, also known as just Nikon, is a multinational corporation headquartered in Tokyo, Japan, specializing in optics and imaging. Its products include cameras, binoculars, microscopes, measurement instruments, and the steppers used in the photolithography steps of semiconductor fabrication, of which...
, Incorporated, OlympusOlympus Corporationis a Japan-based manufacturer of optics and reprography products. Olympus was established on 12 October 1919, initially specializing in microscope and thermometer businesses. Its global headquarters are in Shinjuku, Tokyo, Japan, while its USA operations are based in Center Valley, Pennsylvania,...
America, Inc., SamsungSamsungThe Samsung Group is a South Korean multinational conglomerate corporation headquartered in Samsung Town, Seoul, South Korea...
Electronics America, Inc. and SanyoSanyois a major electronics company and member of the Fortune 500 whose headquarters is located in Moriguchi, Osaka prefecture, Japan. Sanyo targets the middle of the market and has over 230 Subsidiaries and Affiliates....
North America Corporation. As of March 31, 2009, settlements had been reached with 6 defendants, leaving Samsung as the sole remaining defendant. On April 2, 2009 e.Digital dismissed all claims for 2 of the 4 patents it had alleged Samsung infringed. e.Digital and Samsung executed a settlement agreement in September, 2009.
- On November 2, 2009, e.Digital filed a lawsuit alleging infringement of patent number 5,491,774 in the Federal District Court for ColoradoUnited States District Court for the District of ColoradoThe United States District Court for the District of Colorado is the Federal district court whose jurisdiction is the state of Colorado. The United States Congress organized Colorado as a single judicial district on June 26, 1876, by 19 Stat. 61...
against PentaxPentaxPentax is a brand name used by Hoya Corporation for its medical-related products & services and Pentax Ricoh Imaging Company for cameras, sport optics , etc. Hoya purchased and merged with the Japanese optics company on March 31, 2008. Hoya's Pentax imaging business was sold to Ricoh Company, Ltd...
of America, Inc., Hoya CorporationHoya Corporationis a Japanese company leading in manufacturing of optical products including photomasks, photomask blanks and glass magnetic-memory disks, contact lenses and eyeglass lenses using the wavefront technology, Photonics...
, Hoya Corporation USA, Canon USA, Inc., Canon Inc., Coby Electronics Corporation, DXG Technology (U.S.A.), Inc., DXG Technology, Inc., HTC America, Inc., HTC Corporation, Ikegami Electronics (USA), Inc., Imation Corporation, Kyocera Communications, Inc., Kyocera Wireless, Inc., Kyocera International, Inc., Kyocera Corporation, Leica Camera, Inc., Leica Camera AG, MarantzMarantzMarantz is a company that develops and sells upper-mid range to high-end audio products.The first Marantz audio product was designed and built by Saul B. Marantz in his home in Kew Gardens, New York...
America, Inc., D&M Holdings U.S. Inc., D&M HoldingsD&M HoldingsD&M Holdings is a Japanese corporation that owns several audio and video brands. It was formed in 2002 from the merger of Denon and Marantz. It has acquired several other companies since that time. In 2008 it was acquired by K. K. BCJ-2, a Tokyo corporation owned by investment funds advised...
, Inc., NokiaNokiaNokia Corporation is a Finnish multinational communications corporation that is headquartered in Keilaniemi, Espoo, a city neighbouring Finland's capital Helsinki...
, Inc., Nokia Corporation, Panasonic Corporation of North America, Panasonic Corporation, Summit Global Group, LLC, Roland Systems Group U.S., Roland CorporationRoland Corporationis a Japanese manufacturer of electronic musical instruments, electronic equipment and software. It was founded by Ikutaro Kakehashi in Osaka on April 18, 1972, with ¥33 million in capital. In 2005 Roland's headquarters relocated to Hamamatsu in Shizuoka Prefecture. Today it has factories in Japan,...
, Sakar International, Inc., Samson Technologies Corp., TeacTeacTEAC Corporation is an electronics company based in Japan. TEAC was founded in 1953 as the Tokyo Electro Acoustic Company. TEAC has four divisions:*TASCAM - consumer to professional audio products, mostly recording...
America, Inc., VTechVTechVTech is the common name of Video Technology Ltd. , a Hong Kong-based manufacturer of consumer electronics...
Electronics North America, LLC and TIC Computer, Inc. (DBA Wolverine Data).
Settlements
- On September 25, 2008, e.Digital announced the first settlement of its patent infringement lawsuits. A subsequent court filing releasing LG ElectronicsLG ElectronicsLG Electronics is a global electronics and telecommunications company headquartered in Yeouido, Seoul, South Korea. The company operates its business through five divisions: mobile communications, home entertainment, home appliance, air conditioning and business solution...
USA, Inc. as a defendant identified it as the settling party. The gross settlement amount reported in form 10-Q was $1.6 million.
- On December 2, 2008, e.Digital announced a settlement and cross licensing agreement with CasioCasiois a multinational electronic devices manufacturing company founded in 1946, with its headquarters in Shibuya, Tokyo, Japan. Casio is best known for its electronic products, such as calculators, audio equipment, PDAs, cameras, musical instruments, and watches...
. The gross settlement fee as calculated from data in the quarterly report was $1.65 million.
- On December 17, 2008, e.Digital and NikonNikon, also known as just Nikon, is a multinational corporation headquartered in Tokyo, Japan, specializing in optics and imaging. Its products include cameras, binoculars, microscopes, measurement instruments, and the steppers used in the photolithography steps of semiconductor fabrication, of which...
Inc. filed a joint motion with the Court stating they had reached a settlement of their dispute. The gross settlement fee as calculated from data in the quarterly report was $2.0 million.
- In February 2009, e.Digital reached settlements with Avid TechnologyAvid TechnologyAvid Technology, Inc. is an American company specializing in video and audio production technology; specifically, digital non-linear editing systems, management and distribution services. It was created in 1987 and became a publicly traded company in 1993...
, OlympusOlympus Corporationis a Japan-based manufacturer of optics and reprography products. Olympus was established on 12 October 1919, initially specializing in microscope and thermometer businesses. Its global headquarters are in Shinjuku, Tokyo, Japan, while its USA operations are based in Center Valley, Pennsylvania,...
America Inc. and SanyoSanyois a major electronics company and member of the Fortune 500 whose headquarters is located in Moriguchi, Osaka prefecture, Japan. Sanyo targets the middle of the market and has over 230 Subsidiaries and Affiliates....
North America according to court filings. Financial terms were not disclosed but e.Digital booked $4,865,350 in gross settlement fees from the 3 companies in the quarter ended March 31, 2009.
- In September 2009, e.Digital executed a settlement agreement with SamsungSamsungThe Samsung Group is a South Korean multinational conglomerate corporation headquartered in Samsung Town, Seoul, South Korea...
according to court filings. The gross settlement amount reported in the 10-Q quarterly report for the period ended September 30, 2009 was $1.25 million.
- On December 10, 2009, e.Digital announced a settlement agreement with TIC Computer, Inc. (DBA as Wolverine Data) which included an undisclosed lump-sum payment and an undisclosed royalty for any on-going sales of products that practice e.Digital’s U.S. Patent 5,491,774. According to e.Digital's quarterly report, the lump-sum payment is not due to be paid until November 2010.
- In March 2010, e.Digital announced a settlement agreement with Ikegami Electronics (USA) which provided an undisclosed on-going royalty as well as a settlement agreement with the two Roland entities which included an undisclosed one-time fee.
digEcor v. e.Digital Corporation
- In March 2006, e.Digital announced that its contract manufacturer, Maycom, was either unwilling or unable to fulfill a purchase order it had placed to fulfill a purchase order from its customer digEcor for 1,250 digEplayerDigEplayerThe "digEplayer" is a product line of "digEcor." digEplayers are self-contained, portable audio video on demand hard-disk based digital entertainment devices...
s and batteries.
- In May 2006, digEcor, filed a lawsuit against e.Digital regarding the non-delivery of its pre-paid purchase order placed in November, 2005. digEcor sought, among other things, actual damages of $793,750, consequential damages of not less than $1,000,000. e.Digital eventually delivered the players to digEcor without batteries in October 2006 and the parties entered into a partial settlement agreement reducing the actual damages claim to $80,000 for the undelivered batteries. digEcor also sought an injunction barring e.Digital from engaging in any competition with digEcor until after 2009, alleging violation by e.Digital of an April 2002 agreement not to compete with digEcor for a period of 7 years it entered into with Bill Boyer Jr.Bill Boyer Jr.Bill Boyer, Jr. is a 50% owner and former CEO of Hawaii's Mokulele Airlines. In March 2009, he was replaced as the airline's CEO and was put in charge of expanding sales and marketing efforts after Republic Airways became a 50% shareholder...
, original owner of digEcor (then named APS) and conceiver of the product and business model. Because the agreement did not specify which State's laws should be applied, the court had to make the determination. The court decided that the agreement should be held to California State law, which disallows non-compete agreements.
- On September 10, 2009, the court ruled against digEcor on all remaining claims against e.Digital. No damages or injunctive relief were awarded to digEcor. On October 15, 2009, the court modified its previous summary judgement to reflect its award of $80,000 in favor of digEcor and against e.Digital for undelievered batteries. The companies later filed an agreement with the court to settle that claim for $60,000 to be paid by e.Digital to digEcor.
Shares outstanding
As of June 1, 2010, basic shares outstandingShares outstanding
Shares outstanding are common shares that have been authorized, issued, and purchased by investors. They have voting rights and represent ownership in the corporation by the person or institution that holds the shares. They should be distinguished from treasury shares, which is common stock held by...
of e.Digital’s common stock
Common stock
Common stock is a form of corporate equity ownership, a type of security. It is called "common" to distinguish it from preferred stock. In the event of bankruptcy, common stock investors receive their funds after preferred stock holders, bondholders, creditors, etc...
totalled 286,050,900.
Annual meetings of shareholders
Despite that Delaware General Corporation Law and e.Digital's own corporate by-laws require the company to hold an annual meeting of shareholdersAnnual general meeting
An annual general meeting is a meeting that official bodies, and associations involving the public , are often required by law to hold...
to elect directors and officers and transact other business, the company did not hold a meeting of shareholders between August 2005 and September 2008. The five prior meetings were held in December 2003, November 2002, 2001 and 2000 and January 1999.
On September 17, 2008 e.Digital held an annual meeting of the stockholders and approved an increase in the number of authorized common stock shares from 300,000,000 to 350,000,000. e.Digital held its 2009 annual meeting on November 19, 2009 at the company's office. The company's directors were reelected and accountants were ratified.
On September 29, 2010, e.Digital announced that its next annual meeting of the stockholders would be postponed until February 2011.
Key people
- Woody Norris, Founder
- Alfred H. Falk, President/CEO: Falk was promoted and re-appointed President and CEO of the company on January 20, 2009. He formerly served as President and a member of the Board from January 1997 (and from July 1998 as CEO) until July 2004 when he resigned to again become e.Digital's Vice President (VP) of Corporate Development. From March 1995 to January 1997, he served as VP of Corporate Development and VP of OEM and International Sales. Previously Falk worked for Resources Internationale as director of U.S. sales from 1993 to 1995 and from 1988 to 1993, he was the manager of OEM sales and technology licensing for Personal Computer Products, Inc. From 1978 to 1988, he held several positions at DH Technology. Falk attended two California community collegesCommunity colleges in the United StatesIn the United States, community colleges are primarily two-year public institutions of higher education and were once commonly called junior colleges....
, Palomar CollegePalomar CollegePalomar College is a community college with one campus and six education sites in San Diego County, California. The main campus is located in San Marcos, while the six education sites are located elsewhere throughout north San Diego County. The largest of these is the education center located in...
in San Marcos and Foothill CollegeFoothill CollegeFoothill College is a community college located in Los Altos Hills, California and is part of the Foothill-De Anza Community College District. It was founded on January 15, 1957 by Founding Superintendent and President Dr. Calvin C. Flint.-History:...
in Los Altos but did not achieve a degree.
- Allen Cocumelli, Chairman of the Board: Cocumelli has served on e.Digital's Board of Directors since 1999. He was re-appointed Chairman in October 2008 upon the resignation of Chairman Alex Diaz, having previously served as Chairman from April 2000 to November 2002. He has been Corporate Secretary and General CounselGeneral CounselA general counsel is the chief lawyer of a legal department, usually in a corporation or government department. The term is most used in the United States...
of SimpleNet, Inc. since 2004. Previously he was General Counsel of Simplenet Network Communications Inc. from 1996 and COOChief operating officerA Chief Operating Officer or Director of Operations can be one of the highest-ranking executives in an organization and comprises part of the "C-Suite"...
from November 1997 until its 1998 buyout by Broadcast.comBroadcast.comBroadcast.com was a web radio company founded as "AudioNet" in September 1995 by Chris Jaeb. Todd Wagner and Mark Cuban later led the organization to hugely capitalize on the Dot-com bubble and be sold to Yahoo.com.-History:...
, when he became a Director of Website Services from 2000 to 2004. Prior to joining Simplenet Network Communications, he was in the private practice of law. From 1978 to 1986 he worked at Intel CorporationIntel CorporationIntel Corporation is an American multinational semiconductor chip maker corporation headquartered in Santa Clara, California, United States and the world's largest semiconductor chip maker, based on revenue. It is the inventor of the x86 series of microprocessors, the processors found in most...
as a manager in the Components Manufacturing Group and eventually Director of Corporate Training and Development. He obtained a B.S. degree in Industrial Psychology from the University of California, Los AngelesUniversity of California, Los AngelesThe University of California, Los Angeles is a public research university located in the Westwood neighborhood of Los Angeles, California, USA. It was founded in 1919 as the "Southern Branch" of the University of California and is the second oldest of the ten campuses...
in 1972 and a J.D.Juris DoctorJuris Doctor is a professional doctorate and first professional graduate degree in law.The degree was first awarded by Harvard University in the United States in the late 19th century and was created as a modern version of the old European doctor of law degree Juris Doctor (see etymology and...
from the Thomas Jefferson School of LawThomas Jefferson School of LawThomas Jefferson School of Law, or TJSL, is an independent law school in San Diego, California. It offers a Juris Doctor, and three Master of Laws programs, including one that is exclusively online, as well as a combined J.D./M.B.A. with San Diego State University...
in 1991.
- Renee Warden, Director: Warden joined e.Digital’s Board of Directors in 2005. She has been a financial manager for VerifoneVeriFoneVeriFone is a company that makes point-of-sale equipment. It was founded and incorporated in Hawaii in 1981, and named itself after its first product, the name standing for Verification telephone....
since July 2009. She was Director of Accounting for Revolution MoneyRevolution MoneyRevolution Money is a financial services company whose products include a PIN-based credit card, online person-to-person payments service with a linked stored value card, and gift card...
, Inc. from April 2007 to July 2009 and was previously Manager of Special Projects/SOX for Global Signal, Inc. She was a Vice President and Controller for Kintera, Inc. from May 2005 to May 2006. Prior to joining Kintera, she was an executive officer of e.Digital. She joined e.Digital in 1991 as Accounting Manager and in 1997 was appointed ControllerComptrollerA comptroller is a management level position responsible for supervising the quality of accounting and financial reporting of an organization.In British government, the Comptroller General or Comptroller and Auditor General is in most countries the external auditor of the budget execution of the...
and Corporate Secretary. In 2003 she was promoted to Chief Accounting Officer and Corporate Secretary until May 2005. From 1993 to 2003, Warden also held the positions of Chief Accounting Officer, Secretary and Director of Human Resources for American Technology Corporation. She obtained a B.S. degree in business accounting from the University of PhoenixUniversity of PhoenixThe University of Phoenix is a for-profit institution of higher learning. It is a wholly owned subsidiary of Apollo Group Inc. which is publicly traded , an S&P 500 corporation based in Phoenix, Arizona...
in 1999.
- Eric M. Polis, Director: Polis was appointed to the Company’s Board of Directors in October, 2008. He has been an asset manager for privately-held Davric Corporation since 1997. From 2000 to 2010, he was also Secretary, Treasurer and a Director of ASI Technology CorporationASI Technology CorporationASI Technology Corporation is a public Nevada corporation based in Henderson, Nevada. On June 21, 2010 the Company received a written consent from the holder of 51.6% of the outstanding common stock in lieu of a meeting of shareholders adopting resolutions to amend the Articles of Incorporation...
, a former specialty finance company. Polis obtained a B.S. in Business Administration from the University of ArizonaUniversity of ArizonaThe University of Arizona is a land-grant and space-grant public institution of higher education and research located in Tucson, Arizona, United States. The University of Arizona was the first university in the state of Arizona, founded in 1885...
in 1993.
Notoriety
e.Digital is perhaps best known for a phenomenal rise in the price of its stock during the dot-com bubbleDot-com bubble
The dot-com bubble was a speculative bubble covering roughly 1995–2000 during which stock markets in industrialized nations saw their equity value rise rapidly from growth in the more...
from a low of $0.06 in January 1999 to an intra-day peak of $24.50 on January 24, 2000, fuelled primarily by speculation on multiple internet message boards, most prominently the Raging Bull forum that the stock would become listed on the NASDAQ
NASDAQ
The NASDAQ Stock Market, also known as the NASDAQ, is an American stock exchange. "NASDAQ" originally stood for "National Association of Securities Dealers Automated Quotations". It is the second-largest stock exchange by market capitalization in the world, after the New York Stock Exchange. As of...
stock exchange
Stock exchange
A stock exchange is an entity that provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and...
. The share price quickly receded and NASDAQ eventually denied the listing. The price of its stock dropped back to a low of $0.025 and has traded between $0.025 - $0.125 from September 1, 2010 - September 1, 2011.