eDigital Reports Third Quarter Results
Tuesday, February 14, 2017 5:07:00 PM ET
e.Digital Corporation (OTCQB: EDIG), a long standing source of innovation and future-defining patented technologies, today announced results for its third quarter of fiscal year 2017, ended December 31, 2016.
Patent monetization update - Nunchi? -The Company began enforcing its Nunchi? patents against companies in the connected home security market in fiscal 2015. During the third fiscal quarter of 2017 the Company entered into two new patent license agreements. To date the Companys enforcement actions have resulted in five patent licenses covering six companies. The Company continues to identify companies that it believes infringe the Nunchi technology.
Nunchi technology gathers information based on physical sensors, actions in an environment, as well as historical data, and acts on this information to perform operations or communicate. Applications based on Nunchi technology may include the use of the cloud, communication networks, sensors, algorithms, as well as databases, to understand and respond to the needs of people.
Smart home product development - Utilizing its patented intellectual property, the Company is developing a smart home product to monitor a households water usage, help prevent water damage and reduce insurance claims by detecting leaks and monitoring water pressure in real-time, assess water quality, and assist homeowners with water conservation efforts. Water conservation is a critical issue impacting the environment as nationwide water supplies become increasingly stressed and water damage claims cost individual homeowners thousands of dollars, and insurance companies billions of dollars every year. The Company recently completed the industrial design phase of the project and continues to focus on firmware and software development.
"In addition to our Nunchi based IoT product development, we are also focusing on cyber security opportunities that leverage the teachings of our Nunchi, SYNAP(TM) and microSignet(TM) technologies," commented Fred Falk, president and CEO of eDigital. "The cyber security space is a notoriously difficult space to penetrate without long standing relationships or the financial resources to support product development, but can be very lucrative once a foothold is established. We continue to meet with potential investors and partners that could allow us to bring products to this burgeoning and expansive industry which is expected to grow to $170 billion annually by 2020," concluded Falk.
Third Quarter Fiscal 2017 Financial Summary: The Company reported a net income of $73,365 or $0.00 per share, for the third quarter of fiscal 2017 compared to a net loss of $363,869 or $(0.00) per share for the prior years third quarter. There were two patent licenses signed in the third quarter of fiscal 2017 with revenues of $151,000. This compares to no revenue for the third quarter of the prior year. Operating costs and expenses were $77,635 after the benefit of a $265,139 adjustment to reduce accrued contingent legal fees expenses and recaptures posted in the quarter. Operating costs and expenses were $364,669 for the prior years comparable third quarter.
For the nine months ended December 31, 2016, the Company reported a net loss of $339,670 or $(0.00) per share on revenues of $744,366. For the comparable nine months of the prior year the Company reported a net loss of $838,526 or $(0.00) per share on revenues of $709,531. The Company expects additional Nunchi related license revenue in the last quarter of fiscal 2017 and the Companys results are materially impacted by the timing, size and nature of license fees and related costs.
About e.Digital Corporation: For more than 27 years, eDigitals ideas and inventions have impacted the evolution of consumer products. Today, eDigital innovations, including the Nunchi? portfolio, empower many portable consumer electronic products. For more information about eDigital, please visit: www.edigital.com.
Safe Harbor statement under the Private Securities Litigation Reform of 1995: This press release includes forward-looking information and statements. Except for historical information contained in this release, statements in this release may constitute forward-looking statements regarding assumptions, projections, expectations, targets, intentions or beliefs about future events that are based on managements belief, as well as assumptions made by, and information currently available to, management. While the Company believes that expectations are based upon reasonable assumptions, there can be no assurances that goals and strategy will be realized. Numerous factors, including risks and uncertainties, may affect actual results and may cause results to differ materially from those expressed in forward-looking statements made by the Company or on its behalf. Some of these factors include the substantial uncertainties inherent in pursuing patent enforcement activities including, but not limited to the risks and costs of litigation and support activities, the timing and amount of settlements/licenses if any, the acceptance of existing and future products and technologies, the difficulty of commercializing and protecting new technology such as the Companys Nunchi, microSignet, Synap and other technologies, the impact of competitive products, technologies and pricing, general business and economic conditions, and other factors detailed in the Companys Annual Report on Form 10-K and other periodic reports filed with the SEC. Except as required by law, the Company specifically disclaims any obligation to update or revise any forward-looking statement whether as a result of new information, future developments or otherwise.
e.Digital Corporation and subsidiary
Condensed Consolidated Balance Sheet
(000s omitted except per share amount)
December31, March 31,
Cash 232 701
Accounts receivable 68 -
Deposits and prepaid expenses 42 31
Total current assets 342 732
Property and equipment, net 20 27
Total assets 362 759
LIABILITIES AND STOCKHOLDERS EQUITY
Accounts payable 59 121
Accrued and other 76 109
Total current liabilities 135 230
Stockholders equity 227 529
Total liabilities and stockholders equity 362 759
e.Digital Corporation and subsidiary
Condensed Consolidated Statement of Operations
(000s omitted except per share amount)
For the three months For the nine months
ended December 31, ended December 31,
2016 2015 2016 2015
$ $ $ $
Revenues 151 - 744 710
Cost of revenues
Products and services - - - 8
Patent licensing and litigation costs 65 113 283 338
Contingent legal fees expenses and recaptures (264) 4 (41) 292
Contingent royalties 1 - 16 -
Selling and administrative 190 176 570 658
Research and related expenditures 85 71 256 253
Total operating expenses 77 364 1,084 1,549
Income (loss) before provision for income taxes 74 (364) (340) (839)
Other income - 1 - 1
Income (loss) before income taxes 74 (363) (340) (838)
Income tax benefit (expense) - - - -
Net income (loss) for the period 74 (363) (340) (838)
Dividends on preferred stock - - - -
Income (loss) attributed to common stockholders 74 (363) (340) (838)
Income (loss) per common share - basic and diluted 0.00 (0.00) (0.00) (0.00)
Weighted average common shares outstanding
Basic 293,678 293,678 293,678 293,565
Diluted 293,678 293,678 293,678 293,565
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SOURCE e.Digital Corporation