FIRST:

The alleges the following``

``complaint which alleges breaches of contract, unjust enrichment, breaches of good faith and fair dealing, fraud, negligent misrepresentation, and interference with prospective economic relations.

This is exactly what EDIG`S Complaint against digEcor will look like. digEcor just jumped the gun to be first into a forum they like, THIRD DISTRICT COURT in Salt Lake City, Utah...

This is nonsense. The case will end up in Federal Court`s

because of DIVERSITY issue, and as soon as EDIG files their cross complaint together with a Motion for removal...

Some

digEcor is seeking, among other things, an injunction to prevent e.Digital from selling or licensing certain digital rights management (DRM) technology “to any other party besides digEcor” and “from engaging in any competition with digEcor until after 2009.”...

SECOND:

digEcor is also seeking “actual damages” of $793,750 and “consequential damages...not less than an additional $1,000,000.” e.Digital believes this action is related to the purchase order we placed in the normal course of our business on November 11, 2005 for 1250 digEplayers™ with our contract manufacturer, Maycom Co., Ltd. (“Maycom”). Maycom was paid progress payments with final payments made in full for the order by e.Digital, and directly by digEcor, in March 2006.