The Company reported net income attributable to common stockholders of $731,000, or $0.00 per share, for the first quarter of fiscal 2012 compared to a net loss of $382,000 or $(0.00) per share for the prior year’s first quarter. For the first quarter of fiscal 2012 revenues totaled $2.2 million compared to $512,000 for the first quarter of the prior year. The most recent quarter included $2 million of patent license revenues compared to $25,000 for the first quarter of the prior year. Gross profit for the first quarter, including the positive contribution of licensing margins, was $1,169,000, 54% of revenues, compared to $174,000, 34% of revenues, for the prior year’s first quarter. Operating expenses declined to $438,000 from $524,000 for the prior year’s comparable quarter primarily due to reduced staffing costs including reduced non-cash stock compensation expense.

“Our results continue to be dependent on the timing and amount of patent license revenues and related margins,” said Fred Falk, president and CEO of e.Digital Corporation. During the first fiscal quarter of 2012 the Company recognized two new license arrangements covering three defendants. As there is a reluctance of patent infringers to negotiate and license without legal action, the Company is now in its second round of legal action and through the quarter ended June 30, 2011 had licensed fourteen defendants. The Company has an outstanding complaint against eleven remaining electronics manufacturers.

As previously reported, the June 2011 Markman opinion construed claim terms in one of the Company’s Flash-R patents more narrowly than proposed by the Company. The parties to the litigation subsequently proposed a future discovery plan and requested the court to construe a claim term from a second patent in the litigation. The Company believes these recent developments could affect future licensing of the ‘774 patent. However, a successful determination from the United States Patent and Trademark Office (“USPTO”) patent reexamination could resolve ambiguities and assist the Company in future enforcement of its ‘774 patent. As a consequence of these and other factors, the timing and amount of licenses, if any, by existing defendants is uncertain. Future events including court rulings, patent reexamination results and other factors could have a significant positive or negative impact on future patent enforcement and licensing activity.

Falk concluded, "While the IFE business remains slow and sporadic, we continue to aggressively pursue technology licensing activities. In fiscal 2011 we filed seven patent applications related to communication networks and digital data distribution. We continue to add what we believe to be important IP to our portfolio and seek to license applications of this IP this fiscal year."