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e.Digital Corporation (OTCMKTS:EDIG) Has Some Good News !

in response to

Re: Movin-Up To The East Side

DISCHINO

posted on Jul 20, 2016 12:00PM

Published on July 12th, 2016 | by Borislav Tonev

e.Digital Corporation (OTCMKTS:EDIG) Has Some Good News

e.Digital Corporation (OTCMKTS:EDIG) Puts Out a Press Release

e.Digital Corporation (OTCMKTS:EDIG) is not a new company. It has been around under various names since 1988 and not that long ago, it had a relatively solid business. In fact, during the year ended March 31, 2014, e.Digital even managed to achieve a positive bottom line. Unfortunately, to say that things have deteriorated since then would be a gross understatement.

Originally, e.Digital was generating revenues both through product sales and through intellectual property enforcement. Sadly, at one point, sales of the eVU mobile entertainment devices declined and in September 2015, the management team decided to abandon the product segment. At the same time, the flash memory technology patents which were bringing in a substantial amount of money through licensing deals expired.

As a result, e.Digital’s latest 10-K isn’t terribly pretty:

cash: $701 thousand
current assets: $733 thousand
current liabilities: $230 thousand
revenue: $710 thousand (as opposed to $2.2 million recorded twelve months ago)
net loss: $1.3 million

The declining trend is disconcerting on its own, but when you see that 98% of the revenues above came in the form of a one-time non recurring payment under a licensing deal, you might be feeling even more anxious.

Nevertheless, e.Digital’s stock jumped up yesterday and it reached a close of $0.06 per share because the company announced a settlement agreement with an entity called Mivatek International Inc. No details were disclosed, but it’s pretty clear that investors are hoping that yesterday’s settlement and the ones that will hopefully follow soon will help EDIG back to its feet.

Whether this will really turn out to be the case remains unknown. With the product sales gone, investors are left with few straws to clutch at and they can do little more than hope for the best. Unfortunately, hoping for the best isn’t necessarily the best investment strategy, especially in Pennyland.