NEWS + PRESS

e.DIGITAL REPORTS FISCAL YEAR 2015 RESULTS

06.25.2015| News

FOR IMMEDIATE RELEASE

(SAN DIEGO, CA, – June 25, 2015) – e.Digital Corporation (OTCQB: EDIG), a long standing source of innovation and future-defining patented technologies, today announced results for its fiscal year ended March 31, 2015.

Highlights:

Flash-R™ licensing success – Entered into 29 license and settlement agreements during fiscal 2015. To date, sought licenses through patent enforcement actions from 109 companies and related distributors with 78 agreeing to license terms as of June 4, 2015. While three Flash-R patents expired in 2014, enforcement litigation is still pending related to two Flash-R patents that expire in 2016. Flash-R litigation has aided in creating an awareness of e.Digital’s intellectual property among household named companies.

Nunchi® – Filed multiple patent infringement lawsuits during fiscal 2015 against companies in the connected home security market. Continue to identify companies that may be infringing on this technology. Granted an additional patent in March 2015, strengthening the portfolio and bringing the total number of related patents to seven. Filed an additional Nunchi related patent continuation during fiscal 2015 adding to one other continuation and one continuation in part, both of which are pending. 

New patent application – Filed a new patent application in an exciting new area of secure communications in May 2015.

Patented Technologies:

The Company is focused on monetizing the following technologies:

Flash-R – e.Digital’s Flash-R patent portfolio contains fundamental technology essential to the utilization of flash memory in portable electronics. The Company has been successfully monetizing this technology since 2008.

Nunchi – Nunchi technology encompasses the drawing together of data from fixed or mobile sensors and uniquely fusing it to recognize, understand and affect interactions. The Company is actively seeking licensing opportunities.

microSignet™ – The Company owns intellectual property in the area of on-line data protection. This patent portfolio, called microSignet, consists of one granted patent and a pending patent continuation. Unlike other security solutions, microSignet utilizes the internal physical characteristics of semiconductor memories, to establish a ‘fingerprint’ which uniquely identifies a given piece of hardware, such as a smart phone or desktop computer, which can be used for device authentication, or to bind valuable content to a particular device. For a more complete description and video demonstration, visit the microSignet webpage. The Company is seeking to license this technology, as well as develop through others. 

New patent application – enables applications to achieve the highest levels of security; protecting user communications, user data, online transactions, and physical security. Using sensor technology, it allows separate devices to independently construct large volumes of the same secure data internally, without ever having to exchange secure data between the devices. One potential application of this unique technology would allow users to fully secure communications. Central to this new technology is the mechanism to independently create common, secure data between devices.

At March 31, 2015, the Company’s intellectual property portfolio included ten U.S. patents, three pending continuations and one pending continuation in part. 

Management Commentary:

“Fiscal year 2015 marked the beginning of a transition period,” commented Fred Falk, president and CEO of e.Digital. “During the third quarter we ceased marketing our eVU mobile entertainment device and services due to the growth of personal portable electronic entertainment. We also redirected our patent monetization focus from the expiring patents of the Flash-R portfolio, to our new Nunchi portfolio.

“We have been keeping a close eye on the quickly evolving market of smart ‘connected’ devices that depend on data gathered by sophisticated sensors and algorithms to monitor areas of importance that include property, health, and day-to-day activities, and react as required. These are just a few of the teachings of the Nunchi patents. We are prioritizing royalty based licensing arrangements, versus one-time settlements. We believe this model will provide a more consistent revenue stream than we experienced with Flash-R monetization. We are approaching potential licensees through our law firm, Handal & Associates. We expect additional Flash-R licensing revenue in early fiscal 2016, with a transition to Nunchi licensing revenue thereafter. 

“We continue to believe that significant opportunities exist in the online data security market and that our microSignet technology and other new technologies can provide a compelling enhanced security solution. As with any new forward-thinking technology, it takes time to secure a foothold in the industry. 

“We are pleased with the progress we’ve made developing and monetizing our intellectual property, and are excited about the rapidly evolving industries our patent portfolios address,” concluded Falk.

Fiscal 2015 Financial Summary:

Revenues totaled $2.2 million for the fiscal year ended March 31, 2015 compared to $2.3 million in the prior year. The decline resulted primarily from decreased eVU service revenues as a result of discontinuing this business after expiration of one remaining contract in September 2015 (fiscal year 2016). Revenues for fiscal year 2015 included $2.0 million in licensing fees from the Company’s Flash-R patent portfolio. For the prior year, licensing revenue was $2.0 million. During fiscal 2015, the Company licensed 29 companies, and in the prior year had 21 new patent license agreements. 

Operating costs and expenses for fiscal year 2015 were $2.7 million, increased from $2.2 million in fiscal year 2014. The increase is primarily as a result of increased contingent legal fees related to current year patent license settlements.

The net loss for fiscal year 2015 was $235,153 or ($0.00) per diluted share, compared to the net income of $56,084 or $0.00 per diluted share for fiscal 2014.

About e.Digital Corporation: For more than 25 years, e.Digital’s ideas and inventions have impacted the evolution of consumer products. Today, e.Digital innovations, including its Flash-R™ portfolio of flash memory-related patents, and Nunchi® portfolio, are essential to many portable consumer electronic products. For more information about e.Digital, 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 management’s 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 Company’s Nunchi, microSignet and other technologies, the impact of competitive products, technologies and pricing, general business and economic conditions, and other factors detailed in the Company’s 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.

CONTACT: e.Digital Corporation: Investor Relations, (858) 304-3016 ext. 205, ir@edigital.com

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