Comment: Company Note: e.Digital Corporation, based in San Diego,
California, 
  Comment: licenses its line of patented hardware and software
technologies for use 
  Comment: in avariety of handheld devices, and offers custom product
design and 
  Comment: manufacturing services to its OEM customers. 
  Comment: Company Note: The Company trades on the Over-the-Counter
Bulletin Board: 
  Comment: EDIG 
  Comment: 52-week low: 0.07 52-week high: $10.00 Previous Close on 
  Comment: 1/11/2000: $6.437 
  Question: SageCalc: Can you give us a basic description of your key
technologies 
  Question: and products? 
  FredFalk 3: We're basically an engineering company 
  FredFalk 3: that develops digital recording and playback 
  FredFalk 3: technology. We've utilized that technology 
  FredFalk 3: to develop a number of products 
  FredFalk 3: including the world's first digital 
  FredFalk 3: 'voice recorder that interfaced 
  FredFalk 3: with the computer and the Internet. 
  FredFalk 3: We've also utilized that technology 
  FredFalk 3: to setup a digital dictation system 
  FredFalk 3: for a company called Lanier Worldwide 
  FredFalk 3: for the medical industry. Most recently, 
  FredFalk 3: we utilized that technology in developing 
  FredFalk 3: the world's first digital music player 
  FredFalk 3: design featuring EPACK, which is an 
  FredFalk 3: audio compression technology from Lucent. 
  FredFalk 3: In addition to EPACK, this player supports 
  FredFalk 3: multiple audio compression technologies, 
  FredFalk 3: including AAC from Dolby, WMA from 
  FredFalk 3: Microsoft, as well as MP3. 
  FredFalk 3: We announced our first licensee of 
  FredFalk 3: this design last week at the consumer 
  FredFalk 3: electronic show and are currently 
  FredFalk 3: working with numerous other potential 
  OnlineHost: "SageScap" has entered the room. 
  FredFalk 3: OEMs for licensing of this design. 
  FredFalk 3: for various applications. 
  FredFalk 3: The core to our technology is an operating 
  FredFalk 3: system that we developed five years 
  FredFalk 3: that was specifically designed for 
  FredFalk 3: portable, digital products that interfaced 
  FredFalk 3: with the computer and therefore 
  FredFalk 3: the Internet. 
  FredFalk 3: We call that operating system the 
  FredFalk 3: Micro OS 
  Question: What are your plans for going on NASDQ? 
  FredFalk 3: Our plan is we are doing everything in 
  FredFalk 3: our power to move the company from 
  FredFalk 3: the OTC to a NASDAQ listing. General 
  FredFalk 3: NASDAQ requirements call for listing 
  FredFalk 3: applications only after we reach $4 
  FredFalk 3: threshold for small cap, $5 share price 
  FredFalk 3: for a national market listing. We 
  FredFalk 3: expect to have our application in. If 
  FredFalk 3: we hold these levels or better in the next 
  FredFalk 3: 30 days. 
  FredFalk 3: At that point, it's up to NASDAQ as 
  FredFalk 3: far as the timing of review of application 
  FredFalk 3: and acceptance there of. 
  Comment: Company Note: e.Digital [EDIG]'s specialty is developing 
  Comment: computer-compatible OEM (original equipment manufacturer)
products using 
  Comment: its patented MicroOS flash memory file management system. 
  Question: Fred, does e-Digital have any serious direct competition
for its Micro OS? 
  FredFalk 3: There are other operating systems out 
  FredFalk 3: there for these devices, however, they 
  FredFalk 3: are not as robust as the operating 
  FredFalk 3: system that we have and also not 
  FredFalk 3: as efficient as our operating system. 
  FredFalk 3: There also incumbered with proprietary 
  FredFalk 3: hardware. Our is a pure flash management 
  FredFalk 3: file system. 
  FredFalk 3: We were also told by a very large 
  FredFalk 3: technology company that they have 
  FredFalk 3: reviewed numerous other operating 
  FredFalk 3: systems for these devices and found 
  FredFalk 3: that ours was the best. 
  Question: SageCalc: Who are your key customers? 
  FredFalk 3: They are basically the consumer electronic 
  FredFalk 3: companies, as well as PC manufacturers. 
  FredFalk 3: Those are the key customers. 
  Sagecalc: Currently, you are dependent I believe 3 customers? 
  FredFalk 3: Currently, our customers are Lanier, Intel 
  FredFalk 3: and Maycom. 
  FredFalk 3: We also have business relationships with 
  FredFalk 3: IBM and Lucent Technologies. 
  FredFalk 3: We also announced business relationships 
  FredFalk 3: last week with Rio Port and we announced 
  FredFalk 3: earlier a relationship with Liquid Audio. 
  Question: SageCalc: With the Diamond Rio MP3 and Creative Lab's Nomad
players out 
  Question: on the market, how do you intend to compete? 
  FredFalk 3: Basically, the difference between our player 
  FredFalk 3: design and the Diamond Rio player 
  FredFalk 3: design as well as, and I'm not totally up 
  FredFalk 3: to date on the Nomad, the big differencd 
  FredFalk 3: is that we support multiple Codecs, which 
  FredFalk 3: is audio compression technology. We 
  FredFalk 3: also support multiple digital rights 
  FredFalk 3: management systems. We are also 
  FredFalk 3: working very closely with the record 
  FredFalk 3: labels to make sure that our player 
  FredFalk 3: design will support their top 20 music 
  FredFalk 3: content,once they make it available 
  FredFalk 3: for Internet downloading. 
  Question: Are Microsoft a friend or foe? 
  FredFalk 3: I can't comment on that. 
  FredFalk 3: We seem them as friendly. That's all I can 
  FredFalk 3: comment on. 
  Question: SageCalc: How does Lucent Technologies [LU] "Enhanced
Perceptual Audio 
  Question: Codec (ePAC)" differ from MP3, and what is your role in the
usage of this 
  Question: compression/decompression standard? 
  FredFalk 3: The big difference between ePAC and 
  FredFalk 3: MP3 is that ePAC provides a very high 
  FredFalk 3: quality of audio playback. In the same 
  FredFalk 3: Utilizing the same compression ratio 
  FredFalk 3: as MP3. It also includes security technology 
  FredFalk 3: which is not found in MP3. 
  FredFalk 3: Our part was porting the ePAC codec 
  FredFalk 3: to the Texas Instruments digital signal 
  FredFalk 3: processor (DSP) and then also building 
  FredFalk 3: a reference design around that for 
  FredFalk 3: Lucent Technologies. 
  Question: SageCalc: What exactly is the IBM VoiceTIMES alliance, and
how often do 
  Question: its members interact? 
  FredFalk 3: The IBM VoiceTIMES alliance is an 
  FredFalk 3: alliance that was established to develop 
  FredFalk 3: a specification and standards for 
  FredFalk 3: portable, digital voice recorders that are 
  FredFalk 3: used in conjunction with speech to text 
  FredFalk 3: technology. There is set schedule wih 
  FredFalk 3: with regard to meetings. We meet as 
  FredFalk 3: is needed. The first specification was 
  FredFalk 3: published earlier, late last year in October 
  FredFalk 3: 1999. 
  Comment: Company Note: Flash memory can store the equivalent of 50 to
100 floppy 
  Comment: disks of data on a card one-fourth the size of a single
disk. Flash 
  Comment: memory requires no power after data is initially stored and
is faster in 
  Comment: operation than hard drives. 
  Question: Many investors have voiced concerns over the large number
of shares in 
  Question: float on EDIG, can you put their concerns to rest? I see a
lot more 
  Question: support for this stock if the float issue becomes mute.
Best regards 
  Question: from one of your biggest fans!! 
  FredFalk 3: We believe that is exactly right. Because 
  FredFalk 3: once we are on NASDAQ our liquidity will 
  FredFalk 3: allow large funds and institutions to buy 
  FredFalk 3: our stock. This will be seen as a benefit 
  FredFalk 3: at that point, not as a detriment. 
  Question: SageCalc: Why did your revenues decline by 26% in the first
nine months 
  Question: of 1999, and when do you plan on becoming profitable? 
  FredFalk 3: Basically, we were finalizing a lot of our 
  FredFalk 3: Internet music player technology and we're 
  FredFalk 3: waiting for the Linear shipments to 
  FredFalk 3: begin. We see calender 2000 to be 
  FredFalk 3: dramatically improved financially. We'll 
  FredFalk 3: forecast as we contracts from other OEMs 
  Comment: Company Note: MicroOS is an operating system for flash
memory that is 
  Comment: believed important for hand-held devices. Allows storing
large files in 
  Comment: smaller segments wherever they may fit within a flash
memory. 
  Question: Do you see yourselves dominating the digital industry like
Qualcom did 
  Question: with the CDMA patents? 
  FredFalk 3: The homerun for e.Digital will be to have 
  FredFalk 3: Micro OS become an industry standard 
  FredFalk 3: in portable digital devices. It is to that 
  FredFalk 3: end that we are working. 
  Sagecalc: Your business model is after liscensing revenue? 
  FredFalk 3: Yes, we license and then collect royalties 
  FredFalk 3: on the units that are sold either through 
  FredFalk 3: the manufacturing process if we oversee 
  FredFalk 3: that and are in charge of the contract 
  FredFalk 3: manufacturing through a third party our 
  FredFalk 3: royalty is imbedded there. If they license 
  FredFalk 3: Our revenue will be provided by margin 
  FredFalk 3: on product sales or licensing fees and 
  FredFalk 3: royalties on straight licensing type arrangements. 
  Question: Is e.Digital involved in a venture with Blockbuster to
deliver full 
  Question: motion video over the internet? 
  FredFalk 3: I cannot comment on that, however, 
  FredFalk 3: we are working on incorporating video 
  FredFalk 3: technology into portable digital devices. 
  Question: Will MP3 become an obsolete format? 
  FredFalk 3: No, we believe that MP3 will always have 
  FredFalk 3: its place in the industry. However, it 
  FredFalk 3: is our understanding that it will not 
  FredFalk 3: be supported by the major record labels 
  FredFalk 3: for security and quality reasons. 
  Question: please comment on automobile radios and your technology 
  FredFalk 3: We met with two major providers of 
  FredFalk 3: high end car stereos at CES and are 
  FredFalk 3: continuing to work with them to incorporate 
  FredFalk 3: this technology into the automobile. 
  Question: This morning CNBC reported that there will be a big demand
for flash 
  Question: memory. Will that demand create a demand for EDIG's MicroOS
flash memory 
  Question: software? 
  FredFalk 3: Yes, we believe that will create more of 
  FredFalk 3: a demand for our software certainly as 
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  FredFalk 3: the industry continues to use flash memory 
  FredFalk 3: The answer is yes, we believe it will 
  FredFalk 3: create more of a demand for our software. 
  Question: SageCalc: Considering the high risk involved in an OTC
Bulletin Board 
  Question: equity which lacks analytical coverage, why should the
individual 
  Question: investor consider your stock? 
  FredFalk 3: Look at where the emerging industries are 
  FredFalk 3: growing. It's just not e.Digital that sees 
  FredFalk 3: the huge potential for hand held 
  FredFalk 3: digital devices almost every large corporation 
  FredFalk 3: on the planet sees the same future. 
  FredFalk 3: According to Forrester Research, the 
  FredFalk 3: global growth of flash memory devices 
  FredFalk 3: will grow from 4 billion dollars worth 
  FredFalk 3: of devices in 1999 to 8.5 billion in 2001 
  FredFalk 3: Also, with the convergence of voice, 
  FredFalk 3: data, music, still pictures and full motion 
  FredFalk 3: video, numerous companies are interested 
  FredFalk 3: in putting to market single devices 
  FredFalk 3: that incorporate these technologies. 
  FredFalk 3: The days of people carrying a single 
  FredFalk 3: cell phone, pager, organizer, music 
  FredFalk 3: player are going away. Our vision of 
  FredFalk 3: the future of these devices is that we will 
  FredFalk 3: communicate with them via voice rather 
  FredFalk 3: than hand based systems or miniature 
  FredFalk 3: keyboards. These devices will need to 
  FredFalk 3: have larger displays, fewer buttons, and 
  FredFalk 3: be user friendly. We seek to incorporate 
  FredFalk 3: all major emerging technologies for an 
  FredFalk 3: OEM to come to us, build their device 
  FredFalk 3: quickly and get it to market. 
  FredFalk 3: In short, we're in a tremendous growth 
  FredFalk 3: industry. 
  Comment: Thank you for joining us today Mr. Falk! We have been
speaking with Fred 
  Comment: Falk, president & CEO of e.Digital Corporation. Visit
www.edig.com. 
  OnlineHost: "FredFalk 3" has left the room.