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Technology Stocks : e.Digital Corporation(EDIG) - Embedded Digital Technology -- Ignore unavailable to you. Want to Upgrade?

To: MaryinRed who wrote (8253)	11/1/1999 1:34:00 AM
From: bob	Read Replies (1) \| Respond to of 18366

Incredibly ignorant response from Advisor.com to Bob Putnam's latest statements. What a wet rag this organization is... I hope EDIG puts them on IGNORE as they aren't worthy of a response. By: Dawson123 Reply To: None Monday, 1 Nov 1999 at 12:55 AM EST Post # of 89336 The Advisor.com Alert...still bashing (email) This arrived at 12:40 AM. 3) The management of e.Digital responded to our buy-side research in which we gave them an AVOID rating. We have updated our coverage on the hottest penny stock company in the market today. See our report at the-adviser.com ------------------ Went to the site and here is what they are posting: ------------------ e.Digital- Play it Again Robert Independent Buy-Side Research By The-Adviser.com - Monday, 11/1/99 (Analyst is MD Porcelain) - New York - Last week, we introduced e.Digital, one of the hottest penny stock stories around. The story continues as management decided to finally respond to the various inquires sent to their office. It seems that management did not like our AVOID rating on the stock. They also believed we didn't give them a fair chance to respond or clarify items as it pertains to our research. It took almost a week and three separate responses, but management has provided certain clarifications to us that we are happy share. 1) We had some poor information in our original research. It seems we got the name of their new Board of Directors member incorrectly. The name of the Intel manager of marketing audio applications who recently joined the Board of e.Digital is Mr. Walter "Skip" Matthews. We reported it as Mathews Walter. Management also clarified that e.Digital was to delivery prototype products to Intel. We had it incorrectly reversed. 2) Management indicated that their technology was more than just "flash-memory." They felt a better way to describe the Company was that it was involved in the file management of flash-memory-based portable devices. They indicated that their "patented MicroOS technology allows portable products to connect to PC?s and the Internet, to download data and manage that data on the portable device and record, play, insert, edit, and/or delete the data/voice/music using simple commands." 3) We originally reported that the Intel prototypes that were supposed to be delivered were delayed nor was the scope of the contract been extended. Management has confirmed to us that although they have made "substantial progress," the introduction of new technology and other OEM's have caused delivery delays. They refused to provide us or their shareholders any other information including whether or not the prototypes would ever be delivered or what the technology issues are. Intel has only spent $39,000 on this effort. If this is substantial progress, we wonder what major delays would be. 4) We originally reported that there is no formal agreement or relationship with Lucent nor is one pending. Management has confirmed that there is no formal co-marketing or revenue sharing agreement between Lucent and e.Digital. Based on our discussions with Lucent, none are currently planned and Lucent will continue to work with several vendors in the audio arena. 5) We originally reported that the Company has no legal rights to any inventions or patents developed by Elwood Norris, the current Chairmen, former CEO and inventor of the Company's digital technology. Management confirmed that they do not have access to all of Mr. Norris's future developments and patents if they do not relate to their current product line. 6) We originally reported that Elwood Norris has registered to sell almost 50% of his stock holdings. Management confirmed but clarified that shares underlined unregistered warrants and that they still bear a control legend from the transfer agent that can only be removed under a reported 144 transaction. Watch out for the Form 144 filing. 7) In further conversation, we inquired as to why senior management continues to sell shares. Management indicated that because of Alternative Minimum Tax Reasons they sold small amounts of shares (at high prices) to buy exercise options (as opposed to buy shares) at lower prices. In other words, we believed that the total value of those shares bought is much less than the total value of the shares sold. Management refused to reconcile and confirm the difference. We called that cashing out and is something early investors in e.Digital ought to consider. 7) Finally, we reported that the Lanier purchase order is non-binding to Lanier. Our contact and management has confirmed to us that the $3 million is not owed to e.Digital. If Lanier can't sell the product, e.Digital receives nothing. With only $15,000 worth of sales, we can't wait to see e.Digital's next SEC filing. Conclusion Not one major company has invested in the Company. Funding has been through private placements and convertible subordinated debt offerings at below market prices. Management continues to sell shares and the guy who invented the technology is retiring. With that in mind, we would AVOID this stock. We have (and had) no positions in this stock and plan to take no positions (long or short) in this stock. If you like the technology - consider Lucent. e.Digital reminds us of the Spectrum story from the early 1990's. John Scully, a former senior executive of Pepsi and Apple was so impressed with the potential of the Company's wireless computing technology that he joined the Company. The minute he signed, management began selling shares, there was an SEC investigation which was followed by more than one lawsuit. We are not saying that e.Digital has much in common with Spectrum. There are differences. Spectrum had significant revenue. e.Digital has none.