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Tinroad

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Tinroad

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Re: None

Saturday, 05/19/2001 10:40:43 AM

Saturday, May 19, 2001 10:40:43 AM

Post# of 93814
Sentinel's conversation with Robert Putnam (5/18/01)

I spoke with Robert for about 20 minutes earlier this evening (about 6:30 PST). I had emailed him questions yesterday and asked him to call me, so we could discuss them. The quasi-transcript below is a general recap of my questions, and my interpretation of his answers. The words are my own, but I believe they are faithful to the essence of his answers. I have underlined items which I have not seen brought up before, or which are new to me. To any who question of parts of this post, I will only say that the best way to get the most accurate answers is to call Robert yourself, and I suggest you do so. On the whole, I was very encouraged by the conversation.

Q: When might we hear more about the Platinum/e.Digital relationship?
We should see an announcement of EDIG's formal relationship with Platinum this quarter. EDIG has had a lot of communication with Platinum. They took a little longer than expected to integrate Lanier into the corporate structure, but that integration is complete now. They are waiting for some event (Robert couldn't comment on it's nature) before a public announcement is made, but he believes it will be made this quarter.

Q: Are Cquence units still being shipped?
Lanier continues to ship and RP saw no reason at present that this might change.

Q: If AMIS is for Audio Interface management, is there a Video Interface counterpart?
There is a Video counterpart to AMIS to be announced at some point in the future.

Q: Are there new patents pending or applied for?
They are working on multiple new platform technologies with multiple OEM's, and whenever they are able to work out which parts of the development are rightfully the customer's (who paid for cetain services), and which parts are solely EDIG's, they apply for additional patents. This is a continuous process for all development, so he couldn't really comment on the statuts of specific technologies in relation to the patent application process.

Q: What is the status of the Technical Advisory Group?
Status of TAG still undisclosed other than to say that Mr. Cocumelli is spearheading that effort. He said that there are some outside "potential" members of this group working in what might be an official capacity, but there has been nothing announced and nor did he project when there might be.

Q: Not owning a cell phone, or knowing what somebody might want on one, in addition to being able to make a call, I asked what types of cell phone accesories they might be involved with.
He would only say that they were working on a "peripheral" and that there were voice and music applications that could be developed in conjunction with certain established platforms, for both business and personal use.

Q: What type of work does EDIG do with set top boxes?
EDIG is mainly involved in the interface between the box and the handheld device. I would imagine this is where TWIRL would come in, but I didn't think fast enough to ask.. EDIG is currently taking advantage of "significant opportunities" in this area

Q: When wil we hear bout the third Big 3 company?
A lot of work has been done with the #3 of the Big 3, and all he could say was timeframe for public disclosure was up to them.

Q: What is the status of the oportunity to bundle music players with PC's?
Bundling music players with PC's is still a very real possibility. He said that all these companies are after the same thing, which is getting their hooks into the consumer to keep them as customers as PC sales dwindle. One way to do that is to provide branded "bundled" devices as a mobile "aftermarket presence" which might require upgrades, etc. The pain the PC makers are experiencing actually bodes well for EDIG and other small device makers/designers. He said that everything is "predicated on pent up demand"

Q: What is the staus of embedding the MicroOS in silicon?
As far as embedding is concerned, the goal of the business plan has always been to not develop a full scale OS solution for OEM's to "buy off the shelf", but rather, to provide a kernel of EDIG technology (MicroOS typically) within the chipset as a "developer tool", in order to let developers play with it a bit and eventually come to EDIG for customization within specific products applications. There has been significant progress made toward this goal and he believes they are close to being able to disclose the work they have done in this area. As always though, it is up to the OEM to release EDIG for disclosure and timeframes cannot be guaranteed.

Q: With delays in Hy-Tek's Treo delivery schedule, will there still be JB's on the market this quarter?
EDIG still believes a devices based on the jukebox platform will be available to consumers this quarter. It wouldn't be out of the realm of possibility that the folks at Hy-Tek were jsut trying to gain some breathing room after being pestered to death (my phrase, not his, and which they admittedly asked for by giving aggressive dates) over there previous delivery projections.

Q: Will other JB devices possibly beat Hy-Tek to market?
He said that he expected EASTECH to weigh in as the big gun in jukebox introduction. He said EASTECH's big, Hango is big, and that there are other, unannounced manufacturers which also had significant capacity that EDIG was working with. He wouldn't commit to a timeframe for an announcement thereof.

Q: Are the content announcements we've been seeing the kind that make OEM's want to rush to market?
The content announcements we've been seeing are very encouraging, and it's a matter of when, not if, this industry really starts to move, but right now, there is still no indication of such vital direction as to which codecs, or business models, will prevail. The Labels talk about subscription services and general timelines, but there are no real details and things are just bit vague yet. The industry is being born before our eyes, but OEM's are moving cautiously. Still, Summer markets will see devices launched, and more will come throughout the year.

Q: Is there a working prototype of the voice controlled jukebox? Schedule for delivery?
The voice controlled jukebox is still in very active development, with EDIG's scope of work on track to be finished by the end of the year. However, the OEM's they are working with may well decide to push launching of this product off into the last half of 2002. It is up to the OEM's.

Q: Will there be announcements this quarter of the other technlogy platforms that EDIG is working on?
RP believes that there will be at least one announcement this quarter of the additional technology platforms mentioned in Fred Falk's last letter, and that these announcements will continue throughout the year.

Q: How big is DataPlay for EDIG, what kind of role do we play, and do they send OEM's to EDIG?
DataPlay is a VERY significant growth driver, and is currently a source for additional OEM's, as they send customers to EDIG much in the same way that Texas Instruments, etc. does. (Here is the best part...) In fact, EDIG is currently the ONLY integrator of DataPlay technology available to third parties with no qualified engineering staffs of their own, and may even have proprietary technology which will prove essential to the majority of future DataPlay device integration. This remains to be seen, and there is always the possibility of future technologies displacing EDIG's. Until then however, EDIG seems VERY well positioned to take advantage of DataPlay's potential success. DataPlay itself is the determining factor in the rollout of their technology and so far they are on track to be able to deliver optical engines as planned, and to launch consumer product in the Fall of 2001.

Q: Is VTT/TTV still set to be the big revenue source for EDIG, or will digital music/video surpass it?
VTT/TTV is still expected to be a major revenue source for EDIG, but that is more long term. Robert mentioned that he has seen a "surge" within the industry to gravitate toward voice control and that a lot depends on the outcome of the LHSP situation. He said that when they start to sell off LHSP's technology, there will be a battle for acquisition of it. Robert said that though EDIG remained "IBM-centric", they were working with another voice technology company, and that the voice activated jukebox will be the first example of that collaboration. Digital music and video, along with other applications, will be revenue generators for the near term and beyond.

Q: What has Fleishman Hillard been doing? What are they expected to do?
Fleishman-Hillard has been VERY busy. In fact, he said that they have gotten more effective exposure from F-H in the few weeks since they've been onboard than they got through all the other PR efforts in the history of the company combined. (Granted there wasn't all that much to "PR" about early on, but he was very high on the efforts of F-H). F-H has the task of "educating the industry about EDIG". To this end, they have already spoken with numerous industry analysts, and he mentioned Jupiter, Forrester and Cahners Instat. This was news to me in that I believed F-H was around to facilitate media reviews and to obtain manistream media exposure. This is even better because when major announcements are made public, these analysts are already familiar with EDIG technology and capabilities, and are able to speak intelligently about them to the press, and whoever else might inquire about them. LOL...Thus we avoid the Jim Seymour syndrome. He said that jukebox platforms have been distributed to media reviewers already and that F-H does work with them as well. He was very upbeat about F-H and spoke about how convenient it was to have such a local global powerhouse.

Q: What is the current burn rate?
Current burn rate is currently $275-300K

Q: What is the current employee count?
There are currently 33 employees, of which 24 are engineers (one was hired last week and 2 positions still need filling). Additionally, there are 4-5 part timers who do things like testing, etc.

Q: Is e.Digital considering expansion?
EDIG is only starting to consider the possibility of expanding their offices, but they have an option on 4800 SF of space "right on the other side of the wall" in the same building, so if they want to do it, it's no big deal.

Q: Could we please have the transcript of Fred falk's shareholder address put back up on the website?
They are considering an "Archive" section being added to the website to store past event items like Fred Falk's shareholders' meeting address. Wendy will be in charge of that.

Q: Is Robert Putnam full time for EDIG, or does he still divide his attnetions?
Robert Putnam is still technically serving both EDIG and ATCO, and is reported as doing such in the SEC filings. BUT, if you measure a "full time" position by a 40 hour work week, then he is "full time" for EDIG. He said that most EDIG employees put in much more than 40 hours a week and he is in that group.

http://ragingbull.lycos.com/mboard/boards.cgi?board=EDIG&read=680868 (part 1)
http://ragingbull.lycos.com/mboard/boards.cgi?board=EDIG&read=680869 (part 2)
http://ragingbull.lycos.com/mboard/boards.cgi?board=EDIG&read=680879 (part 3)
http://ragingbull.lycos.com/mboard/boards.cgi?board=EDIG&read=680888 (part 4)
http://ragingbull.lycos.com/mboard/boards.cgi?board=EDIG&read=680890 (part 5)
http://ragingbull.lycos.com/mboard/boards.cgi?board=EDIG&read=680891 (part 6)
http://ragingbull.lycos.com/mboard/boards.cgi?board=EDIG&read=680892 (part 7)
http://ragingbull.lycos.com/mboard/boards.cgi?board=EDIG&read=680893 (part 8)

Always tell the truth. Then you'll never have to remember what you said the last time.

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