I`ve been away for the last couple of days, and am catching up and trying to make sense of all this. Sinkman and Trillium seem to be close to my thoughts on what is really happening.

First, EDIG`s shareholder alert/PR/SEC filing makes no sense. When reading the stated complaint from digEcor, EDIG`s statement that ``e.Digital believes this action is related to the purchase order we placed in the normal course of our business on November 11, 2005 for 1250 digEplayers(TM) with our contract manufacturer, Maycom Co., Ltd. (``Maycom``)`` is pure BS, or more likely a smokescreen. If they really believe there is some relationship here, they`re idiots. The context of the complaint could in no way relate to a deal with Maycom, directly involving digEcor.

MY take:

There was probably an agreement at one time with APS/Wencor/digEcor that included prohibitions as cited in the complaint - a non-compete in IFE for any business and in use of DRM tech. That agreement/contract may still be in effect (it obviously is from digEcor`s view), or may have been superceded by a subsequent agreement (EDIG`s view). Evidence of these conclusions: for digEcor, the current suit; for EDIG - two things: RP`s insistence that EDIG is free to pursue IFE business independently, and EDIG`s statements that they technically ``worked around`` any impediments as relate to digEcor, permitting EDIG`s independent action.

So what has prompted digEcor to make the complaint at this time? It almost certainly has nothing to do with Maycom - that is a wholly separate matter based on the context of the digEcor complaint - nothing in it mentions failure to deliver or anything like that. Hence my ``smokescreen`` conclusion. So what new IFE business has been announced recently by anybody that would serve as the catalyst for digEcor action RIGHT NOW? The ONLY thing that has come up recent is that Mezzo announcement, which I`ve pasted below:

``Mezzo Movies aims for summer handheld IFE launch

May 16, 2006 – LONDON-based Mezzo Movies is aiming to

launch a handheld-based turnkey IFE service with at

least one airline this summer.

Set up in 2003 by two former executives of Tesco, the

multi-billion-pound British supermarket chain, Mezzo

plans to support low-fare, regional and leisure

carriers who are new to IFE by applying proven best

practice from the retail industry to the supply of

equipment, content and supporting services and the

generation of revenues.

“We know that simply choosing a particular system and

playing films will not guarantee the sort of returns

that are possible,” says CEO Dave Sampson. “By

bringing the best retail practice to onboard

entertainment we can turn what has traditionally been

a cost for airlines into a substantial revenue and

profit stream.”

The company completed a trial of its concept with UK

low-fare carrier easyJet last year (Inflight Online,

February 28, 2005) and has just announced that

Rolls-Royce is to supply it with IFE system

performance and content management software. The

British powerplant giant has also taken a shareholding

in Mezzo, according to Sampson.

“Following our successful proof-of-concept trial with

easyJet last year, we’re now working with a number of

airlines to provide handheld solutions in time for

this summer season,” he says. Mezzo hopes to announce

over the next couple of months further details of its

offering – the handheld device, system architecture,

content suppliers – and the name of the first airline

customer.``

Now, IF (big IF, or is it?) EDIG secured this Mezzo business, via Rolls-Royce (a Wencor-like company), that would be in direct competition with digEcor with a superior offering. That would definitely PO digEcor/Wood, prompting this action in an effort to muck things up for EDIG, whether the agreement on which digEcor is relying is ``alive`` or not.

So, based on what I`ve read, that`s the conclusion I`ve reached. This does suggest that EDIG was not exactly honest in its PR, etc., but they may have had no choice but to use this (Maycom non-sense) as an excuse to avoid violating an NDA with Mezzo.

The only thing that ``upsets`` my theory is the Mezzo-stated trials of the new system with EasyJet last year. That timing may be a little off, but it could have been done with the eVU.

As always, I KNOW nuttin`! But I don`t see too many holes in my theory, and it certainly makes alot more sense than the ``Maycom didn`t deliver`` scenario (digEcor`s suit would have mentioned something relating, but it doesn`t).

SGE