The operating loss last quarter was $530K on revenues of $998K. Had they generated the $1.6 mil last quarter that might have cut it dramatically. The 20% margins should be maintained but the additional costs of R&D will likely be different this quarter, so it is hard to tell how the accountants will work it but the numbers are moving in the right direction.

(SAN DIEGO, CA, – August 15, 2005) – e.Digital Corporation (OTC: EDIG), a leading innovator of proprietary digital technology platforms, today reported revenues for its first fiscal quarter of 2006 ended June 30, 2005 totaled $998,000 compared to $93,000 for first quarter of fiscal 2005 revenues, an increase of 971 percent.

Gross profit for the first three months of fiscal 2006 was $171,000 compared to $69,000 for the first three months of fiscal 2005. While gross margins for the company’s products have averaged approximately 20%, the decrease in gross margin in the first fiscal quarter occurred due to additional costs incurred for the development of platform and product enhancements. The company reported an operating loss of $530,000 for its first fiscal quarter 2006, compared to an operating loss of $705,000 for the same period last year.