All of us at e.Digital, the engineering staff, officers and directors have great confidence in the present and future of the company. In that regard, on September 12, 2000, I exercised options on 648,316 shares of e.Digital common stock, increasing my holdings to 1,115,000 shares. I incurred substantial alternative minimum tax liability based upon the closing share price on that date ($5.625). I took this action for two reasons: First, I wanted to begin a long-term capital gains holding period. I believe that e.Digital will reward long-term investors. Second, I felt that the share price on that date was attractive given the names of OEMs we are working with and the general time frame of expected announcements.

http://www.findarticles.com/p/articles/mi_m0EIN/is_2000_Oct_30/ai_66430311