Just trying to figure out what may have happened with the advanced payments recorded going into the last quarter. The one where they reported; ``The company also reported $0.967 million in advance payments (customer deposits) at December 31, 2004.`` Reported on Feb. 14th.

On tuesday May 3

``The company also reported it has more than $1.2 million in a combination of orders and advance payments (customer deposits) to date in fiscal 2006.

Thats an increase of aproximately 250k during the quarter but with only about 500k (+200k from F10) in revenues resulting from digeplayer sales (presumably) Those 500k in sales would have had 250K in deposits. Ergo the carrover of advanced payments was only 717k (967k - 250k) If you take into account the impact of delayed manufacturing as a result of Jetsgo and Ryan air inventories backlogging production and cycling into sales to new airlines it significantly effects the revenue picture.

From the following 2 PR`s you can see that aproximately 1200 Digeplayers were returned to APS Wencor. The number I use as an estimated cost basis for manufacturing and margin paid to EDIG is $600 / unit. That means that a 50% deposit on those units is $300 or $360k. Since these units were apparently cycled into the inventories and into the hands of new airlines one way of measuringing progress in leu of the receint update is to subtract the $360k from the $717k leaving $357k, meaning that the 1.2 k reported this Q effectively represents an additional 847k in new deposits. (1.2m - 357k)

The point of this exercise is to use the information provided and demonstrate that progress is indeed being made in spite of the disapointing guidance. I think this exercise, as unorthodox as it may seem, actually demonstrates that.

(SAN DIEGO, CA., May 27, 2004) – e.Digital Corporation (OTC: EDIG) today announced that Jetsgo, a Canadian airline offering air service to 17 Canadian and seven U.S. destinations, has placed an initial order for 1,000 units of APS’ digEplayer 5500™.

Ryanair, Europe’s Number 1 low fare airline, will introduce APS’ digEPlayer 5500™ on five of its Stansted, England based aircraft starting November 1. (30 / aircraft + 50% logistics factor)

Larry