e.Digital Corporation (OTCMKTS:EDIG) dropped a bombshell to close out the week this week with a surprise filing that has caused the bottom to fall out on shares of its stock. Bankruptcy proceedings can be a rather drawn out process, so it will be interesting to see how far the stock tumbles.
The news appears unexpected because it was just a few months ago when the company sought and was granted a its tenth US Patent stemming from its Nunchi patent portfolio which includes foundational technologies for mobile and fixed devices, cloud computing and adaptive computing which enable devices to function introspectively, adaptively, and anticipatorily, providing new classes of user experiences, new revenue models and adding value to communications. In some applications, these technologies gather sensor and user data from enabled devices. Processing then interprets surroundings, activities, conditions and the social situation of the user, and acts on that intelligence. (Source:PRNewswire)
e.Digital Corporation (OTCMKTS:EDIG) has filed for Chapter 7 bankrupty protection, per an 8-K. For the uninitiated, according to uscourt.gov, a Chapter 7 bankruptcy case does not involve the filing of a plan of repayment as in chapter 13. Instead, the bankruptcy trustee gathers and sells the debtor’s nonexempt assets and uses the proceeds of such assets to pay holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code. Part of the debtor’s property may be subject to liens and mortgages that pledge the property to other creditors. In addition, the Bankruptcy Code will allow the debtor to keep certain “exempt” property; but a trustee will liquidate the debtor’s remaining assets.
From the Filing: On July 6, 2017, after considering all strategic alternatives, e.Digital Corporation, a Delaware Corporation and its wholly-owned California subsidiary by the same name, ceased operations and filed a voluntary petition for relief under provisions of Chapter 7 of Title 11 of the United States Code, 11 U.S.C. §101 et seq. in the United States Bankruptcy Court for the District of Delaware and the State of California. A Chapter 7 trustee will be appointed by the Bankruptcy Court and will assume control. The assets of the Company will be liquidated and claims paid in accordance with applicable laws.
In connection with the Company’s voluntary assignment in bankruptcy, a trustee will assume control over the assets and liabilities of the Company, effectively eliminating the authority and powers of the Board of Directors of the Company and its executive officers to act on behalf of the Company. Accordingly, on July 6, 2017, Allen Cocumelli, Russell H. Packer, Donald S. Springer and Renee Warden resigned from their positions as directors of the Company. The resignations are not the result of any disagreement with the Company regarding the Company’s operations, policies, practices, but are because of the voluntary assignment in bankruptcy. The executive officers of the Company ceased to be officers and employees of the Company, effective July 6, 2017. (Source: EDGAR Filing)
So it would appear that despite it seeming as if the company was on the right track not too long ago, proceeding with the development of their Nunchi portfolio, that, and all of the company’s other assets will be up for sale. As we said, purely for curiosities sake, we will be interested to see how the proceedings play out for the stock itself which is presently in a freefall. We’ll stay up on any changes to the story here and pass them along to our readers. Stay locked on StreetRegister.com and be sure you’re signed up for our 100% free smallcap newsletter. Simply submit your primary active email address in the box below. Subscribe now!
Disclosure: No one at Street Register has been compensated in any way for the publishing of this article, nor do we hold any position in EDIG stock, short or long.