e.digital CORPORATION FILES FORM 8-K

REGARDING Digecor COMPLAINT

Update Regarding Complaint, eVU™ Business Developments,

and Efforts to Monetize Flash Memory-Related Patent Portfolio

to be Released this Month

(SAN DIEGO, CA, May 17, 2006) – e.Digital Corporation (OTC: EDIG), a leading innovator of proprietary flash memory management and secure digital video technology, today filed a Current Report on Form 8-K with the Securities and Exchange Commission regarding a complaint filed against it and certain of its officers and employees by digEcor, Inc. Following (in italics), is the body of the Form 8-K filed today:

On May 12, 2006, we became aware of a complaint filed on May 4, 2006 against e.Digital Corporation (“e.Digital”) and certain of our officers and employees by digEcor, Inc., (“digEcor”) in the Third Judicial District Court of Utah, County of Salt Lake. The complaint was sent to our registered agent in Delaware on May 5, 2006 and received by them on May 8, 2006. Our registered agent sent the complaint to our corporate offices by regular mail on May 9, 2006 and we subsequently received the complaint which alleges breaches of contract, unjust enrichment, breaches of good faith and fair dealing, fraud, negligent misrepresentation, and interference with prospective economic relations. digEcor is seeking, among other things, an injunction to prevent e.Digital from selling or licensing certain digital rights management (DRM) technology “to any other party besides digEcor” and “from engaging in any competition with digEcor until after 2009.” digEcor is also seeking “actual damages” of $793,750 and “consequential damages...not less than an additional $1,000,000.” 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™ with our contract manufacturer, Maycom Co., Ltd. (“Maycom”). Maycom was paid progress payments with final payments made in full for the order by e.Digital, and directly by digEcor, in March 2006.

Maycom has fulfilled orders for digEplayers since 2003, and has fulfilled orders for other products manufactured for e.Digital and its customers since 2000. On March 20, 2006 we became aware of information indicating that Maycom may be unwilling or unable to complete the purchase order for product intended for delivery to digEcor. We are also aware that an agent of digEcor made an onsite inspection of order progress at Maycom’s factory in January 2006 prior to final progress payments being made and that digEcor has had direct verbal and e-mail contact with Maycom.

We expect Maycom to fulfill their obligation under the purchase order and we have initiated legal remedies in Korea to compel its performance. We have received recent verbal and e-mail assurances from Maycom that they intend to perform under the purchase order. We believe there are alternative suppliers that may be able to complete the order if Maycom is unable to do so. We continue to investigate if any third parties have interfered with our business relationship with Maycom.

We are unable to determine at this time the impact this complaint and matter may have on our financial position or results of operations if Maycom does not timely fulfill its obligation to us and we are unable to deliver product to digEcor in a timely manner. We have not recognized any revenue or costs related to products associated with this order, as we only recognize revenues and associated costs when products are delivered to and accepted by our customers. We have approximately $600,000 in deposits to Maycom as a current asset and approximately $790,000 of deposits from digEcor as a current liability related to the digEplayers associated with this order. Our deposits with Maycom may be impaired and we could be obligated to digEcor for their deposits to us if product is not delivered. We intend to seek restitution from Maycom for any damages we may incur from this matter and the digEcor complaint.

e.Digital and certain of our officers and employees intend to vigorously defend against the claims made in the complaint. e.Digital is also considering other appropriate legal action which may include the filing of a cross complaint.

This month, e.Digital will issue an update regarding this matter, eVU™ business developments, its efforts to monetize its wholly-owned flash memory-related patent portfolio, and other company developments.

About e.Digital Corporation:. e.Digital Corporation specializes in the delivery, management, and protection of secure digital content through its proprietary technology platforms. Through customer and partnering relationships, e.Digital is a provider of secure portable Video on Demand products. e.Digital’s services include the licensing of the Company’s MicroOS™, Content Mark-Up Language (CML) application, patent-pending hardware security technology, Digital Rights Management (DRM) solutions, and video display software applications. In addition, e.Digital partners with leading, innovative companies, designing and providing manufacturing services for products employing the Company’s proprietary digital technology platforms. For more information about e.Digital and its technology platforms, please visit the company website at www.edigital.com.

Safe Harbor statement under the Private Securities Litigation Reform of 1995: All statements made in this document, other than statements of historical fact, are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act. You should not place undue reliance on these statements. We base these statements on particular assumptions that we have made in light of our industry experience, the stage of product and market development, expected future developments and other factors that we believe are appropriate under the circumstances. These forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about the businesses of the Company and the industries and markets in which the company operates. These statements are not guarantees of future performance and involve risks, uncertainties that could cause actual results to differ materially from those suggested in the forward-looking statements, including but not limited to the Company’s ability to finance its operations, favorably resolve the complaint filed by digEcor, Inc. against the Company and certain of its officers and employees, sell its products, implement a turnkey financial, product, and maintenance solution, manufacture and ship orders in a timely manner, secure additional business, and other risks identified and discussed in our filings with the Securities and Exchange Commission (“SEC”). Actual outcomes and results may differ materially from what is expressed or implied by the forward-looking statements. More information about potential factors that could affect the Company can be found in its most recent Form 10-K, Form 10-Q and other reports and statements filed with the Securities and Exchange Commission (“SEC”). e.Digital Corporation disclaims any intent or obligation to update these or any forward-looking statements, except as otherwise specifically stated by it.

Note: eVU and MicroOS are trademarks of e.Digital Corporation. All other company, product, and service names are the property of their respective owners.

CONTACT:

e.Digital Corporation: Robert Putnam, (858) 679-1504 ext. 205, rputnam@edigital.com