e.Digital Corporation and subsidiary

Condensed Consolidated Balance Sheets

(000's omitted except per share amounts)

March 31, 2007

March 31, 2006

$

$

ASSETS

Current

Cash and cash equivalents

695

1,059

Accounts receivable

37

                           2

Inventory

309

-

Deposits and prepaid expenses

51

32

Total current assets

1,092

1,093                               

Property and equipment, net

36

                          63

Prepaid transaction costs

629

-

Total assets

1,757

1,156

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current

Accounts payable

687

   261

Accruals and other

281                                

741                                

Customer deposits

119

793                                

Dividends

464

402                                

Convertible term note – current portion

139

-

Secured promissory note

750

-

Unsecured notes, short-term

-

1,016

Convertible subordinated notes

-                             

397

Total current liabilities

2,440

          3,610

Long-term liabilities

754

-  

Stockholders' deficit

(1,437)

(2,454)

Total liabilities and stockholders' deficit

1,757

      1,156