e.DIGITAL REPORTS FISCAL Q1 2009 FINANCIAL RESULTS

IP Monetization Efforts Progressing

(SAN DIEGO, CA, – August 14, 2008) – e.Digital Corporation (OTC: EDIG), a leading technology innovator of dedicated portable entertainment systems and patented flash memory-related technology today reported revenues for its fiscal Q1 2009 ended June 30, 2008 totaled $378,000, compared to revenues of $1.3 million for the same period a year ago which included a $760,000 European in-flight entertainment (IFE) order. Fiscal Q1 sales activity slowed substantially due to airline industry economics associated with the significant increase in jet fuel costs.

“After a tough first quarter, we’re seeing the IFE market improve as airlines adjust to higher fuel prices and begin to move ahead with their dedicated portable IFE plans,” remarked Will Blakeley, e.Digital’s president and chief technical officer. “In conjunction with the September World Airline Entertainment Association (WAEA) Conference and Exhibition, we look forward to announcing new customers for our Best in Class eVU™ entertainment system.”

Gross profit for Q1 2009 was $114,000 or 30% of revenues, compared to $246,000 or 19% of revenues. The improved gross margin percentage resulted from a higher percentage of content services and improved unit costing compared to the same period in the prior year. Net loss for the three months ended June 30, 2008 was $669,000 or $(0.00), compared to a net loss of $594,000 or $(0.00) for the same period last year. The increased loss was primarily the result of reduced revenues offset by improved product margins and reduced operating costs.

e.Digital’s senior vice president, Robert Putnam, commented on the Company’s intellectual property (IP) monetization activities, “Through our legal representatives, licensing discussions and legal efforts are ongoing with the companies named in our complaints filed in the U.S. District Court for the Eastern District of Texas.”

“We believe the five patents that comprise our Flash-R™ patent portfolio are fundamental to the use of flash memory in many of today’s popular consumer electronic products that total in the billions of dollars in annual sales,” Putnam continued.

“In anticipation of our September 17, 2008 shareholders meeting, we encourage all shareholders to read the proxy material currently being disseminated through our proxy service and to return their votes as soon as possible,” concluded Putnam. “We look forward to releasing further business information and meeting with shareholders this quarter.”