e.DIGITAL ANNOUNCES Q2 2009 FINANCIAL RESULTS

Company Records First Flash-R™ Patent Portfolio Licensing Revenue

(SAN DIEGO, CA, – November 14, 2008) – e.Digital Corporation (OTC: EDIG), a leading technology innovator of dedicated portable entertainment systems and patented flash memory-related technology today announced revenues for fiscal Q2 2009 ended September 30, 2008 totaled $1.8 million, compared to revenues of $2.3 million for fiscal Q2 2008. Q2 2009 revenues included $1.6 million in licensing fees from the Company’s Flash-R™ patent portfolio and Q2 2008 revenues included $2.1 million of eVU™ in-flight entertainment (IFE) systems and support equipment.

“eVU sales activity remained extremely slow during the second quarter due to airline economics and industry credit concerns resulting in air carriers curtailing expansion and new projects,” commented Will Blakeley, e.Digital’s president and chief technical officer. “With the cost of fuel coming down and the credit markets showing signs of easing, we’re experiencing renewed interest from our current airline customers on expanding their eVU offerings. Also, a growing number of prospective international air carrier customers are requesting pricing proposals for our dedicated portable IFE passenger entertainment systems.”

Gross profit for Q2 2009 was $1.2 million or 65% of revenues, compared to $597,000 or 26% of revenues for the same period a year ago. The improved gross profit percentage resulted from higher margin patent license revenue.

Operating expenses for Q2 2009 were $757,000, an increase of 10% from $688,000 in Q2 2008. Legal expenses and costs associated with holding the Company’s September shareholders meeting were primarily responsible for the increase. <>

Operating income for Q2 2009 was $400,000 compared to an operating loss of $91,000 in the prior year’s Q2. The $491,000 improvement in operating income was attributable to the patent license revenue recorded in the second fiscal quarter.

Non-cash expenses related to warrant revaluations of a net $124,000, foreign tax expense of $264,000, and non-cash deemed accrued dividends on preferred stock of $43,000 contributed to the loss attributable to common stockholders of $72,000 or $(0.00) per share for Q2 2009. This compares to a loss attributable to common stockholders of $185,000 or $(0.00) per share for the same period last year.

Revenues for the first six months of fiscal 2009 were $2.2 million, compared to $3.6 million for the same six months in fiscal 2008. The revenue mix was different in the most recent six-month period due to initial patent license revenue and reduced eVU sales.

Gross profit for the first six months of fiscal 2009 was $1.3 million or 59% of revenues, compared to $844,000 or 23% of revenues for the same period a year ago. The improved gross profit percentage resulted from higher margin patent license revenue.

Operating expenses for the first six months of fiscal 2009 were $1.4 million, basically unchanged from $1.4 million for the first six months of fiscal 2008. Operating loss was $171,000 for the first six months of fiscal 2009 compared to an operating loss of $596,000 for the first six months of the prior year. The significant reduction in operating loss was attributable to the patent license revenue recorded in the second fiscal quarter.

Net other or non-operating expenses of $263,000 for the most recent six months included a non-cash warrant revaluation of $177,000 and $44,000 of non-cash interest expense. These amounts, plus the $264,000 foreign tax expense and non-cash deemed and accrued dividends of $45,000 contributed to the loss attributable to common stockholders for the first six months of fiscal 2009 of $743,000 or $(0.00) per share. This compares to a loss attributable to common stockholders of $806,000 or $(0.00) per share for the same period last year.

“We’re pleased our initial licensing discussions and legal efforts have produced the first revenue from our Flash-R patent portfolio,” remarked Robert Putnam, e.Digital’s senior vice president. “With this early validation of what we believe to be fundamental patents relating to the use of flash memory in many of today’s popular consumer electronic products, we expect to record further licensing revenues during fiscal 2009 and expand our licensing and legal efforts.”