/ CORRECTION - e.Digital Announces Record Revenues and Profitable Results for Fiscal Year 2009

SAN DIEGO, CA--(MARKET WIRE)--Jun 16, 2009 -- In the news release, "e.Digital Announces Record Revenues and Profitable Results for Fiscal Year 2009," issued earlier today by e.Digital Corporation (OTC BB:EDIG.OB - News), we are advised by the company that in the first sentence of the first paragraph, the increase percentage compared with the 2008 fiscal year should read 99%, rather than 50% as originally issued. Complete corrected text follows.

e.Digital Announces Record Revenues and Profitable Results for Fiscal Year 2009

SAN DIEGO, CA -- June 16, 2009 -- e.Digital Corporation (OTC BB:EDIG.OB - News), a leading technology innovator of dedicated portable entertainment systems and patented flash memory-related technology, today announced record revenues of $11.1 million for its fiscal year ended March 31, 2009, an increase of 99% over fiscal year 2008 revenues. Revenues for fiscal year 2009 included $10.1 million in licensing fees from the Company's Flash-R(TM) patent portfolio. e.Digital also announced net income attributable to common stockholders for fiscal year 2009 of $2.8 million or $0.01 per diluted share, compared to a net loss attributable to common stockholders of $1.8 million or $(0.01) per diluted share for fiscal year 2008. The $4.6 million improvement was the result of higher margin patent license revenues that offset a decline in eVU(TM) product and service revenues.

"Our substantial investment in pioneering the use of flash memory in portable recording products in the early 1990s, and the associated intellectual property (IP), is being rewarded," commented Fred Falk, president and CEO of e.Digital. "This past fiscal year marked a period of great improvement in our financial results. We recognized our first patent licensing revenues and believe the growing markets for portable electronic products employing flash memory provide many potential licensees for our Flash-R patent portfolio."

Gross profit for fiscal year 2009 was $6.5 million or 59% of revenues, compared to $1.5 million or 28% of revenues for the same period a year ago. The improved gross profit resulted from higher margin patent license revenue. Operating expenses for fiscal year 2009 were $2.8 million, compared to $3.0 million in fiscal year 2008. The decrease resulted from reduced personnel and reassigning certain engineers and technicians to customer support and service roles, offset by increased legal expenses.

The Company improved its balance sheet at March 31, 2009 with working capital of $3.3 million, compared to a working capital deficit of $1.3 million at March 31, 2008. Stockholders' equity improved to $3.3 million, compared to a stockholders' deficit of $1.7 million at the end of fiscal year 2008.

"On the digEcor litigation front, the bulk of the bench trial has been completed and 'proposed findings of fact and conclusions of law' briefs are due in July followed by closing arguments," continued Falk. "The Court is then expected to deliberate before delivering its final rulings on the few remaining issues in the case."

"As we previously discussed throughout the year, our eVU business has been very sluggish due primarily to airline economic headwinds," added Falk. "We've increased our recurring service revenues in calendar 2009 and expect eVU business to pick up this fiscal year. We are seeing a slowly improving outlook in the portable in flight entertainment (IFE) industry and continue to pursue markets outside of IFE in spite of generally risk averse business climates."

Falk concluded, "Having proven the value of our Flash-R patent portfolio by recording record revenues and profits last fiscal year, we look forward to additional legal and licensing activity with new licensee prospects and continued IP-related revenues this fiscal year."

About e.Digital Corporation: e.Digital is a leading innovator of dedicated portable in flight entertainment systems. More than 30 airlines have made dedicated portable systems powered by e.Digital technology their in flight entertainment choice. e.Digital also owns and is monetizing its Flash-R(TM) portfolio of flash memory-related patents. e.Digital was the first company to employ and patent important aspects of the use of removable flash memory in portable recording devices. For more information about e.Digital and eVU, please visit: 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. 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 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.

 
                   e.Digital Corporation and subsidiary
                   Condensed Consolidated Balance Sheet
                  (000's omitted except per share amount)
                                (unaudited)

                                                            March 31,
                                                      ---------------------
                                                        2009       2008
                                                          $          $
ASSETS
    Current
      Cash                                                 3,814       122
      Accounts receivable                                     94       175
      Inventory                                              517       489
      Deposits and prepaid expenses                           26        35
                                                      ---------- ---------
    Total current assets                                   4,451       821
      Property and equipment, net                             27        40
                                                      ---------- ---------
    Total assets                                           4,478       861
                                                      ========== =========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
    Current
      Accounts payable                                       203       836
      Accrued and other                                      590       464
      Term and promissory notes                              381       813
                                                      ---------- ---------
    Total current liabilities                              1,174     2,113
    Long term liabilities                                     24       453
    Stockholders' equity (deficit)                         3,280    (1,705)
                                                      ---------- ---------
    Total liabilities and stockholders' equity
     (deficit)                                             4,478       861
                                                      ========== =========





                   e.Digital Corporation and subsidiary
              Condensed Consolidated Statement of Operations
                  (000's omitted except per share amount)
                                (unaudited)

                                                          For the year
                                                        ended March 31,
                                                      --------------------
                                                         2009      2008
                                                           $         $
Revenues                                                 11,056      5,553
Cost of revenues                                          4,512      4,009
                                                      ---------  ---------
       Gross profit                                       6,544      1,544
Operating expenses:
       Selling and administrative                         2,325      1,980
       Research and development                             519      1,006
                                                      ---------  ---------
Total operating expenses                                  2,844      2,986
                                                      ---------  ---------
Operating income (loss)                                   3,700     (1,442)
Other income (expenses)                                    (344)      (277)
                                                      ---------  ---------
Income (loss) before income taxes                         3,356     (1,719)
Provision for income taxes                                 (422)         -
                                                      ---------  ---------
Income (loss)                                             2,934     (1,719)
Dividends on convertible preferred stock                   (130)       (82)
                                                      ---------  ---------
Income (loss) attributed to common stockholders           2,804     (1,801)
                                                      =========  =========
Income (loss) per common share - basic and diluted         0.01      (0.01)
                                                      =========  =========
Weighted average common shares outstanding
       Basic                                            277,997    252,684
                                                      =========  =========
       Diluted                                          279,144    252,684
                                                      =========  =========

     CONTACT:
     e.Digital Corporation
     Robert Putnam
     (858) 304-3016 ext. 205
     Email Contact