SAN DIEGO, CA -- (Marketwire) -- 08/13/09 -- e.Digital Corporation (OTCBB: EDIG), a leading technology innovator of dedicated portable entertainment systems and patented flash memory-related technology, today reported fiscal first quarter revenues of $223,000 for the period ended June 30, 2009, compared to revenues of $378,000 for the same period a year ago. Fiscal Q1 revenues were primarily derived from eVU(TM) service contracts as sales activity remained slow in the portable in flight entertainment (IFE) market.

In September 2008, the Company recognized its first Flash-R(TM) patent portfolio licensing revenues and reported licensing revenues of $10.1 million for the fiscal year ended March 31, 2009. The timing and amount of patent licensing revenues has a material impact on quarterly results. No patent license revenue was recognized in the first quarter ended June 30, 2009.

Based on its early licensing success, the Company anticipates further legal and licensing activity, additional patent enforcement actions, and additional IP-related revenues this fiscal year. However, there can be no assurance of the timing or amounts of future license revenues. The Company was the first to develop, employ and patent important technology that initiated the use of flash memory in portable products. The Company is asserting that its flash memory-related intellectual property is being infringed through wide use in many of today's popular consumer products.

Gross profit for fiscal Q1 2010 was $103,000 or 46% of revenues, compared to $114,000 or 30% of revenues for Q1 of the prior year. The improved gross profit percentage resulted from higher margin service revenues, compared to very limited product revenues.

Operating expenses for the three months ended June 30, 2009, were $656,000, compared to $686,000 for the first quarter of the prior year. The Company reported increased litigation-related legal expenses of $157,000, offset by reductions of $126,000 from reduced staffing.

Net loss for the three months ended June 30, 2009 was $570,000 or $(0.00) per share, compared to a net loss of $669,000 or $(0.00) per share for the same period last year. The improvement was the result of reduced operating and other expenses, offset in part by a decline in eVU product revenues.

Commenting on the Company's eVU business, Fred Falk, president and CEO of e.Digital, said, "In spite of difficult market conditions, we are working with airlines on new and follow-on portable IFE orders as well as pursuing non-IFE business. We look forward to showcasing our enhanced eVU entertainment system and meeting with current and prospective customers at the upcoming World Airline Entertainment Association (WAEA) Conference and Exhibition being held in Palm Springs. We also look forward to releasing further business information this quarter."

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 develop, employ and patent important technology that initiated the use of flash memory in portable products. For more information about e.Digital, 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, 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.

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

                                                       June 30,   March 31,
                                                         2009       2009
                                                           $          $
ASSETS
  Current
    Cash                                                   3,074      3,814
    Accounts receivable                                      219         94
    Inventory                                                519        517
    Deposits and prepaid expenses                             31         26
                                                      ---------- ----------
  Total current assets                                     3,843      4,451
    Property and equipment, net                               21         27
                                                      ---------- ----------
  Total assets                                             3,864      4,478
                                                      ========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
  Current
    Accounts payable                                         357        203
    Accrued and other                                        386        590
    Convertible term debt                                    241        381
                                                      ---------- ----------
  Total current liabilities                                  984      1,174
  Long term liabilities                                        8         24
  Stockholders' equity                                     2,872      3,280
                                                      ---------- ----------
  Total liabilities and stockholders' equity (deficit)     3,864      4,478
                                                      ========== ==========




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

                                                      For the three months
                                                         ended June 30,
                                                        2009       2008
                                                          $          $
Revenues                                                    223        378
Cost of revenues                                            121        264
                                                      ---------  ---------
  Gross profit                                              102        114
Operating expenses:
  Selling and administrative                                577        539
  Research and development                                   79        147
                                                      ---------  ---------
Total operating expenses                                    656        686
                                                      ---------  ---------
Operating income (loss)                                    (554)      (572)
Other income (expenses)                                     (15)       (98)
                                                      ---------  ---------
Income (loss) before income taxes                          (569)      (670)
Provision for income taxes                                    -          -
                                                      ---------  ---------
Income (loss)                                              (569)      (670)
Dividends on convertible preferred stock                    (43)        (1)
                                                      ---------  ---------
Income (loss) attributed to common stockholders            (612)      (671)
                                                      =========  =========
Income (loss) per common share - basic and diluted        (0.00)     (0.00)
                                                      =========  =========

Weighted average common shares outstanding              282,507    274,498
                                                      =========  =========