e.Digital Corporation (OTCBB: EDIG), a leading innovator of dedicated portable entertainment systems and patented flash memory-related technology, announced today that it has entered into a royalty bearing license and settlement agreement with TIC Computer, Inc. doing business as Wolverine Data (Wolverine). Under the terms of the confidential agreement, Wolverine has agreed to make an undisclosed lump sum payment for past infringing sales and to pay a royalty for any on-going sales of products that practice e.Digital's U.S. Patent 5,491,774 ('774).

e.Digital's '774 patent is fundamental to the Company's Flash-R(TM) patent portfolio that covers certain aspects of the use of flash memory in the large and growing portable electronic products market. The Company introduced the first portable recorder with removable flash memory in 1993 and believes its patent portfolio to be essential to many consumer electronic products that utilize flash memory including cell phones, digital cameras, camcorders, PDAs and other popular devices. To date, eight companies have entered into Flash-R-related license and settlement agreements.

"We are pleased to announce our first royalty bearing '774 license agreement and the first settlement from our recently filed round of infringement actions," commented Fred Falk, president and CEO of e.Digital. "We expect further legal and licensing activity 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 develop, patent, and productize fundamental techniques that opened the door to the widespread use of flash memory in many of today's popular electronic 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.

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