e.DIGITAL ANNOUNCES LICENSE AND

SETTLEMENT AGREEMENT WITH TEAC

(SAN DIEGO, CA, – February 28, 2011) – e.Digital Corporation (OTC: EDIG),

a leading innovator of dedicated portable entertainment systems and patented flash memory-related technology, announced today that it has entered into a license and settlement agreement with TEAC America, Inc. (TEAC). Under the terms of the confidential agreement, TEAC obtained a license and release on the Company’s Flash-R™ patent portfolio and paid e.Digital a one-time licensing fee.

e.Digital’s Flash-R patent portfolio is comprised of fundamental technology related to 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 electronics products that utilize flash memory including cell phones, digital cameras, camcorders, PDAs and other popular devices.

"We are pleased to have entered into our 11th Flash-R portfolio related licensing and settlement agreement,” said Fred Falk, president and CEO of e.Digital.