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e.Digital Corporation Reports First Quarter Fiscal 2006 Revenues

Monday August 15, 4:32 pm ET

SAN DIEGO--(BUSINESS WIRE)--Aug. 15, 2005--e.Digital Corporation (OTC:EDIG - News), a leading innovator of proprietary digital technology platforms, today reported revenues for its first fiscal quarter of 2006 ended June 30, 2005 totaled $998,000 compared to $93,000 for first quarter of fiscal 2005 revenues, an increase of 971 percent.

Gross profit for the first three months of fiscal 2006 was $171,000 compared to $69,000 for the first three months of fiscal 2005. While gross margins for the company`s products have averaged approximately 20%, the decrease in gross margin in the first fiscal quarter occurred due to additional costs incurred for the development of platform and product enhancements. The company reported an operating loss of $530,000 for its first fiscal quarter 2006, compared to an operating loss of $705,000 for the same period last year.

Net loss available to common stockholders for the first fiscal quarter of 2006 was $(0.00) per basic diluted share, compared to $(0.00) per basic diluted share for the same period last year.

Also, the company reported it has received purchase orders for approximately $1.6 million, which it expects to ship in the second quarter of fiscal 2006.

``As we outlined in our presentation following our recent annual meeting of shareholders, we are making progress growing revenues and reducing losses,`` said Atul Anandpura, president and chief executive officer of e.Digital Corporation. ``We see a growing market for versions of secure, closed system video products which we are moving to exploit by developing a new digital video/audio technology platform (DVAP) based on further augmentation of our MicroOS(TM) and a powerful new processor.``

The new DVAP will come in the form of a finished product with the following planned features:

High resolution digital LCD

Embedded magnetic card reader

Touch screen capabilities

Internet access

Voice over IP (VOIP)

Full featured graphical user interface

Content security

RFID for tracking and theft control

Access to e.Digital-supplied content

Concluded Anandpura, ``Based on current and emerging DVAP business from the in-flight entertainment, healthcare, cruise line, and car rental markets as well as from kiosk-based businesses desiring to utilize our smaller screen Kino(TM), in fiscal 2006, we expect increased annual revenues and business over fiscal 2005. Most of the anticipated increase in revenues is expected through sales of secure closed system video products based on both new and current versions of our proprietary DVAP to branding customers.``

About e.Digital Corporation: e.Digital Corporation partners with leading, innovative companies, designing and providing manufacturing services for their branded digital video/audio and wireless products based on the Company`s proprietary MicroOS(TM)-enabled technology platforms. e.Digital specializes in the delivery, management, and protection of secure digital content through it`s technology platforms. e.Digital`s services include the licensing of the Company`s MicroOS, custom software and hardware development, industrial design, and manufacturing services through the Company`s manufacturing partners. For more information about e.Digital and its technology platforms, please visit the company website at www.edigital.com.