FOR IMMEDIATE RELEASE

FOR IMMEDIATE RELEASE

e.DIGITAL ANNOUNCES SECOND QUARTER RESULTS

(SAN DIEGO, CA, – November 10, 2011) – e.Digital Corporation (OTCBB: EDIG), a leading innovator of dedicated portable entertainment systems and patented flash memory-related technology, today reported financial results for its second quarter of fiscal 2012 ended September 30, 2011.

The Company reported net income of $163,000, or $0.00 per share, for the second quarter of fiscal 2012 compared to a net loss of $272,000 or $(0.00) per share for the prior year’s second quarter. For the second quarter of fiscal 2012 revenues totaled $1.0 million compared to $238,000 for the second quarter of the prior year. The most recent quarter included $0.9 million of patent license revenues compared to none for the second quarter of the prior year. Gross profit for the second quarter, including the positive contribution of licensing margins, was $599,000, 57% of revenues, compared to $89,000, 37% of revenues, for the prior year’s second quarter. Operating expenses declined to $334,500 from $361,000 for the prior year’s comparable quarter primarily due to reduced staffing costs including reduced non-cash stock compensation expense. Quarter-end cash increased to $3,032,000 from $1,806,000 at March 31, 2011.

For the six months ended September 30, 2011 the Company reported net income of $894,000, or $0.00 per share, on revenues of $3.2 million. This is an improvement over the comparable six months of the prior year that had a net loss of $654,000 on revenues of $750,000.

“Higher margin revenue from Flash-R™ licensing allowed us to post a profitable quarter and profitable six months,” said Fred Falk, president and CEO of e.Digital Corporation. Even though the Colorado litigation is now concluded, Flash-R licensing activities continue while our ‘774 and ‘737 patents are in reexamination. We recently signed a licensing agreement without litigation that we believe will contribute to a profitable third fiscal quarter. While the timing and amount of any future licenses may be impacted positively or negatively by the patent reexamination and other factors, we remain optimistic about the revenue potential of our Flash-R portfolio.”

“With regard to the reexamination process, we received and are responding to an office action from the United States Patent and Trademark Office (“USPTO”) on the ‘774 patent. We will likewise respond to the ‘737 office action when received. We are encouraged that one of the outcomes of the reexamination process is that we will have clarity on the language and applications of the patents for future licensing and litigation. We expect the reexamination process to conclude within approximately six months.”

The Company continues to advance the development of its Nunchi™ technology. The Nunchi platform consists of an infrastructure for mobile devices and host servers. Since the Nunchi Server hosts third-party application specific signal processing algorithms, the infrastructure must be thoroughly defined and rigorously tested. In the current quarter, the Nunchi team will gather data to test larger sample groups, focusing on scalability and adaptability to multiple wireless operator networks. In fiscal 2011 the Company filed seven patent applications related to communication networks and digital data distribution and continues to add to its IP portfolio.

(SAN DIEGO, CA, – November 10, 2011) – e.Digital Corporation (OTCBB: EDIG), a leading innovator of dedicated portable entertainment systems and patented flash memory-related technology, today reported financial results for its second quarter of fiscal 2012 ended September 30, 2011.

The Company reported net income of $163,000, or $0.00 per share, for the second quarter of fiscal 2012 compared to a net loss of $272,000 or $(0.00) per share for the prior year’s second quarter. For the second quarter of fiscal 2012 revenues totaled $1.0 million compared to $238,000 for the second quarter of the prior year. The most recent quarter included $0.9 million of patent license revenues compared to none for the second quarter of the prior year. Gross profit for the second quarter, including the positive contribution of licensing margins, was $599,000, 57% of revenues, compared to $89,000, 37% of revenues, for the prior year’s second quarter. Operating expenses declined to $334,500 from $361,000 for the prior year’s comparable quarter primarily due to reduced staffing costs including reduced non-cash stock compensation expense. Quarter-end cash increased to $3,032,000 from $1,806,000 at March 31, 2011.

For the six months ended September 30, 2011 the Company reported net income of $894,000, or $0.00 per share, on revenues of $3.2 million. This is an improvement over the comparable six months of the prior year that had a net loss of $654,000 on revenues of $750,000.

“Higher margin revenue from Flash-R™ licensing allowed us to post a profitable quarter and profitable six months,” said Fred Falk, president and CEO of e.Digital Corporation. Even though the Colorado litigation is now concluded, Flash-R licensing activities continue while our ‘774 and ‘737 patents are in reexamination. We recently signed a licensing agreement without litigation that we believe will contribute to a profitable third fiscal quarter. While the timing and amount of any future licenses may be impacted positively or negatively by the patent reexamination and other factors, we remain optimistic about the revenue potential of our Flash-R portfolio.”

“With regard to the reexamination process, we received and are responding to an office action from the United States Patent and Trademark Office (“USPTO”) on the ‘774 patent. We will likewise respond to the ‘737 office action when received. We are encouraged that one of the outcomes of the reexamination process is that we will have clarity on the language and applications of the patents for future licensing and litigation. We expect the reexamination process to conclude within approximately six months.”

The Company continues to advance the development of its Nunchi™ technology. The Nunchi platform consists of an infrastructure for mobile devices and host servers. Since the Nunchi Server hosts third-party application specific signal processing algorithms, the infrastructure must be thoroughly defined and rigorously tested. In the current quarter, the Nunchi team will gather data to test larger sample groups, focusing on scalability and adaptability to multiple wireless operator networks. In fiscal 2011 the Company filed seven patent applications related to communication networks and digital data distribution and continues to add to its IP portfolio.