e.Digital Reports Fiscal Year 2014 Results

Highlights:

• Continued Flash-R™ licensing success - During fiscal year 2014, the Company entered into 21 license and settlement agreements. 17 of these arrangements are as a result of the original group of lawsuits filed by the Company in late 2012 and early 2013. One additional case was settled in the current fiscal year, with three remaining cases on hold pending the outcome of the collateral estoppel appeal the Company filed with the Federal Circuit Court of Appeals in October of 2013.
  
  
• Additional lawsuits filed - In early December 2013, the Company filed additional lawsuits against manufacturers and suppliers of Flash memory storage devices, including Toshiba, Seagate, Intel, and others. Since January 1, 2014, the Company secured 10 new patent license agreements stemming from the additional lawsuits. These agreements were executed during the last quarter of the Company's fiscal 2014 (ended March 31, 2014) and the current fiscal year's first quarter. These lawsuits assert claim one of the Company's U.S. Patent No. 5,839,108, covering the use of flash memory technologies.
  
  
• Expanded and strengthened the Company's patent portfolio - At March 31, 2014, the Company's intellectual property portfolio included twelve U.S. patents, three continuations and one continuation in part. Efforts are underway to continue to expand the Company's intellectual property roadmap.
  
  
• Nunchi® and microSignet™ marketing - The Company modified its relationship with Handal & Associates ("Handal") to include the marketing and enforcement of the Company's Nunchi and microSignet patent portfolios. The Company's Flash-R litigation has aided in creating an awareness of its intellectual property among household named companies.
  
  

Management Commentary:
"Licensing of our Flash-R patent portfolio continues to be our primary source of revenue resulting in a profit for fiscal 2014," commented Fred Falk, president and CEO of e.Digital. "We have worked closely with Handal to enforce our patents and address the many challenges presented by multiple Flash-R defendants. We expect additional Flash-R licensing revenue in Fiscal 2015.

"We are working with Handal to identify potential licensees and also possible infringers of our Nunchi patents. We are excited about our microSignet security technology due to the increased awareness and need for new security solutions as a result of major corporate security breaches. There are many areas we believe microSignet offers a compelling enhanced security solution. Unlike other security solutions, microSignet utilizes the internal physical characteristics of semiconductor memories, to establish a 'fingerprint' which uniquely identifies a given piece of hardware, such as a smart phone or desktop computer, which can be used for device authentication, or to bind valuable content to a particular device. For a more complete description and video demonstration, we encourage you to please visit the microSignet webpage. We are excited about the industry trends we are seeing in the area of context awareness, and the need for more secure and user friendly online security solutions. We believe our Nunchi and microSignet technologies offer compelling solutions in these rapidly evolving areas," concluded Falk.

Fiscal 2014 Financial Summary:
Revenues totaled $2,280,758 for the fiscal year ended March 31, 2014. Revenues for fiscal year 2014 included $2,045,385 in licensing fees from the Company's Flash-R™ patent portfolio and $235,373 in eVU™ portable in flight entertainment (IFE) sales and services. For the prior year, licensing revenue was $11,669 and eVU revenues were $430,745. During fiscal 2014, the Company licensed 21 companies, and in the prior year had no new patent license agreements.

Operating costs and expenses for fiscal year 2014 were $2.19 million, increased from $1.98 million in fiscal year 2013. The increase is primarily as a result of increased contingent legal fees due to increased current year patent license settlements.

Net income for fiscal year 2014 was $56,084 or $0.00 per diluted share, compared to the net loss of $1.48 million or $(0.01) per diluted share for fiscal 2013.

About e.Digital Corporation: For more than 20 years, e.Digital's ideas and inventions have impacted the evolution of consumer products. Today, e.Digital innovations, including its Flash-R™ portfolio of flash memory-related patents, are essential to many portable consumer electronic products. The Company pioneered dedicated portable in-flight entertainment systems and more than 30 airlines have made e.Digital powered products their in-flight entertainment choice. For more information about e.Digital, please visit: www.edigital.com.

Safe Harbor statement under the Private Securities Litigation Reform of 1995: This press release includes forward-looking information and statements. Except for historical information contained in this release, statements in this release may constitute forward-looking statements regarding assumptions, projections, expectations, targets, intentions or beliefs about future events that are based on management's belief, as well as assumptions made by, and information currently available to, management. While the Company believes that expectations are based upon reasonable assumptions, there can be no assurances that goals and strategy will be realized. Numerous factors, including risks and uncertainties, may affect actual results and may cause results to differ materially from those expressed in forward-looking statements made by the Company or on its behalf. Some of these factors include the substantial uncertainties inherent in pursuing patent enforcement activities including, but not limited to the risks and costs of litigation and support activities, the timing and amount of settlements/licenses if any, the acceptance of existing and future products and technologies, the difficulty of commercializing and protecting new technology such as the Company's Nunchi, microSignet and other technologies, the impact of competitive products, technologies and pricing, general business and economic conditions, and other factors detailed in the Company's Annual Report on Form 10-K and other periodic reports filed with the SEC. Except as required by law, the Company specifically disclaims any obligation to update or revise any forward-looking statement whether as a result of new information, future developments or otherwise.