e.Digital also announced today that it has commenced pilot deliveries of its new, proprietary eVU(TM) mobile entertainment product to companies in the healthcare and travel and leisure industries (please view the following link of the Med-eVU(TM) version of the product: www.edigital.com/evu.htm). Based on e.Digital`s proprietary digital video technology, eVU features razor-sharp images on its 7`` high resolution LCD screen, superb audio fidelity, dual stereo headphone jacks, embedded credit card reader/processor, touch screen capabilities, bright full featured graphical user interface, e.Digital`s patent-pending hardware security technology, 10+ hours of high resolution video playback on a single battery charge, and other important features.

``We are very pleased with initial feedback from companies evaluating our eVU mobile entertainment devices and turnkey entertainment services business,`` said Will Blakeley, e.Digital`s president and chief technical officer. ``We have developed logistic and secure content solutions to enable customers to rapidly deploy, operate and maintain eVUs for their customers/passengers/patients.

``Based on this response, and the U.S. and international companies we are working with, we believe we can grow our revenues and improve margins in future periods,`` commented Blakeley. ``As our new turnkey entertainment services solution is fully implemented, we expect to capture more margin on each product sale and collect monthly revenues from content and other services. More importantly, we believe we can become profitable with annual sales of eVU units totaling approximately half of the 8,000+ e.Digital-powered IFE units currently in the field.

``The markets addressed by the companies we are working with, will complement our IFE business, but with improved margins and fewer logistic, financial and competitive challenges,`` added Blakeley. ``We expect to announce first eVU orders this quarter and more throughout this calendar year.``

e.Digital further announced today that it has initiated efforts to partner with an intellectual property management company to jointly pursue monetizing the company`s patent portfolio.

``With the proliferation of flash memory based products and the increasing recording capacity of flash, we believe our patent holdings in this area are fundamental and valuable, particularly in the areas of content file management, optimal flash memory management, and in removable flash applications,`` concluded Blakeley. ``With the assistance of an intellectual property management partner, our strategy is to aggressively pursue licensing agreements with companies we believe have products utilizing our intellectual property.``