e.Digital Reports Fiscal Q1 2010 Financial Results

SAN DIEGO, CA--(Marketwire - August 13, 2009) - e.Digital Corporation (OTCBB: EDIG), a
leading technology innovator of dedicated portable entertainment systems
and patented flash memory-related technology, today reported fiscal first
quarter revenues of $223,000 for the period ended June 30, 2009, compared
to revenues of $378,000 for the same period a year ago. Fiscal Q1 revenues
were primarily derived from eVUT service contracts as sales activity
remained slow in the portable in flight entertainment (IFE) market.

In September 2008, the Company recognized its first Flash-RT patent
portfolio licensing revenues and reported licensing revenues of $10.1
million for the fiscal year ended March 31, 2009. The timing and amount of
patent licensing revenues has a material impact on quarterly results. No
patent license revenue was recognized in the first quarter ended June 30,
2009.

Based on its early licensing success, the Company anticipates further legal
and licensing activity, additional patent enforcement actions, and
additional IP-related revenues this fiscal year. However, there can be no
assurance of the timing or amounts of future license revenues. The Company
was the first to develop, employ and patent important technology that
initiated the use of flash memory in portable products. The Company is
asserting that its flash memory-related intellectual property is being
infringed through wide use in many of today's popular consumer products.

Gross profit for fiscal Q1 2010 was $103,000 or 46% of revenues, compared
to $114,000 or 30% of revenues for Q1 of the prior year. The improved gross
profit percentage resulted from higher margin service revenues, compared to
very limited product revenues.

Operating expenses for the three months ended June 30, 2009, were $656,000,
compared to $686,000 for the first quarter of the prior year. The Company
reported increased litigation-related legal expenses of $157,000, offset by
reductions of $126,000 from reduced staffing.

Net loss for the three months ended June 30, 2009 was $570,000 or $(0.00)
per share, compared to a net loss of $669,000 or $(0.00) per share for the
same period last year. The improvement was the result of reduced operating
and other expenses, offset in part by a decline in eVU product revenues.

Commenting on the Company's eVU business, Fred Falk, president and CEO of
e.Digital, said, "In spite of difficult market conditions, we are working
with airlines on new and follow-on portable IFE orders as well as pursuing
non-IFE business. We look forward to showcasing our enhanced eVU
entertainment system and meeting with current and prospective customers at
the upcoming World Airline Entertainment Association (WAEA) Conference and
Exhibition being held in Palm Springs. We also look forward to releasing
further business information this quarter."

About e.Digital Corporation: e.Digital is a leading innovator of dedicated
portable in flight entertainment systems. More than 30 airlines have made
dedicated portable systems powered by e.Digital technology their in flight
entertainment choice. e.Digital also owns and is monetizing its Flash-RT
portfolio of flash memory-related patents. e.Digital was the first company
to develop, employ and patent important technology that initiated the use
of flash memory in portable products. For more information about e.Digital,
please visit: www.edigital.com.

Safe Harbor statement under the Private Securities Litigation Reform of
1995: All statements made in this document, other than statements of
historical fact, are forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act. You should not place undue
reliance on these statements. We base these statements on particular
assumptions that we have made in light of our industry experience, the
stage of product and market development, expected future developments and
other factors that we believe are appropriate under the circumstances.
These forward-looking statements are based on the then-current
expectations, beliefs, assumptions, estimates and forecasts about the
businesses of the Company and the industries and markets in which the
Company operates. Actual outcomes and results may differ materially from
what is expressed or implied by the forward-looking statements. More
information about potential factors that could affect the Company can be
found in its most recent Form 10-K, Form 10-Q and other reports and
statements filed with the Securities and Exchange Commission ("SEC").
e.Digital Corporation disclaims any intent or obligation to update these or
any forward-looking statements, except as otherwise specifically stated by
it.

e.Digital Corporation and subsidiary
Condensed Consolidated Balance Sheet
(000's omitted except per share amount)
(unaudited)

June 30, March 31,
2009 2009
$ $
ASSETS
Current
Cash 3,074 3,814
Accounts receivable 219 94
Inventory 519 517
Deposits and prepaid expenses 31 26
---------- ----------
Total current assets 3,843 4,451
Property and equipment, net 21 27
---------- ----------
Total assets 3,864 4,478
========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current
Accounts payable 357 203
Accrued and other 386 590
Convertible term debt 241 381
---------- ----------
Total current liabilities 984 1,174
Long term liabilities 8 24
Stockholders' equity 2,872 3,280
---------- ----------
Total liabilities and stockholders' equity (deficit) 3,864 4,478
========== ==========

e.Digital Corporation and subsidiary
Condensed Consolidated Statement of Operations
(000's omitted except per share amount)
(unaudited)

For the three months
ended June 30,
2009 2008
$ $
Revenues 223 378
Cost of revenues 121 264
--------- ---------
Gross profit 102 114
Operating expenses:
Selling and administrative 577 539
Research and development 79 147
--------- ---------
Total operating expenses 656 686
--------- ---------
Operating income (loss) (554) (572)
Other income (expenses) (15) (98)
--------- ---------
Income (loss) before income taxes (569) (670)
Provision for income taxes - -
--------- ---------
Income (loss) (569) (670)
Dividends on convertible preferred stock (43) (1)
--------- ---------
Income (loss) attributed to common stockholders (612) (671)
========= =========
Income (loss) per common share - basic and diluted (0.00) (0.00)
========= =========

Weighted average common shares outstanding 282,507 274,498
========= =========