e.DIGITAL ON PACE FOR RECORD FISCAL YEAR REVENUES 

Company Expects to Report Approximately $5 Million in Revenues

Through Fiscal Q3

(SAN DIEGO, CA, – December 20, 2007) – e.Digital Corporation (OTC: EDIG), a leading innovator of dedicated portable inflight entertainment (IFE) systems and patented flash memory-related technology, announced today that it is on track to report record revenues for its fiscal year ending March 31, 2008. The Company expects to report approximately $5 million in revenues through its fiscal third quarter ending December 31, 2007. 

“Since launching eVU™ last year, twelve airlines have made our proprietary portable system their inflight entertainment choice,” said Will Blakeley, president of e.Digital.  “Our patented, proprietary and efficient core technology provides fundamental competitive advantages over consumer and PC-based devices including the ability to easily add features and customize eVU for IFE customers. This year, we enhanced battery life to 20+ hours and added new features for long-haul round trip service. We believe eVU is the best portable entertainment system available to airlines today and we expect to expand our leadership in the dedicated portable IFE market in 2008 through new and follow-on orders.” 

Blakeley continued, “While we intend to grow our portable IFE business in 2008, we have been encouraged by major airline and aircraft companies to apply our core technology to a simple, lightweight, flexible embedded solution providing individualized on-demand entertainment.  An embedded eVU system would offer substantial product and weight/fuel cost savings and open the door to fleet-size eVU orders. We have initiated the design and adaptation of our eVU technology into an embedded system and look forward to reporting more on this important business development.” 

“Our intellectual property team is finalizing detailed legal and technical documentation to support additional Flash-R™ patent portfolio enforcement actions against a broad range of companies,” added Blakeley. “To date, we have identified annual U.S. revenues of more than $20 billion from what we believe are infringing products from such companies. Our robust intellectual property portfolio addresses vital aspects of the use of removable flash memory in portable devices, and we believe the number of infringing companies and associated revenues continues to grow annually.” 

Blakeley concluded, “We are very encouraged with the progress of our eVU business, and we are convinced our Flash-R patent portfolio provides the opportunity for substantial future revenues.”