E.DIGITAL CORPORATION AND FUJITSU TEN SETTLE DISPUTE

(SAN DIEGO, CA, February 28, 2005) – e.Digital Corporation (OTC: EDIG) and Fujitsu Ten Corporation of America (FTCA) announced today that they have entered into a settlement of their contractual dispute arising out of the development of the HD 1213 MP3 product for automotive use by e.Digital for FTCA. The companies regret that the product did not proceed to market as they had anticipated and both companies remain open to potential business relationships and opportunities with each other.