e.DIGITAL ANNOUNCES NEW FLASH-R™ PATENT PORTFOLIO LICENSE AND SETTLEMENT AGREEMENT

(SAN DIEGO, CA, – January 8, 2009) – e.Digital Corporation (OTC: EDIG), a leading technology innovator of dedicated portable entertainment systems and patented flash memory-related technology, announced today that another company has licensed its Flash-R™ patent portfolio. Under the terms of the confidential licensing and settlement agreement, e.Digital is receiving a one-time licensing fee.