e.DIGITAL ANNOUNCES RECORD REVENUES AND PROFITABLE RESULTS FOR FISCAL YEAR 2009

(SAN DIEGO, CA, – June16, 2009) – e.Digital Corporation (OTC: EDIG), a leading technology innovator of dedicated portable entertainment systems and patented flash memory-related technology, today announced record revenues of $11.1 million for its fiscal year ended March 31, 2009, an increase of 50% over fiscal year 2008 revenues. Revenues for fiscal year 2009 included $10.1 million in licensing fees from the Company’s Flash-R™ patent portfolio. e.Digital also announced net income attributable to common stockholders for fiscal year 2009 of $2.8 million or $0.01 per diluted share, compared to a net loss attributable to common stockholders of $1.8 million or $(0.01) per diluted share for fiscal year 2008. The $4.6 million improvement was the result of higher margin patent license revenues that offset a decline in eVU™ product and service revenues.

“Our substantial investment in pioneering the use of flash memory in portable recording products in the early 1990s, and the associated intellectual property (IP), is being rewarded,” commented Fred Falk, president and CEO of e.Digital. “This past fiscal year marked a period of great improvement in our financial results. We recognized our first patent licensing revenues and believe the growing markets for portable electronic products employing flash memory provide many potential licensees for our Flash-R patent portfolio.”

Gross profit for fiscal year 2009 was $6.5 million or 59% of revenues, compared to $1.5 million or 28% of revenues for the same period a year ago. The improved gross profit resulted from higher margin patent license revenue. Operating expenses for fiscal year 2009 were $2.8 million, compared to $3.0 million in fiscal year 2008. The decrease resulted from reduced personnel and reassigning certain engineers and technicians to customer support and service roles, offset by increased legal expenses.

The Company improved its balance sheet at March 31, 2009 with working capital of $3.3 million, compared to a working capital deficit of $1.3 million at March 31, 2008. Stockholders' equity improved to $3.3 million, compared to a stockholders’ deficit of $1.7 million at the end of fiscal year 2008.

“On the digEcor litigation front, the bulk of the bench trial has been completed and ‘proposed findings of fact and conclusions of law’ briefs are due in July followed by closing arguments,” continued Falk. “The Court is then expected to deliberate before delivering its final rulings on the few remaining issues in the case.”

“As we previously discussed throughout the year, our eVU business has been very sluggish due primarily to airline economic headwinds,” added Falk. “We’ve increased our recurring service revenues in calendar 2009 and expect eVU business to pick up this fiscal year. We are seeing a slowly improving outlook in the portable in flight entertainment (IFE) industry and continue to pursue markets outside of IFE in spite of generally risk averse business climates.”

Falk concluded, “Having proven the value of our Flash-R patent portfolio by recording record revenues and profits last fiscal year, we look forward to additional legal and licensing activity with new licensee prospects and continued IP-related revenues this fiscal year.”