Thursday July 28, 8:30 am ET

Company Provides Fiscal Q2 Revenue Guidance

SAN DIEGO--(BUSINESS WIRE)--July 28, 2005--e.Digital Corporation (OTC:EDIG - News), a leading innovator of proprietary digital technology platforms, today announced preliminary unaudited revenues of approximately $950,000 for the quarter ended June 30, 2005. The company also announced that it expects revenues in its second fiscal quarter (Q2 - 2006) ending September 30, 2005 to exceed $1.6 million.

``We expect increased fiscal 2006 revenues by designing, developing, manufacturing, selling and supporting versions of our proprietary content-protected digital video/audio technology platform (DVAP) to current and emerging customers,`` said Atul Anandpura, e.Digital`s president and chief executive officer. ``We expect DVAP-based Kino(TM) devices will contribute revenues in fiscal 2006, along with new customer-branded closed system versions of our DVAP. We also expect additional orders and business from APS/Wencor.

``Recent results evidence that our strategy of aligning our DVAP with desirable video content and focusing on companies providing or pursuing the sales or rentals of closed system secure video products is working. We look forward to providing more information regarding current and emerging business as events occur and as our business customers announce their products.``

Concluded Anandpura, ``We thank our shareholders for their support and look forward to presenting e.Digital`s latest business developments at our upcoming annual meeting.``

About e.Digital Corporation: e.Digital Corporation partners with leading, innovative companies, designing and providing manufacturing services for their branded digital video/audio and wireless products based on the Company`s proprietary MicroOS(TM)-enabled technology platforms. e.Digital specializes in the delivery, management, and protection of secure digital content through its technology platforms. e.Digital`s services include the licensing of the Company`s MicroOS, custom software and hardware development, industrial design, and manufacturing services through the Company`s manufacturing partners. For more information about e.Digital and its technology platforms, please visit the company website at 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. These statements are not guarantees of future performance and involve risks, uncertainties that could cause actual results to differ materially from those suggested in the forward-looking statements, including but not limited to the Company`s ability to finance its operations, acceptance of customer-branded products, securing additional business, and other risks identified and discussed in our filings with the Securities and Exchange Commission (``SEC``). 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 by e.Digital Corporation 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.

Note: Kino is a trademark of e.Digital Corporation. All other company, product, and service names are the property of their respective owners.

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