e.DIGITAL ANNOUNCES LICENSE AND

SETTLEMENT AGREEMENT WITH TEAC

(SAN DIEGO, CA, – February 28, 2011) – e.Digital Corporation (OTC: EDIG),

a leading innovator of dedicated portable entertainment systems and patented flash memory-related technology, announced today that it has entered into a license and settlement agreement with TEAC America, Inc. (TEAC). Under the terms of the confidential agreement, TEAC obtained a license and release on the Company’s Flash-R™ patent portfolio and paid e.Digital a one-time licensing fee.