e.Digital Corporation (OTCBB: EDIG), a leading innovator of dedicated portable entertainment systems and patented flash memory-related technology, today reported financial results for its third quarter of fiscal 2012 ended December 31, 2011.

The Company reported net income of $671,000, or $0.00 per share, for the t....." />
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e.Digital Announces Third Quarter Results

(February 09, 2012)

SAN DIEGO, CA -- (Marketwire) -- 02/09/12 -- e.Digital Corporation (OTCBB: EDIG), a leading innovator of dedicated portable entertainment systems and patented flash memory-related technology, today reported financial results for its third quarter of fiscal 2012 ended December 31, 2011.

The Company reported net income of $671,000, or $0.00 per share, for the third quarter of fiscal 2012 compared to a net loss of $314,000 or $(0.00) per share for the prior year's third quarter. For the third quarter of fiscal 2012 revenues totaled $1.3 million compared to $141,000 for the third quarter of the prior year. The most recent quarter included $1.1 million of patent license revenues. Gross profit for the third quarter, including the positive contribution of licensing margins, was $1.1 million, 89% of revenues, compared to $46,000, 32% of revenues, for the prior year's third quarter. Operating expenses increased to $438,000 from $363,000 for the prior year's comparable quarter primarily due to patent reexamination related costs. Quarter-end cash increased to $3,512,000 from $1,806,000 at March 31, 2011.

For the nine months ended December 31, 2011 the Company reported net income of $1,566,000, or $0.01 per share, on revenues of $4.5 million. This is an improvement over the comparable nine months of the prior year that had a net loss of $967,000 on revenues of $891,000.

"Flash-R™ patent portfolio licensing outside of our litigation activities enabled us to report a third consecutive profitable quarter," said Fred Falk, president and CEO of e.Digital Corporation. "Even though our '774 and '737 patents are in reexamination, we are pleased that we were able to continue to license the portfolio. While the timing and amount of any future licenses may be impacted positively or negatively by the patent reexamination and other factors, we remain optimistic about future revenue potential of our Flash-R portfolio."


"Regarding the '774 and '737 reexamination process, we have conducted patent examiner interviews and submitted office action responses to the United States Patent and Trademark Office ("USPTO"). We expect the reexamination process to conclude within approximately three months."

"We are continuing to develop our Nunchi™ technology. The patent-pending Nunchi platform consists of an infrastructure for mobile devices and host servers, hosting third-party application specific signal processing algorithms. These algorithms analyze data collected by multiple sensors on mobile devices. The Consumer Electronics Show last month allowed us to privately expose Nunchi to potential partners as part of our marketing efforts to exploit this new technology."

About e.Digital Corporation: For more than 20 years, e.Digital's ideas and inventions have impacted the evolution of consumer products. Today, e.Digital innovations, including its Flash-R™ portfolio of flash memory-related patents, are essential to many portable consumer electronic products. The Company pioneered dedicated portable in-flight entertainment systems and more than 30 airlines have made e.Digital powered products their in-flight entertainment choice. For more information about e.Digital, please visit: 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. 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 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.

e.Digital Corporation and subsidiary Condensed Consolidated Balance Sheet (000's omitted except per share amount) (unaudited) December 31, March 31, 2011 2011 $ $ ASSETS Current Cash 3,512 1,806 Accounts receivable 106 98 Inventory 213 256 Deposits and prepaid expenses 34 30 ------------- ------------- Total current assets 3,865 2,190 Property and equipment, net 3 7 ------------- ------------- Total assets 3,868 2,197 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current Accounts payable 63 24 Accrued and other 211 153 ------------- ------------- Total current liabilities 274 177 Stockholders' equity 3,594 2,020 ------------- ------------- Total liabilities and stockholders' equity 3,868 2,197 ============= =============



e.Digital Corporation and subsidiary Condensed Consolidated Statement of Operations (000's omitted except per share amount) (unaudited) For the three months For the nine months ended December 31, ended December 31, 2011 2010 2011 2010 $ $ $ $ Revenues 1,282 141 4,506 891 Cost of revenues 142 95 1,598 582 --------- --------- --------- --------- Gross profit 1,140 46 2,908 309 Operating expenses: Selling and administrative 219 281 699 920 Research and related expenditures 219 82 511 328 --------- --------- --------- --------- Total operating expenses 438 363 1,210 1,248 --------- --------- --------- --------- Operating income (loss) before income taxes 702 (317) 1,698 (939) Provision for income taxes (31) 3 (132) 3 --------- --------- --------- --------- Income (loss) 671 (314) 1,566 (936) Dividends on preferred stock - - - (31) --------- --------- --------- --------- Income (loss) attributed to common stockholders 671 (314) 1,566 (967) ========= ========= ========= ========= Income (loss) per common share - basic and diluted 0.00 (0.00) (0.00) 0.00 ========= ========= ========= ========= Weighted average common shares outstanding Basic and diluted 293,003 293,003 293,003 291,000 ========= ========= ========= =========



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