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e.Digital Reports Fiscal Year 2012 Results

(June 22, 2012)

SAN DIEGO, CA -- (Marketwire) -- 06/22/12 -- e.Digital Corporation (OTCBB: EDIG), a leading innovator of dedicated portable entertainment systems and patented flash memory-related technology, today announced revenues of $4.7 million for its fiscal year ended March 31, 2012. Revenues for fiscal year 2012 included $4.1 million in licensing fees from the Company's Flash-R™ patent portfolio and $0.6 million in eVU™ portable in flight entertainment (IFE) sales and services. For the prior year, licensing revenue was $0.2 million and eVU revenues were $1.1 million. During fiscal 2012 the Company licensed eight companies from the second round of patent enforcement and one additional company outside of the litigation and in the prior year licensed one company from the second round.

Gross profit for fiscal year 2012 was $2.9 million or 62% of revenues, compared to $0.5 million or 39% of revenues for the prior year. The increase in gross profit is primarily the result of an increase in higher margin patent license revenue.

Operating expenses for fiscal year 2012 were $1.6 million, increased slightly from $1.59 million in fiscal year 2011. The increase is primarily as a result of increased legal and professional fees related to the patent reexamination.

Income attributable to common stockholders for fiscal year 2012 was $1.2 million or $(0.00) per diluted share, compared to the net loss attributable to common stockholders of $1.1 million or $(0.00) per diluted share for fiscal year 2011.

"Fiscal year 2012 was a challenging year for e.Digital," commented Fred Falk, president and CEO of e.Digital. Although the Company reported a profitable year, significant effort was focused responding to events related to Flash-R patent portfolio monetization activities. An unfavorable Markman ruling in the second round of Flash-R litigation in the district of Colorado, limited the Company's overall licensing revenue potential for that round. In addition, during the year two key Flash-R patents, US 5,491,774 (the '774 patent) & US 5,742,737 (the '737 patent), were accepted for reexamination by the United States Patent and Trademark Office (USPTO). The Company responded to the first '774 office action which was a rejection of certain claims by the patent office. In an effort to overcome the rejection, the Company filed a request to amend certain claim elements in the '774 patent, that was approved by the USPTO, thereby successfully ending the '774 reexamination. The Company expects, but cannot assure, that the amendments will help clarify and strengthen its ability to enforce infringement of the '774. With regard to the '737 patent, the Company filed a response to a USPTO office action and subsequently received a final rejection. As previously reported, the Company intends to file a supplemental declaration to try to overcome the rejection.

"We continued to make progress in the development and marketing of our Nunchi technology," added Falk. The Company reported that it filed six patent applications related to Nunchi. They are:

Application No. Filing Date 12/891,875 09-28-2010 13/047,163 03-14-2011 13/047,206 03-14-2011 13/047,290 03-14-2011 13/047,306 03-14-2011 13/047,420 03-14-2011

The Company responded to USPTO office actions related to the applications and is hopeful that some patents will be granted this year. Falk concluded, "We continue to have licensing and partnering related discussions with wireless communications providers and hardware manufacturers and continuing Flash-R patent activities."

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:

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) March 31, 2012 2011 $ $ ASSETS Current Cash and cash equivalents 3,125 1,806 Accounts receivable 168 98 Inventory 98 256 Deposits and prepaid expenses 40 30 --------------- --------------- Total current assets 3,431 2,190 Inventory, long-term 89 - Property and equipment, net 18 7 --------------- --------------- Total assets 3,538 2,197 =============== =============== LIABILITIES AND STOCKHOLDERS' EQUITY Current Accounts payable 100 24 Accrued and other 211 153 --------------- --------------- Total current liabilities 311 177 Stockholders' equity 3,227 2,020 --------------- --------------- Total liabilities and stockholders' equity 3,538 2,197 =============== =============== e.Digital Corporation and subsidiary Condensed Consolidated Statement of Operations (000's omitted except per share amount) (unaudited) For the year ended March 31, 2012 2011 $ $ Revenues 4,727 1,296 Cost of revenues 1,778 790 --------------- --------------- Gross profit 2,949 506 Operating expenses: Selling and administrative 964 1,119 Research and related expenditures 673 473 --------------- --------------- Total operating expenses 1,637 1,592 --------------- --------------- Net income (loss) and comprehensive income (loss) 1,312 (1,086) (Provision for) benefit from income taxes (117) 3 --------------- --------------- Net income (loss) and comprehensive income (loss) 1,195 (1,083) Accrued and deemed dividends on preferred stock - (31) --------------- --------------- Income (loss) attributed to common stockholders 1,195 (1,114) =============== =============== Income (loss) per common share - basic and diluted (0.00) (0.00) =============== =============== Weighted average common shares outstanding Basic 293,003 291,494 =============== =============== Diluted 293,335 291,494 =============== ===============

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