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e.Digital Announces Third Quarter Results

SAN DIEGO, CA -- (Marketwire) -- 02/13/13 -- e.Digital Corporation (OTCQB: EDIG), a long standing source of innovation and future-defining patented technologies, today reported financial results for its third quarter of fiscal 2013, ended December 31, 2012.

The Company reported a net loss of $334,494 or $(0.00) per share for the third quarter of fiscal 2013, compared to a net income of $671,417 or $0.00 per share for the prior year's third quarter. For the third quarter of fiscal 2013 revenues totaled $79,072 compared to $1,281,845 for the third quarter of the prior year. The most recent quarter included $0 of patent license revenues compared to $1,155,000 for the third quarter of the prior year. Gross profit for the third quarter was $6,351 or 8% of revenues, compared to $1,140,046 or 89% of revenues, for the prior year's third quarter. Operating expenses decreased to $400,045 from $437,629 for the prior year's comparable quarter primarily due to reduced patent related costs.

For the nine months ended December 31, 2012 the Company reported a net loss of $1,043,482 or $(0.00) per share on revenues of $336,567. For the comparable nine months of the prior year the Company reported net income of $1,566,084 or $0.01 per share on revenues of $4,506,151. The Company's results are impacted by the timing and amount of license fees and there were no significant licensing revenues so far in fiscal 2013.

"Q3 was essentially a transitional quarter for e.Digital," commented Fred Falk, President and CEO of e.Digital. "With the reexamination of two of our key patents behind us, we were able to reignite our patent monetization efforts. Through our newly retained law firm, Handal & Associates, we have been aggressively pursuing parties believed to infringe the Company's Flash-R™ patents covering the use of flash memory technologies." In October and November 2012, the Company commenced new enforcement action by filing six complaints in the U.S. District Court for the Southern District of California. In December 2012 and January 2013 the Company filed an additional ten complaints asserting that products made and sold by the defendant companies infringe the Company's U.S. patents, and dismissed one defendant without prejudice. "We will continue to work hard to protect and enforce the Company's intellectual property and we expect to see positive results through our efforts," continued Falk.

In addition to the Flash-R progress, Q3 was a milestone quarter for new technology development. The Company was granted six patents for context and interpersonal awareness systems technologies, thereby establishing rights and officially launching the Company's Nunchi® patent portfolio. Over the last several months, the Company filed three new Nunchi related patent applications. The Company is also currently developing technologies in the areas of cloud technology, information security and user authentication. "As we return to monetizing our Flash-R patent portfolio we are also now better poised to pursue Nunchi licensing opportunities and to bring on-line our next family of IP," concluded Falk.

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,
                                                       2012         2012
                                                         $            $
ASSETS
  Current
    Cash                                                  2,051        3,125
    Accounts receivable                                     122          168
    Inventory                                                30           98
    Deposits and prepaid expenses                            61           40
                                                   ------------ ------------
  Total current assets                                    2,264        3,431
    Property and equipment, net                              14           18
    Inventory, long-term                                    106           89
                                                   ------------ ------------
  Total assets                                            2,384        3,538
                                                   ============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY
  Current
    Accounts payable                                         73          100
    Accrued and other                                       110          211
                                                   ------------ ------------
  Total current liabilities                                 183          311
  Stockholders' equity                                    2,201        3,227
                                                   ------------ ------------
  Total liabilities and stockholders' equity              2,384        3,538
                                                   ============ ============


          e.Digital Corporation and subsidiary
     Condensed Consolidated Statement of Operations
        (000's omitted except per share amount)
                      (unaudited)

                                        For the three       For the nine
                                           months              months
                                     ended December 31,  ended December 31,
                                       2012      2011      2012      2011
                                         $         $         $         $
Revenues                                   79     1,282       337     4,506
Cost of revenues                           73       142       269     1,598
                                     --------  --------  --------  --------
  Gross profit                              6     1,140        68     2,908
Operating expenses:
  Selling and administrative              269       219       724       699
  Research and related expenditures       131       219       446       512
                                     --------  --------  --------  --------
Total operating expenses                  400       438     1,170     1,211
                                     --------  --------  --------  --------
Operating income (loss) before
 income taxes                            (394)      702    (1,102)    1,697
Provision for income taxes                 59       (31)       59      (132)
                                     --------  --------  --------  --------
Income (loss)                            (335)      671    (1,043)    1,565
Dividends on preferred stock                -         -         -         -
                                     --------  --------  --------  --------
Income (loss) attributed to common
 stockholders                            (335)      671    (1,043)    1,565
                                     ========  ========  ========  ========
Income (loss) per common share -
 basic and diluted                      (0.00)     0.00     (0.00)     0.00
                                     ========  ========  ========  ========

Weighted average common shares
 outstanding
  Basic and diluted                   293,008   293,003   293,005   293,003
                                     ========  ========  ========  ========

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