FOR IMMEDIATE RELEASE

July 2, 2007

e.DIGITAL REPORTS FISCAL 2007 RESULTS: Receives Over $1.2 Million in New IFE Orders, Expects to Report Over $3 Million in Revenues for the First Half of Fiscal 2008, Provides Update on eVU™ Business and Flash Memory IP Efforts

(SAN DIEGO, CA, – July 2, 2007) – e.Digital Corporation (OTC: EDIG), a proven technology innovator of dedicated portable inflight entertainment (IFE) systems and patented technology in the utilization of flash memory in portable devices today reported that revenues for its fiscal year 2007 ended March 31, 2007 totaled $1.8 million compared to revenues of $3.3 million for fiscal 2006. The decrease was due primarily to transitioning from supplying an older product to one customer accounting for substantially all of fiscal 2006 revenue to distributing the new proprietary eVU™ portable entertainment system to multiple customers commencing in the second half of fiscal 2007. Product sales for the second half of the year were $1.79 million compared to $34,000 for the first six months prior to eVU’s launch.

e.Digital recorded a gross profit of $1.0 million in fiscal 2007 compared to a gross profit of $0.1 million for fiscal 2006. Gross profit in fiscal 2007 included a $603,750 reduction in costs due to the reversal of an impairment charge previously recorded in cost of sales in the prior year. The Company reported an operating loss of $2.1 million for fiscal 2007, compared to an operating loss of $2.5 million for fiscal 2006. Net loss available to common stockholders for fiscal 2007 was $(0.01) per share, compared to $(0.03) per share for fiscal 2006.

e.Digital also announced today that it has received new IFE orders totaling over $1.2 million from Mezzo Movies and from a major European airline. The Company expects to ship the orders during this second fiscal quarter.

“Our eVU™ mobile entertainment system IFE business is building momentum,” said Will Blakeley, e.Digital’s president and chief technical officer. “We began receiving quantity eVU orders in the second half of fiscal 2007 subsequent to the formal debut of eVU at the WAEA show last September. Since that time the activity and interest in our eVU portable entertainment systems and services has steadily increased. Combining first fiscal quarter eVU sales with scheduled current quarter sales (fiscal Q2), we expect to report over $3 million in revenues for the first half of fiscal 2008.”

Addressing e.Digital’s efforts with Duane Morris LLC to monetize its flash memory-related patent portfolio, Blakeley commented, “Our management team, with the assistance of intellectual property (IP) veteran, Pat Nunally, has been working diligently with patent enforcement counsel, Duane Morris to exploit our portfolio. We are very encouraged by the technical and legal development of our portfolio and expect patent enforcement actions to commence this quarter.”

“We believe our efforts to monetize our flash-memory related IP and our accelerating eVU IFE business position e.Digital for a successful fiscal 2008,” concluded Blakeley. “We look forward to announcing the date of the shareholder’s meeting this quarter and expect additional eVU orders throughout this fiscal year to add to our over $3 million in current eVU business and backlog.”

About e.Digital Corporation: e.Digital is a provider of secure portable Video on Demand products including its proprietary eVU™ portable entertainment system. e.Digital also owns and is pursuing the monetization of its portfolio of flash memory-related patents. For more information about e.Digital and eVU, 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.

CONTACT:
e.Digital Corporation: Robert Putnam, (858) 304-3016 ext. 205, rputnam@edigital.com

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