e.Digital Corporation Announces Preliminary Second Quarter Fiscal 2006 Revenues

e.Digital Corporation (OTC:EDIG - News), a leading innovator of proprietary digital technology platforms, today announced preliminary revenues for the second fiscal quarter of 2006 ended September 30, 2005, to be over $1.8 million compared to $2 million for the same period last year. For the six months ended September 30, 2005, the company announced preliminary revenues to be over $2.8 million compared to $2.1 million for the six months ended September 30, 2004.

The company also reported it has received notice of a new digEplayer(TM) order from digEcor(TM) (formerly APS) for approximately $750,000, which it expects to ship this quarter. e.Digital also expects to receive orders for it's new MedeViewer E7(TM) this quarter from companies in the healthcare and travel and leisure industries.

"We continue to make progress growing annual revenues and reducing losses," said Atul Anandpura, president and chief executive officer of e.Digital Corporation. "We are experiencing a growing market for versions of secure, closed system video products which we are moving to exploit through versions of our new proprietary digital video/audio technology platform (DVAP)."

Commenting on digEcor's decision to develop their own products, Robert Putnam, e.Digital's senior vice president, said, "Intellectual property rights, non-recurring engineering fees and the size of guaranteed orders were the major issues that precluded us from reaching an agreement on supplying an embedded system. While we appreciate notice of digEcor's latest order, we understand their desire to go their own direction in order to secure their own intellectual property for the digEplayer."

"We are proud to be the company that designed, developed and is manufacturing (through our partners in Asia) the first portable in-flight entertainment product which is currently being used by 20 airlines," said Fred Falk, e.Digital's vice president of business development. "Based on our proprietary first generation DVAP, the award winning digEplayer showcases our expertise in closed system video products, content loading and playback. Its success has opened doors to new business opportunities with companies who share our desire to exploit new markets for closed system video products utilizing our proprietary next generation DVAP."

e.Digital's new DVAP will come in the form of a finished product with the following planned features:

High resolution digital LCD
Embedded magnetic card reader
Touch screen capabilities
Internet access
Voice over IP (VoIP)
Full featured graphical user interface
Content security
RFID for tracking and theft control
Access to e.Digital-supplied content
Concluded Putnam, "With orders expected for our MedeViewer E7 this quarter and in the next quarter, and based on current and emerging business from the healthcare and travel and leisure industries and other markets, we expect fiscal 2006 annual revenues and business to exceed fiscal 2005 revenues and business. We also expect to be much more active with new customers in media and press opportunities for e.Digital and our next generation proprietary DVAP technology."

These preliminary revenue results are subject to completion of quarter end accounting procedures by e.Digital's management and to review by its independent auditors. e.Digital expects to announce its final results for the second fiscal quarter ended September 30, 2005, by mid-November 2005.

About e.Digital Corporation: e.Digital Corporation partners with leading, innovative companies, designing and providing manufacturing services for their branded digital video/audio and wireless products based on the Company's proprietary MicroOS(TM)-enabled technology platforms. e.Digital specializes in the delivery, management and protection of secure digital content through it's technology platforms. e.Digital's services include the licensing of the Company's MicroOS, custom software and hardware development, industrial design and manufacturing services through the Company's manufacturing partners. For more information about e.Digital and its technology platforms, please visit the company website at 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. These statements are not guarantees of future performance and involve risks, uncertainties that could cause actual results to differ materially from those suggested in the forward-looking statements, including but not limited to the Company's ability to finance its operations, completion of fiscal quarter end closing procedures and review of our results by our independent auditors, acceptance of customer-branded products, entry of competitors and other risks identified and discussed in our filings with the Securities and Exchange Commission ("SEC"). 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 by e.Digital Corporation 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.

Note: MicroOS and MedeViewer E7 are trademarks of e.Digital Corporation. digEcor and digEplayer are trademarks of Wencor. All other company, product and service names are the property of their respective owners.



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Contact:
e.Digital Corporation
Robert Putnam, 858-679-1504
rputnam@edigital.com



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