e.DIGITAL ANNOUNCES NEW FLASH-R™ PATENT PORTFOLIO LICENSE AND SETTLEMENT AGREEMENT

(SAN DIEGO, CA, – January 8, 2009) – e.Digital Corporation (OTC: EDIG), a leading technology innovator of dedicated portable entertainment systems and patented flash memory-related technology, announced today that another company has licensed its Flash-R™ patent portfolio. Under the terms of the confidential licensing and settlement agreement, e.Digital is receiving a one-time licensing fee.

e.Digital’s Flash-R patent portfolio covers certain aspects of the use of flash memory, addressing today's large and growing portable electronics products market. The Company unveiled the first portable recorder with removable flash memory in 1993 and believes its patent portfolio to be essential to many consumer electronics products that utilize flash memory including cell phones, digital cameras, camcorders, PDAs and other popular devices. In September 2007 and March 2008, the Company filed its first Flash-R portfolio patent infringement litigation against eight defendants.

"We are pleased to have entered into the third licensing agreement of our flash memory-related intellectual property this fiscal year,” commented Robert Putnam, senior vice president of e.Digital Corporation. “We expect further portfolio activity this quarter and throughout our next fiscal year.”