e.Digital Corporation (fka EDIG)

[Cassandra]

NEWe.LONG: You are quoting from the first PR, which was issued before e.Digital signed a development agreement with Eclipse. Both the PR on 3/6/02 that announced the agreement and the SEC filings make it clear that the agreement is with Eclipse by Fujitsu Ten, which is strictly aftermarket, not with Fujistu Ten, the division that supplies OEM equipment to car manufacturers.

Therefore, I still maintain my belief that e.Digital has no relationship at all with Toyota nor that there are any serious discussions with either Eclipse or F-T about putting the Eclipse HD1213 into new Toyotas as OEM equipment. I believe that FF is being very misleading by stating that it is likely to occur in the future and that he is abusing the Safe Harbor rules in doing so.

Also, it is interesting that as of 6/30/03, e.Digital had still not met the criteria to recognize the $15,000 NRE fee that Eclipse paid over a year ago. Nor is there any mention of an order in the most recent 10Q.

In March 2002, we announced that we had entered into a Development and
Manufacturing Agreement with Eclipse by Fujitsu Ten ("Eclipse"), a car stereo
company. Under the agreement, e.Digital receives non-recurring engineering
("NRE") fees for design and development services, as well as revenues for the
manufacture and delivery of Eclipse-branded audio products. Specifically, the
agreement states that e.Digital will provide Eclipse with engineering services
to integrate file management and compressed audio management technology designed
by e.Digital into an advanced automotive audio system. Prior to entering into
the Development and Manufacturing Agreement, we had collaborated with Eclipse
for several months to develop and deliver state-of-the-art automotive OEM and
aftermarket infotainment systems integrating the latest digital audio, voice
recognition, data storage, video, and wireless Internet technologies for sale
under the Eclipse brand name. Eclipse refers to their automotive audio system as
an "infotainment" platform because it includes not only a radio and CD Player,
but also may (i) connect wirelessly to the Internet to download music or other
data, (ii) store, organize, retrieve, and play back data, including digital
audio files, from a hard disk drive, (iii) connect wirelessly to a user's home
personal computer while parked in the driveway for purposes of downloading
and/or uploading music or other information, (iv) record radio signals to a
built-in hard disk drive as they are received and (v) recognize the driver's
voice commands to perform a variety of operations. The first system was
unveiled at the 2002 International Consumer Electronics Show in Las Vegas. To
date, we have received $15,000 under this agreement with respect to NRE fees
only, of which $15,000 has been deferred as of June 30, 2003.

PR:
E.DIGITAL CORPORATION ANNOUNCES DEVELOPMENT AND MANUFACTURING AGREEMENT WITH ECLIPSE BY FUJITSU TEN

e.Digital to Design, Develop, Manufacture, and Deliver Eclipse-Branded Products for Automotive Infotainment and Telematics Systems

(SAN DIEGO, CA - March 6, 2002) - e.Digital Corporation (OTC: EDIG), a global provider of comprehensive digital product development and designs, announced today that it has signed a development and manufacturing agreement with Eclipse by Fujitsu Ten. Under the agreement, e.Digital will receive non-recurring engineering (NRE) fees for design and development services. Additionally, e.Digital will receive revenues for the manufacture and delivery of Eclipse-branded audio products for the automotive infotainment and telematics market.

Steve Ferguson, Vice President of Sales and Marketing of e.Digital, stated, "We are very excited about this opportunity to design Eclipse-branded products by integrating the latest in automotive infotainment and telematics into a system using our MicroOSTM and other technologies. We are integrating information, communication, and entertainment into a sophisticated, easy-to-use system."

Jim Collier, President and Chief Operating Officer of e.Digital, said, "This agreement represents a key step in our plans to move aggressively into the fast-growing OEM, ODM, and aftermarket automotive telematics industry. It also provides a technology foundation that will accelerate our expansion into what is potentially the fastest growing market since the PC. In addition to technology development e.Digital will design and manufacture these high-end products."

Eclipse by Fujitsu Ten automotive audio and infotainment products and technology received prestigious Audio Sound Grand Prix Awards in 2000 and 2001. Eclipse is the fastest growing brand in the car stereo world.

Both companies unveiled the Eclipse MP-3 Changer at the International Consumer Electronics Show in Las Vegas early this year. Manufacturing and delivery of products to Eclipse by Fujitsu Ten are planned for the third calendar quarter this year. Eclipse-branded products will be sold to consumers through their established distribution channels.

About Eclipse by Fujitsu Ten
For more information on the company and its products, please visit www.eclipse-web.com.

http://www.edig.com/news/releases/pr030602.html