NEW EDIG

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e.Digital Releases SUMMARY of Annual Shareholders Meeting

Replay of the Webcast Available at e.Digital.com

(San Diego, CA - December 5, 2003) - e.Digital Corporation (OTC:
EDIG) held its Annual General Meeting of Shareholders yesterday
at its corporate offices in San Diego, California. This alert
summarizes the company's presentation to shareholders.

The Company's formal business consisted of two proposals:
Proposal #1 to re-elect Alex Diaz, Alfred H. Falk, Robert
Putnam, Allen Cocumelli and Victor Ramsauer to the Board of
Directors; and Proposal #2 to ratify the appointment of Singer,
Lewak, Greenbaum & Goldstein LLP as independent auditors of the
Company for the fiscal year ended March 31, 2004; both proposals
were approved by the shareholders.

Fred Falk, e.Digital's president and chief executive officer,
highlighted the Company's core values and innovations which
form the foundation for e.Digital's technologies and approach to
customers. Falk emphasized that the ability to innovate and
integrate new and emerging technologies into the Company's
platforms are the framework for the Company's current and future
achievement.

MicroOS™

A brief description of e.Digital's MicroOS patented technology
was included in the presentation. Of note were the technology's
ability to incorporate voice recording, AM and FM reception,
audio/video storage and playback, and wireless utilities. As
the foundation for e.Digital's major platforms, MicroOS also
manages the volume and equalizer functions, the LCD drivers and
interfaces, a wide variety of audio and video codecs, digital
rights management schemes as well as today's most popular media
storage formats. The compact size and the dynamic capability of
MicroOS is e.Digital's key asset in servicing the needs of OEM
clients faster and better than competitors.

The presentation included information on the Company's revenue
sources and its method for selecting new projects. According to
Falk, each new business proposition must have "home run"
potential, opportunities for next generation products creating
multiple revenue streams to be considered by the Company.
On-going revenue streams and diversification were noted as key
components in the Company's endeavor to ensure continued revenue
growth.

Falk noted that the Company is expanding opportunities with
existing customers and developing projects with new clients as
well. Each of these growth segments relate strongly to the
Company's stated policy for new business.

"We are confident that the quality of our technology and designs
position e.Digital at the forefront in fulfilling the future
needs of today's clients," commented Falk.

Falk stated that MicroOS is the foundation upon which the
Company has developed its leading platforms and is the key to
emerging business opportunities for e.Digital. With the bulk of
the technology development complete, each new product will have
reduced development costs and increased revenue potential.

MP3-Based Wireless Headset Platform

Falk highlighted many of the Company's recent projects including
the wireless communications project for Softeq and
Hewlett-Packard. The Ears to the World wireless MP3-based
headset was delivered this summer for use within The Magic
Kingdom, Epcot, Disney-MGM Studios and Disney's Animal Kingdom.
The headsets utilize e.Digital's patented MicroOS as well as its
hardware and firmware.

"We expect additional orders to be placed to accommodate a
greater number of guests and language selections within the
Florida parks and for use at other Disney properties around the
world," said Falk.

Additional information regarding other uses for the translation
headsets coupled with the wireless system was provided.
Scenarios ranging from use at museums and national parks to
worldwide tourism were highlighted. Each scenario related the
value of the system, providing location-based information
pertaining to specific areas of interest. It was also noted
that location based wireless technology has vast potential for
generating advertising revenue.

In-Car Infotainment Platform

The current embodiment of the Eclipse by Fujitsu Ten In-Car
Infotainment device, which Falk announced is now in production,
includes multi-codec support, integration into the car's head
unit, huge capacity, real-time MP3 encoding, 5 minute FM write
back and a high-speed connection to the PC. Falk addressed the
In-Car Infotainment platform and its potential enhancements for
future generations. Ultimately, the device is intended to
service multiple In-Car Infotainment needs ranging from wireless
communications to music, video and games and could include
virtually any other digital audio/video need desired by car
manufacturers and after-market OEMs, all in a single system.

e.Digital is targeting automobile manufacturers for the adoption
and integration of its In-Car Infotainment platform in its
current configuration. The Company is also working to penetrate
after-market audio manufacturers. According to Falk, "By
working with these outlets early on in the integration of our
In-Car Infotainment system, we are well positioned to proffer
2nd, 3rd and 4th generations of our products."

Falk also cited the Company's commitment to wireless
technology. In addition for plans to integrate 802.11
technologies into future devices, the Company's engineers
closely monitor developments with other emerging wireless
technologies including ultra-wide band.

Odyssey 1000 Personal Digital Audio Platform

Immediately following Falk's update on the In-Car Infotainment
product, he addressed the Odyssey 1000 Portable Digital Audio
Platform. The Odyssey 1000 has served as a model to OEM partners
demonstrating the full range of features that can be integrated
using MicroOS. The stylish casing, unique scroll wheel,
intuitive user interface are characteristic of the Odyssey 1000
and are easily recognizable in the first OEM branded, 1.8"
version of the platform announced last month.

"With the introduction of the 1.8" version of the Odyssey
platform for an OEM client with the branding power to move
volume and further opportunities in this area, we have decided
to discontinue retail sales of the e.Digital branded Odyssey
1000 as well as all other e.Digital branded devices," remarked
Falk. "We will continue to support sales of the player through
December 4, 2003 and honor all outstanding warranties. The
mission of the e.Digital branded Odyssey 1000 to serve as a
model for the strength and flexibility of our MicroOS core has
been realized through this latest release of the OEM branded
1.8" version. We are working with and continue to seek new OEM
customers for this platform, providing comprehensive, customized
digital music solutions to brands not yet in the market or
brands looking to enhance their existing products."

Personal Video Platform

The final product platform Falk discussed was e.Digital's
Personal Video Platform. He stated e.Digital's first commercial
release of a video-on-demand, personal video platform has
enjoyed tremendous initial success through APS's digEplayer
branding and distribution to Alaska Airlines. The first units
shipped this fall and were in the hands of select Alaska
Airlines passengers in October. The units are loaded with
content from partners such as 20th Century Fox and DMX. The
large screen delivers better than DVD quality video - a key
barrier of entry to others evaluating opportunities in the
market.

APS continues to aggressively market the digEplayer and is in
active negotiations with many of the world's leading and
emerging airlines and other companies within the travel
industry.

While e.Digital anticipates the commercial success of the
digEplayer, the Company remains active in its pursuit of other
OEMs seeking personal video platforms for their own branding
purposes. There are many opportunities for new and next
generation applications of this device as well as highly
lucrative revenue opportunities.

Included in future OEM opportunities are adaptations of
e.Digital's Personal Video Platform to service field repair
technicians, professional services (doctors, dentists, hospitals
and emergency personnel) and many other niche markets.

Falk also discussed a potential direct to consumer application
for the device. The model for this market could include
digitized content from multiple distributors, such as 20th
Century Fox and Paramount, that could be accessed by consumers
through kiosks at locations such as Hollywood Video,
Blockbuster, Wal-Mart or others.

"According to Video Business Magazine," commented Falk,
"Consumers spent $10.2 billion to rent and buy videos during the
first half of this year, a 16% gain compared to the first half
of 2002. Of that $10.2 billion, over $7 billion was spent on
the purchase or rental of DVDs indicating the readiness of
consumers to adopt advanced digital technologies over the VHS
format.

"e.Digital is well positioned to provide a wide range of digital
video solutions for OEM partners," added Falk. "Because the
foundation work is complete, the costs of development will
continue to shrink."

SUMMARY

Falk summarized "Because of the flexibility of MicroOS and the
insatiable consumer demand for portable devices, e.Digital is
well positioned to expand relationships with existing OEMs and
to enter into partnerships with new OEMs to create devices to
address multiple needs and to service the audio/video demands
for the home, the car, the office, commercial transportation -
virtually every aspect of the portable digital entertainment and
infotainment domain.

"The Company is presently in advanced negotiations with two
major OEMs on separate projects of enormous potential, each of
which seek to combine two or more of e.Digital's existing
platforms to advance the convergence of these devices. These
pending opportunities necessitated the Company securing
additional funding to strengthen its financial position."

Falk continued "While all of e.Digital's platforms and
derivative products have ‘home run' potential, each product
will require different time frames to evaluate their expected
success, some results will be evident within weeks, others may
take longer.

"e.Digital has enhanced MicroOS from a digital voice technology
into a multi-faceted digital audio, video and wireless tool
capable of servicing many needs, in many industries for many
customers.

Falk concluded by quoting former president Ronald Reagan;
‘"There are no such things as limits to growth because there are
no limits on the capacity for intelligence and imagination.' and
I would like to postulate that there are also no limits on
technology."

A replay of the meeting is available through website at
www.edigital.com for the next 30 days.

###


About e.Digital Corporation e.Digital Corporation specializes
in technology innovation and applications integration through
engineering partnerships with leading original equipment
manufacturers (OEMs) designing, licensing, branding, and
manufacturing digital audio, video and wireless products and
technology platforms. The Company also sells its Odyssey 1000™
digital jukebox through selected e-tail and retail outlets.
Applications for e.Digital's technology include delivery and
management of open and secure digital media with a focus on
music, voice, wireless and video players/recorders, automotive
infotainment and telematics systems, portable digital music
players and voice recorders; desktop, laptop, and handheld
computers; PC peripherals; cellular phone peripherals; e-books;
video games; digital cameras; and digital video recorders.
Engineering services range from the licensing of e.Digital's
patented MicroOS™ file management system to custom software and
hardware development, industrial design, and manufacturing
services. For more information about e.digital and its products,
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.
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. Those statements are not
guarantees of future performance and involve risks,
uncertainties and assumptions that will be difficult to predict.
Therefore, actual outcomes and results may differ materially
from what is expressed or implied by those 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
with the Securities and Exchange Commission ("SEC"). e.Digital
disclaims any intent or obligation to update those
forward-looking statements, except as otherwise specifically
stated by it.


CONTACT:
e.Digital Corporation: Robert Putnam, [phone],
=============================
sunpoop --SH Mtg summaries
PostID 297503 On Friday, December 05, 2003 (EST) at 2:55:05 AM

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A few of us arrived early. Early enough to have a coffee clatch in the parking lot....Ediglong, jdtiii (the nit picker) Edigokie (whom I will trounch at golf tommorrow) myself and two or three more who I apologize for not naming since my notes are in the car and I am not going downstairs to get them....Hitachi was there.... Anyway we did our normal Edig speculation on what would transpire at the meeting with jdtiii being honestly negative and not too enthused. We all went inside and saw that the meeting was not very well attended. In fact a room 1/4 that size would have been sufficient. Maybe 1/3 of the amount of attendees from last year...

I was in error when I previously posted EDig would NOT be at the CES ''ala'' RP. Of course ''RP Speak'' was a little foggy on that subject...EDig will have no booth but will have a display, about the size of the prior booths at the CES in the middle of TI's booth, manned by EDig people. TI wanted and invited EDig to be there to showcase the products that are being produced with TI technology. To me that is a heckova a deal. More exposure that EDig ever got from its own booth with TI pushing and I do mean pushing EDig and its technology.(and its free) In fact RP, after the formal meeting, emphasized that TI has sent EDig many customers and is still doing so. TI gets inquirees about certain technology and replies to those queries ''we don't do that but the company you wish to talk to is EDigital'' Call them.......I was't going to the CES this year but I am now and will meet with D'inki (Ediglong) to do our normal harrasment of all and with the express purpose of checking out the HP booth.....

I hit RP about HP and he flat refused to answer one way or the other about EDig's involvement. I did throw some other questions to try to get around ''RP Speak'' and while this is just pure conjecture on my part, ''everthing fits''.

RP did emphasize and re-emphasize that companies the magniture of HP or Gateway will NOT acknowledge anywhere on the product anyone else but themselves. The IPOD being a great example. I did not know it until today but the IPOD has a great percentage of the unit made by other companies, WHO WILL NEVER BE ACKNOWLEDGED. (in fact FF did say that EDig tried to get its name somewhere on the Gateway player but Gateway flat refused and (verbatum) ''you want our business you do it our way''.

Again talking privately with FF, I tried ''smoozing'' a bit but could get nothing factual about the 2 OEM's that he stated ''will be bigger than anything we have ever been involved with'' and that ''we are in advanced negotiations with as we speak'' I guess I lost my touch at ''smoozing'' but I did get something very significant from him, at least to me, in that I said ''in the past we have heard about this OEM and that OEM etc...with no business ever quite coming about.'' In his candid opinion did he feel this was more of the same? A definite NO to my question, I then asked him if he knew or felt the signing on the dotted line to do business with these OEM's was, (1) so-so (we are just talking or in the beginning stage of talks to see if we can do business), or (2) serious but not near an accord, or (3) ''very close'' and most likely will happen. His answer was a very positive #3. In fact he said it was in the hands of the lawers right now and he acted a little frustrated when he said that. ''You know those guys, every letter, word and paragraph has to be examined, written and re-written. Sent back and forth...etc...'' I got the impression what he was talking about was fairly close to being ''a done deal''

I was wrong in my thoughts about the need for the latest financing. It wasn't to ''pay the bills, keep the doors open or the lights on'' It wasn't to defray operating costs and it wasn't for what I thought it was for, ''to front manufacturing costs to get products to market.'' EDig has far bigger irons in the fire than we know of. Both FF and Rp stated the major reason for the financing was to have enough on the books to satisfy potential, (perhaps 1 ??) customers that the company (verbatum) ''will be around a while.''

There was no definitive news on the 3rd quarter earnings until F10 is shipped and that will happen this month. However perhaps the entire order (4,000 units) will be not be finished shipping until the 1st. couple of weeks in Jan 04. Disappointing, so I don't think this will be a ''wizz bang'' quarter.

However, FF STRESSED, that ALL, ALL, the business they are involved in now are ''LONG TERM'' relationships, meaning the products will have demand and strong sales throughout the entire year, not just at holiday times. FF says if it doesn't meet that criteria they will not do it.

I am getting pooped, its late, I have much more to say, will try to gather thoughts and do more tomorrow. Just to finish it up however, our nit picking, doubtling thomas, jdtii was swayed over to the positive side after spending at least a half an hour with RP and asking him everything in the book he could think of... As we walked out of the metting, (we were the last two beside EDig personell in there) he indicated that he was much happier and very much convinced he had a winner..

My personal opinion was one of great optimism. Of course you all know I have never been negative about EDig but just couldn't quite put my finger on what manner of success, and when, EDig would have. While FF and RP gave the usual platitudes during the formal part of the meeting afterwards they both spoke more candidly and with much enthusiasm. The meeting was not full of ''maybes'' or ''we have contacted this or that OEM and we could possibly do business with them''. It was of a quiet confidence, expressed strongly, as if they knew what they couldn't tell us was in fact ''signed, sealed and just about delivered''

This was 180 degrees off of last years meeting and while FF was not forthcoming factually you could see in his demeanor that he ''proud as punch'' in what he had to say to us.

Frank
==========================

The following is a summary of the EDIG annual Shareholder's meeting from December 4, 2003.

I have tried to capture as much of this, verbatim, as the poor quality of the webcast would allow.

EDIG Annual SHM Summary
December 4, 2003


Introduction - Robert Putnam
Welcome to the meeting (blah blah blah).
The meeting is divided into 2 parts -

Part One - corporate governance matters
Part Two - company presentation
QA to follow company presentation.


Part One
Alot of voting, motions and elections.

Part Two


Fred Falk
Thanks for joining us this afternoon for our annual shareholders meeting - held for the first time in our corporate offices - not as beautiful as the Performing Arts Center, but a lot cheaper (saved close to 5000 dollars by being at corp. offices).

This year has been about cutting costs, working towards profitability, and doing what we do best - developing technology.

Introduction of key members of EDIG team -
BOD - Alex Diaz, Alan Cocumelli, Victor Ramsauer, Rene Warden (CAO, Corp. Sec), Corporate Council
Senior VP - Atul Anundpura
VP of Biz Dev - Steve Ferguson
Marketing Communications Mgr. - JoAnn Platt
Chief Engineer and Engineering team


This past year has been very exciting - new products have been introduced. Advancements have been made. Many people have been following the progress, and are eager to learn more.

"I am certain that by the end of this presentation you will be as excited about the future of e.digital as I am."

Core values and innovations lay the foundation for our technology and approach to customers. Our ability to adapt innovations to new and emerging platforms is the framework for future achievements. Partners, customers and licensees are the Gateway to continued success. EDIG's core values ensure a consistent approach to how we handle customers, clients, employees, shareholders, partners and projects. Proprietary technology, quality, consumer satisfaction and considerations made for legitimate content are what sets EDIG apart from other technology integrators. Through innovation, EDIG's engineering team has achieved superior digital audio and video quality in a variety of portable devices. The quality of our designs, core technology, and overall deliverables make us a desirable partner for OEMs looking for fast, integrated solutions for their branded digital entertainment devices.

Consumer satisfaction is another of e.digital's strengths which enhances our position with our OEM partners.

MicroOS allows us to offer OEMs a broad range of features and functionality across multiple audio and video platforms, all designed with an intuitive user interface. e.digital's manufacturing partners represent the best in their field for audio, video, industrial and mechanical design and manufacturing.

Our own technical and customer support teams provide services directly to our customers and are a value-added option for our OEM partners.

Legitimate content is the driving force behind the demand for digital audio and video platforms. Forrester Research reported this quarter that all the major digital music services already have several hundreds of thousands of tracks from all of the major labels and many independents. Newsweek reported that on-line music will total 3.3 billion dollars in five years.

With the proliferation of legitimate content, consumers now require quality devices on which to play and store their songs, movies, games and other entertainment files and applications. This September, In-Stat/MDR reported that consumer electronics with integrated hard-drives will represent 7% of the total hard drive market this year- which is nearly double that of 2002. This market is forecasted to have a 56.7 compound annual growth rate over the 2002 - 2007 period. EDIG is part of this plan.

The technology that serves as the foundation of our platform is our proprietary MicroOS. MOS began as a voice recorder technology, but because of its inherent flexibility, we have developed it to support AM/FM reception audio and video storage and playback, and wireless utilities. MOS is compact and dynamic, responding to a variety of user interfaces. MOS manages the volume and equilizer functions, the LCD drivers and interfaces, ----- a wide variety of audio and video files, interacts with a variety of DRM schemes, and supports today's most popular media storage formats, including hard-disk drives, CD-ROMs, compact and embedded-flash, and many more.

Because MOS services so many options in such a compact package, we are able to integrate many functions within a single device, using less power, space and operating capacity. EDIG has enhanced and perfected MOS over the past several years, and as a result, we are able to complete projects faster and better than our competitors.

EDIG focuses on pursuing business that provides the company with multiple revenue opportunities. Everyone of our projects is structured to generate multiple revenue sources. By generating ongoing revenue streams, we are endeavoring to ensure that EDIG's financial success is diversified. As part of our evaluation of these projects, a primary criteria for each opportunity is that they represent home-run potential, as well as possibilities for future product generation incorporating additional functionality.

Our OEM customers come to us because we have demonstrated our ability to be on the cutting edge of technology. They rely upon EDIG to further their leadership positions with their markets.

EDIG is expanding opportunities with existing customers and developed projects with new clients. Each new customer represents technology platform opportunities for follow-on orders, maintenance fees, refurbishment, and most importantly, future projects.

We are confident that the quality of our technology and designs and our ability to service our customers' needs faster and better than our competitors positions EDIG at the forefront to fulfill the future needs of today's clients. Our success relies not only upon our technology, but also upon our ability to enhance existing relationships, and to forge new relationships with leading OEMs and manufacturing partners. It is through demonstrated design and product quality and deliverables, that we are able to augment existing alliances and attract new ones.

MicroOS is the foundation upon which we have developed our leading platforms, and the key to emerging opportunities for e.digital. All the products that you see here today have had at least one commercial release, with the exception of the first product to be derived from our in-car infotainment platform.

I am delighted to announce today that the Eclipse by Fujitsu-Ten product is now in full production.

The development of MicroOS and its applications for digital audio and video is largely complete. With the lion's share of the work behind us, each new project requires fewer development hours thereby reducing our cost and increasing the revenue potential of each project.

I would like to provide a brief update on the product that we delivered this summer to Softeq and HP. As many of you know, the end-customer for this product is Walt Disney World Resort in Orlando Florida. "Ears to the World", a wireless, MP3-based headset, serves as a personal translation device for park guests within the Magic Kingdom, EPCOT, Disney MGM-Studios and Disney's Animal Kingdom. The translator utilizes our patented MOS as well as our hardware and firmware. We expect additional orders to be placed in order to accommodate a greater number of guests and language selections within the Florida parks and for use at other Disney properties around the world. The platform developed for ETTW can easily be adapted for other uses and markets. While Disney ------ the five languages, there are no limitations to the number of ----------- and dialects the device can support. Imagine going to the Louvre in Paris and receiving information on history about each piece of artwork and its artist; or visiting a national park or historic site and gleaning insights about each landmark and its relevance to history. This platform also has the ability to span(?) well beyond the ----- paths of national monuments and exhibits.

Perhaps you fancy a trip to Hong Kong - these headsets, coupled with the wireless system, would allow tourists from any nation to navigate their way from their hotel to Po Lin Monastery or the Cantonese Opera House without having to stop and fumble for directions. And of course, location-based wireless technologies also have the tremendous potential for generating advertising revenues.

The past several years have seen the proliferation of new in-car technologies introduced one component at a time. Integrated and after-market GPS systems are available at a fraction of the price of just 3 years ago. Many of us have fumbled with task of linking our MP3 players to our in-dash car stereos, mostly with disappointing results. XM-Satellite is going head-to-head with Sirius radio; portable DVD players resell for less than $400(?) dollars at the local Target store. And don't forget - along with those DVD screens in the back, little Tommy will want to access his favorite video game which may or may not be little Sally's game of choice. Some car lines even provide a live camera on the back fender to assist in the nasty task of parallel parking that monstrous SUV in a compact-sized space.

And there you have it - there's the future of in-car infotainment ----- (something combination?) of all these applications into a single system.

Presently we are in full production of the E-by-Fuji-10 product that you have heard about for the last several months. Today the product offers multi-codec support, integration into the cars head(?) units, huge capacity, real-time MP3 encoding, five-minute (?) FM write back, and a high-speed connection to the PC.

But what is even more exciting is the potential for this platform. Because of the MOS foundation and the strength of wireless technology, this platform has the ability to service all of the in-car infotainment functions I just described within a single system, providing the future of driving convenience.

While the near future may offer a comprehensive MOS-powered infotainment driving experience, today we are targeting automobile manufacturers ---- to give options and integrations of our platform in its current embodiment. We are also working to penetrate the after-market audio manufacturers. By working with these outlets early on, with the integration of our in-car infotainment system, we are well-positioned to proffer(?) second, third, and fourth generations of our product.

Each of our platforms has a direct application for wireless technology. The next generation of infotainment device is expected to enable the system in your car to communicate with your desk-top PC, and transfer content wirelessly. Future generations of the product could benefit by receiving automotive manufacturer diagnostic information. In other words, Toyota could communicate directly with your car to determine the time for a regularly-scheduled service, or your appointment software could upload directions for your early morning meeting while you were asleep. The possibilities are literally endless.

802.11 wireless technology has a wide range of applications and possibilities. In addition to integrated 802.11 technology, and for our plan for future devices, EDIG engineers closely monitored the development of other new wireless technologies, including ultra-wide band.

The Odyssey 1000 digital audio player was our first product to launch this year. The initial 2.5 inch version featured a broad range of functionality that set itself apart from competitors. More importantly, the O1K has served as a model for our OEM partners, demonstrating the full range of features that can be integrated using MOS. The stylish taste, scroll wheel, intuitive user interface that are characteristic of the O1K are easily recognizable in the first OEM branded 1.8 inch version of our platform, that was announced last month.

With the introduction of the 1.8 inch version of the Odyssey platform for an OEM client with the branding power (brand new?) to move volume and further opportunities in this area, we have decided to discontinue retail sales of the EDIG-branded O1K as well as all other EDIG-branded devices. We will continue to support sales of the players through today, and to honor all outstanding warranties.

The mission of the EDIG-branded O1K to serve as a model for the strength and flexibility of our MOS core has been realized through this latest release of the OEM-branded 1.8 inch version. We are working with, and continue to seek new OEM customers for this platform to provide a comprehensive, customized, digital music solution to brands not yet in the market, or brands looking to enhance their existing products.

EDIG's first commercial release of a video on-demand personal video platform has enjoyed tremendous initial success through APS' Digeplayer branding and distribution through Alaska Airlines. The first units shipped this fall, and were in the hands of select Alaska Airlines passengers in October. The units are loaded with content from partners such as 20th Century Fox and ???? The large screen delivers better-than-DVD quality video, a key barrier to entry of others (?) evaluating opportunities in the market. APS continues to aggressively market the Digeplayer and is in the active negotiations with many of the world's leading and emerging airlines and other companies within the travel industry.

While EDIG is certainly very proud of the expected commercial success of the Digeplayer, we remain active in our pursuit of other OEMs looking for personal video platforms for their own branded purposes. As you will see in the slides(?), there are many opportunities for new and next-generation applications of this device as well as a highly lucrative revenue opportunity.

APS' Digeplayer is just one illustration of the flexibility of this platform. Opportunities for B2B sales include airlines, car rental agencies, cruise lines, franchise sports teams, and field repair technicians. Imagine the Maytag repairman coming to your hometo fix your 'frig, and all the schematics of every single model ever made are on his personal video device.

The Motion Picture Association of America recently imposed, and then modified a ban on "screeners" (?) - DVD's of a film, provided to the Academy for viewing. The concern has been over the security of the DVD screeners, and the electronic distribution of copyrighted content. Providing each voting Academy member with and EDIG personal video device with the capacity to store and play each motion picture, documentary and short film would ensure the mobility required by the voters, as well as the security sought by the MPAA.

EDIG's personal video platform also has applications within the professional services field, offering doctors, dentists, hospitals and emergency personnel access to critical information - all in a device weighing less than 2 pounds.

Many of you have expressed interest in learning about direct to consumer applications for EDIG's personal video platform. I'd like to outline for you a very promising model for this market. Imagine premium content providers such as 20th Century Fox or Paramount could prepare their content for digital distribution to movie outlet locations such as Hollywood Video, Blockbuster, Walmart and others. These movie outlets could supply kiosks fitted with connections for the devices allowing consumers to download any content, any time they want, and never experience the disappointment of out-of-stock (?) again.

According to Video Business Magazine - consumers spent 10.2 billion dollars to rent and buy videos during the first half of this year - a 16%(?) gain compared to the first half of 2002. Of that 10 billion dollars, 7 billion was spent on the rental of DVDs, indicating the readinessof consumers to adopt advaned digital technologies over the VHS format.

EDIG is well positioned to provide a wide range of digital video solutions for OEM partners, and because the foundation work has been completed, the cost of development will continue to shrink. Because of the flexibility of MOS, and the insatiable consumer demand for portable devices, EDIG is well positioned to expand relationships with existing OEMs and to enter into partnerships with new OEMs to create devices to address multiple needs, to create devices to service the audio and video demand for the home, the car, the office, commercial transportation, virtually every aspect of portable entertainment and infotainment domains.

EDIG is presently in advanced negotiations with 2 major OEMs on separate projects of enormous potential each of which seeks to combine two or more of our existing platforms to advance the convergence of these devices.

These opportunities require EDIG to secure additional funding to strengthen our financial position.

All of our platforms and projects have Home-Run potential. Because these products require different timeframes to evaluate their success, some results will be evident within weeks, while others, because of their niche markets, may take longer.

EDIG has enhanced MOS from the digital voice technology into a multi-faceted digital audio, video and wireless tool capable of servicing many needs in many industries, for many customers.

Former President Ronald Reagan said, "there are no such things as limits to growth, because there are no limits on the capacity for intelligence and imagination."

I would like to postulate that there are no limits on technology.

Thank you so much for your time.

Fred Falk.

End of Part Two.