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Tuesday, 04/20/2004 9:03:46 AM

Tuesday, April 20, 2004 9:03:46 AM

Post# of 93822
FOR IMMEDIATE RELEASE -4/20/04

E.DIGITAL CORPORATION FILES DEMAND FOR ARBITRATION

AGAINST ECLIPSE BY FUJITSU TEN

(San Diego, CA – April 20, 2004) – e.Digital Corporation (OTC: EDIG) today announced it has filed a demand for arbitration against Eclipse by Fujitsu Ten. The filing comes after several weeks of unsuccessful dialogue between the companies, during which time Eclipse by Fujitsu Ten discussed both a buyout and a re-structuring of the signed Supply Agreement. e.Digital is being represented by the San Diego offices of national law firm Gray Cary Ware & Freidenrich LLP in this action.


''In light of the time and resources we have committed to this project, the inadequate and conflicting positions taken by Eclipse by Fujitsu Ten, and their refusal to provide us with their official written position on this product and our contract with them, we have no choice but to file for arbitration as called for under the Supply Agreement,'' said Fred Falk, president and CEO of e.Digital Corporation. ''Within the arbitration demand, we are seeking compensatory and punitive damages of up to $2.5 million plus attorneys fees for numerous breaches of the contract signed by Eclipse by Fujitsu Ten including cancellation of the initial non-cancelable order, breach of the implied covenant of good faith and fair dealing, and misappropriation of our intellectual property, confidential, proprietary and trade secret information.


''While we are disappointed with Eclipse by Fujitsu Ten’s failure to perform under the Supply Agreement, we are confident we will prevail in arbitration,'' added Falk. ''As we reported in today’s Letter to Shareholders, we remain confident in our business and our proprietary technology platforms and we hope to resolve this issue as soon as possible.''


About e.Digital Corporation: e.Digital Corporation partners with leading original equipment manufacturers (OEMs) licensing, designing and providing manufacturing services for OEM-branded digital video, digital audio and wireless products based on the Company’s proprietary MicroOS™-enabled technology platforms. e.Digital specializes in the delivery and management of open and secure digital content through it’s Personal Video, Personal Audio, Automotive, and Wireless 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’s 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 Corporation with the Securities and Exchange Commission (''SEC''). e.Digital Corporation disclaims any intent or obligation to update those forward-looking statements, except as otherwise specifically stated by it.


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

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