e.Digital Raises Over $1.2 Million in Financing

11/24/2003 - e.Digital Corporation (OTC Bulletin Board: EDIG announced that it received over $1.2 million through the sale of Series E Convertible Preferred shares and warrants to selected institutional and accredited investors.

“This funding strengthens our financial position, providing an essential ingredient necessary for closing significant new OEM business,” said Fred Falk, chief executive officer and president of e.Digital Corporation. “We will provide greater detail on the timing and importance of this financing at our December 4, 2003 shareholders meeting.”

The stated dollar amount of Series E Stock, is convertible into fully paid and nonassessable shares of Common Stock at a conversion price of $0.45 per share which is fixed for the first 90 days following the original issue date, and commencing 90 days following the original issue date, the conversion price shall equal the lower of (i) $0.45 and (ii) 85% of the average of the volume weighted average price per share during the ten consecutive trading days immediately preceding the conversion date. However, the conversion price shall not be below $0.19 except as may be subsequently modified as a consequence of any future issuance by the Company of common stock priced below $0.19 during the term of the Series E Stock. The Series E Stock shall be subject to automatic conversion on November 19, 2005 subject to certain conditions. At November 19, 2003, the Series E Stock was convertible into approximately 2,837,778 shares of Common Stock.

The Company also issued to the investors, Series A Warrants to purchase 1,712,333 shares of Common Stock at $0.60 per share until May 18, 2004 and Series B Warrants to purchase 856,166 shares of Common Stock at $1.00 per share until November 18, 2005. If exercised, the warrants could generate up to an additional $1.8 million in proceeds to e.Digital.

The common stock and warrants to purchase common stock have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States without a registration statement or exemption from registration. The company has agreed to file a registration statement on the securities. The company's Form 8-K, filing today with the SEC, provides a description of this transaction.

About e.Digital
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 1000TM 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 MicroOSTM file management system to custom software and hardware development, industrial design, and manufacturing services. For more information on the company, please visit 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.

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