eDigital Reports Third Quarter Results

SAN DIEGO, CA--(Marketwired - February 11, 2016) - e.Digital Corporation (OTCQB: EDIG), a long standing source of innovation and future-defining patented technologies, today announced results for the third quarter of fiscal year 2016, ended December 31, 2015.

Recent Highlights:

• New Website and Branding - Designed with a fresh new look, eDigital recently launched a new website allowing visitors to more easily browse Company information, review eDigital's history and learn about new technology innovations. The website also displays the Company's new logo. The new site is available at www.edigital.com
• Nunchi ^® Technology Enforcement - The Nunchi portfolio consists of eight patents and two pending patent applications. Nunchi technology encompasses the drawing together of data from fixed or mobile sensors and uniquely using it to recognize, understand and affect interactions. The Company has filed patent infringement lawsuits against companies in the connected home security market, including Dropcam, Arcsoft/Simplicam, Oco, Mivatek, MyFox, iSmart Alarm, iBaby and Nest, and continues to identify companies that it believes infringe this technology. During the third fiscal quarter of 2016, the United States District Court for the Northern District of California issued a claim construction order eDigital believes favorable in the Company's case against DropCam.
• microSignet ™ Technology - The Company owns intellectual property in the area of data protection called microSignet. It includes one granted patent and a pending patent application. Unlike other security solutions, microSignet utilizes the internal physical characteristics of semiconductors to establish a 'fingerprint' which uniquely identifies a given piece of hardware, such as a smart phone or desktop computer, that can be used for device authentication, or to bind valuable data to a particular device. The Company is seeking to license this technology and develop the technology through others.
• Synap ™ - The Company has one pending patent application in an exciting new area of secure communications. Synap technology enables applications to achieve the highest levels of security; protecting user communications, user data, online transactions, and physical security. Using sensor technology, it allows separate devices to independently construct large volumes of the same secure data internally, without ever having to exchange secure data between the devices. One potential application of this unique technology allows users to fully secure communications. Central to this new technology are mechanisms to independently create common, secure data between devices.

"Due to changes in the patent laws over the last few years, our Nunchi patents are being challenged earlier in the litigation process," said Fred Falk, president & CEO of eDigital. "A common maneuver is for defendants to file a petition for Inter Partes Review (IPR) of the asserted patents which, in our Dropcam case, the United States Patent Trial and Appeal Board (PTAB) has granted. As a result, the PTAB will review the patents. If the patents are upheld, we believe the patents will be stronger against other defendants considering IPR challenges. Aside from the IPR activity, we are in early negotiations with a number of the other defendants and are confident regarding the prospects for mutually acceptable license settlements," Falk concluded.

Third Quarter Fiscal 2016 Financial Summary:

The Company reported net loss of $363,869 or $(0.00) per share, for the third quarter of fiscal 2016 compared to a net income of $275,741 or $0.00 per share for the prior year's third quarter. There were no revenues for the third quarter of fiscal 2016 compared to revenues of $1,121,495 for the third quarter of the prior year. The prior year included patent license revenues of $1,078,500. Operating expenses decreased to $364,669 from $814,404 for the prior year's comparable quarter primarily due to decreased patent-related legal costs.

For the nine months ended December 31, 2015 the Company reported net loss of $838,526 or $(0.00) per share on revenues of $709,531. For the comparable nine months of the prior year the Company reported a net income of $133,324 or $0.00 per share on revenues of $2,198,745. The Company's results are impacted by the timing and amount of license fees.

About e.Digital Corporation: For more than 27 years, e.Digital's ideas and inventions have impacted the evolution of consumer products. Today, e.Digital innovations, including its Flash-R™ portfolio of flash memory-related patents, and Nunchi^® portfolio, are essential to many portable consumer electronic products. For more information about e.Digital, please visit: www.edigital.com.

Safe Harbor statement under the Private Securities Litigation Reform of 1995: This press release includes forward-looking information and statements. Except for historical information contained in this release, statements in this release may constitute forward-looking statements regarding assumptions, projections, expectations, targets, intentions or beliefs about future events that are based on management's belief, as well as assumptions made by, and information currently available to, management. While the Company believes that expectations are based upon reasonable assumptions, there can be no assurances that goals and strategy will be realized. Numerous factors, including risks and uncertainties, may affect actual results and may cause results to differ materially from those expressed in forward-looking statements made by the Company or on its behalf. Some of these factors include the substantial uncertainties inherent in pursuing patent enforcement activities including, but not limited to the risks and costs of litigation and support activities, the timing and amount of settlements/licenses if any, the acceptance of existing and future products and technologies, the difficulty of commercializing and protecting new technology such as the Company's Nunchi, microSignet and other technologies, the impact of competitive products, technologies and pricing, general business and economic conditions, and other factors detailed in the Company's Annual Report on Form 10-K and other periodic reports filed with the SEC. Except as required by law, the Company specifically disclaims any obligation to update or revise any forward-looking statement whether as a result of new information, future developments or otherwise.