Yesterday, e.Digital Corp. reported financial results for their third quarter of fiscal 2011 ended December 31, 2010. The net loss attributable to common stockholders was $314,000, or $(0.00) per share, for the third quarter of fiscal 2011, which was less than 2010′s third quarter loss of $360,000, also $(0.00) per share.

For the third quarter of fiscal 2011, revenues totaled $141,000 in comparison to $284,000 for the third quarter of 2010. Gross profit was $46,000, 32 percent of revenues, compared to $104,000, 37 percent of revenues, for 2010. Operating expenses declined to $363,000 for the most recent third quarter compared to $688,000 for the prior year’s third quarter.

The loss attributable to common stockholders for the first nine months of fiscal 2011 was $967,000, or $(0.00) per share, compared to $680,000, or $(0.00) per share, for the same nine month period last fiscal year. For the first nine months of fiscal 2011, revenues totaled $891,000, which was a decrease from $2.0 million for the comparable period in fiscal 2010.

The prior year included $1.25 million in licensing fees from the Company’s Flash-R™ patent portfolio compared to $31,000 for the most recent nine month period. Gross profit was $309,000, 35 percent of revenues. This is in comparison to $1.1 million, 57 percent of revenues, for the prior year. Operating expenses declined to $1.2 million for the most recent nine months compared to $1.7 million for the 2010 period.

e.Digital Corp. continues to pursue patent enforcement activities. A Markman hearing (patent claims construction hearing) for the Company’s second round enforcement action was held on January 28, 2011. A successful outcome could assist patent licensing efforts. Similarly, a successful determination from the United States Patent and Trademark Office (USPTO) patent reexamination would assist e.Digital Corp. in defending challenges to the validity of the Company’s flash memory related patents.

The Company, with a goal of reducing costs and aligning to a traditional schedule, is now planning an annual meeting in the Summer following the release of their 2011 annual report for the fiscal year ending March 31, 2011. To bridge to the new meeting schedule they will hold a shareholder conference call for early March to update on fiscal 2011 activity and plans for fiscal 2012.

Mr. Fred Falk, President and Chief Executive Officer of e.Digital Corporation, said, “Our results are highly dependent on the timing and amount of patent license revenues and related margins. We have an outstanding complaint against sixteen electronics manufacturers, and the timing and amount of any future patent licenses is uncertain. Current year reductions in operating expenses reflect management cost controls, reductions of certain professional and public company costs and reduced non-cash compensation costs.”

Mr. Falk concluded, “We recently reorganized research and development personnel to develop new technologies in the areas of communication networks and digital data distribution. Our goal is to expand our portfolio of intellectual property and continue to exploit our long record of technology innovation. We will provide more details on our new IP during the March conference.”

Headquartered in San Diego, California, e.Digital Corporation is a leading innovator of dedicated portable in flight entertainment systems. More than 30 airlines have made dedicated portable systems powered by e.Digital technology their in-flight entertainment choice. The Company also owns and is monetizing their Flash-R™ portfolio of flash memory-related patents. They were the first company to develop, patent, and productize fundamental techniques that opened the door to the widespread use of flash memory in many of today’s popular electronic products.

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