e.Digital and Liquid Audio Join Forces to Enhance Consumers' Internet Music Experience; Liquid Audio to Provide Liquid Player for New e.Digital Music Web Site

Business Wire, Sept 17, 2002

Business Editors & High-Tech Writers

SAN DIEGO--(BUSINESS WIRE)--Sept. 17, 2002

e.Digital Corp. (OTC:EDIG) today announced that it will use Liquid Audio's music player on its soon-to-be-launched music Web site.

Using Liquid Player software, e.Digital's customers will be able to stream, download and purchase tracks from a wide variety of artists in many leading formats, including Liquid and Windows Media(TM) Audio (WMA).

"Liquid Audio has the largest catalog of secure digital downloads available on the Internet today. They will provide our customers with a one-stop-shop for playing, downloading, and purchasing digital music from its vast catalog featuring 200,000 tracks and content from more than 1,900 record labels," said Bryan Jones, Vice President of Broadband Entertainment for e.Digital.

"Our listeners will be able to download thousands of tracks, along with album art, liner notes, and other metadata using Liquid Player software. Our partnership with Liquid will also enable us to share e-commerce opportunities by leveraging their massive music collection," Jones added.

"Liquid Audio's technology makes it easy for consumers to download and burn their favorite music digitally," said Gerry Kearby, president and CEO of Liquid Audio Inc. "Through our partnership with e.Digital we will be able to provide their avid music fans with access to volumes of content for their portable e.Digital digital audio players."

Liquid Audio provides software and services for Internet music delivery. Its solutions enable musicians, record labels, Web sites, music retailers and other businesses to publish, distribute and sell music online with copy protection and copyright management.

About Liquid Audio Inc.

Liquid Audio Inc. is a leading provider of software, infrastructure and services for the secure digital delivery of media over the Internet. The Liquid Audio solution gives content owners, Web sites and companies the ability to publish, syndicate and securely sell digital media online with copy protection and copyright management. Using the Liquid(TM) Player software, available for free download at www.liquidaudio.com, consumers can preview and purchase downloadable music from hundreds of affiliate Web sites in the Liquid Music Network(TM).

About e.Digital

e.Digital Corp. designs, licenses, brands, manufactures and sells digital audio products and technologies. The company's trademarked digital audio players include the MXP(TM) 100, Treo(TM) portable digital jukebox line, Silhouette(TM) ultra-slim MP3-CD player, and Odyssey(TM) line of flash- and hard disk drive-based players. The company also offers an engineering partnership for the world's leading electronics companies to link portable digital devices to PCs and the Internet. e.Digital develops and markets to consumer electronics manufacturers complete end-to-end solutions for delivery and management of open and secure digital media with a focus on music, voice and video players/recorders, and automotive infotainment and telematics systems. Other applications for e.Digital's technology include 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(TM) file management system to custom software and hardware development, industrial design, and manufacturing services. For more information on the company, please visit www.edig.com. To shop at the e.Digital online store, please visit www.edigital-store.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. Factors that may affect the Company's businesses, financial condition and operating results include future products and results, technological shifts, potential technical difficulties that could delay new products and services, competition, pricing pressures, the uncertainty of market acceptance of new products and services by OEM's and end-user customers, effects of changes in the economy, consumer spending, the ability of the Company to maintain relationships with strategic partners and suppliers, the ability of the Company to timely and successfully develop, maintain and protect its technology and product and service offerings and execute operationally, the ability of the company to attract corporate financing and the ability of the Company to attract and retain qualified personnel. These factors may also include, but are not limited to, general market conditions, the Company's ability to develop new products to meet market demand, the Company's ability to maintain cost controls, the mix of products and services the Company's customers require and the effects of natural disasters, international conflicts and other events beyond the Company's control. 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.