ART REPORTS NET LOSS OF $2.0 MILLION IN SECOND QUARTER.

ART Advanced Research Technologies Inc., (ART) (TSE: ARA) has reported that during the second quarter ended October 31, 2000, the company achieved a very significant milestone by completing, on schedule, the Phase II pilot trial for SoftScan, its optical breast imaging device.

For the three months ended October 31, 2000, the company reported that its revenues increased to $16,000 with a net loss of $0.11 per share compared with last year results of a net loss of $0.08 per share.

"We are very pleased with the outcome of the Phase II results, which mark another important milestone for ART." says Paul Bisson, president and chief executive officer of ART. Bisson continues, "The Phase II trial results demonstrate the safety and the technological potential for SoftScan as a breast cancer detection device. The success of the first controlled trial on patients is crucial for the future development of any medical device technology. In addition, the Phase II trial demonstrates the improved comfort level of the SoftScan procedure over traditional X-ray mammography. For a SoftScan image, the breast is simply immobilized within stabilizing plates for the laser scan, and therefore, does not require painful breast compression, as does X-ray mammography."

"We are currently in the process of setting up the design of the protocol for the Phase III trial (Pivotal study) for SoftScan, which will take place in both the United States and Canada. We plan to seek regulatory approval in both countries following the successful completion of the Phase III trial," Bisson said.

The company also said that it achieved several other significant milestones in the quarter, further positioning the company for continued growth. The milestones include:

-- RENEWED PARTNERSHIP WITH GE MEDICAL SYSTEMS. On October 11th 2000, ART announced the renewal of its valuable partnership with GE Medical Systems, a provider of medical imaging equipment. ART will continue to leverage GE's experience as it designs the protocols for the Phase III for SoftScan, which is scheduled to begin in 2001 in Canada and the United States.

-- RADIOLOGIST DR. YAFFE JOINS ART'S SCIENTIFIC ADVISORY COMMITTEE. ART confirms the appointment of Dr. Martin Yaffe as a member of scientific advisory committee. Dr. Yaffe is professor at the Departments of Radiology and Medical Biophysics at the University of Toronto, and senior scientist, Imaging/Bioengineering Research at the Sunnybrook & Women College Health Sciences Centre as well as a consultant physicist for the Ontario Breast Screening Program. Dr. Yaffe is renowned worldwide as one of the top specialists in imaging.

-- CONTINUED MARKETING FOR ART ISIS LINE OF PRODUCTS. With its newly trained sales force now in place, ART continues to expand the customer base for ISIS, its thermal imaging product used to detect anomalies in printed circuit boards. ART is focusing its efforts on potential clients offering the possibility of multi-sites. The company currently has several ISIS systems being tested on location with multinational companies. These companies are very pleased with the equipment and ART believes it should have positive results in the very near future.

-- TECHNOLOGICAL PARTNERSHIP FORMED WITH BAR TEAM. Other ISIS achievements this quarter include a technological partnership with British American Racing (BAR). The partnership covers the use of ART's ISIS inspection technology on high-end automotive industry Formula-1 cars. It also gives BAR direct access to expertise for enhancing the quality and performance of its Formula-1 cars. At the same time, it provides ART with a foothold in an industry with great potential, along with the benefits of exposure as one of the team's official sponsors.

Financial Highlights

For the second quarter, ART reported revenues of US$16,000 versus no revenues in the second quarter of last year, which represents the conversion of one ISIS lease agreement into a final sale. The company's medical product SoftScan is in the development and clinical trial phase. The increase in sales on a year to year basis reflects sales of the ISIS product and does not reflect any sales of SoftScan, which is still in clinical trials.

The company's Research and Development (R&D) investments were US$1.1 million in the second quarter compared to US$628,000 for the same period last year. These investments are mainly for the preparation of Phase III trials for SoftScan and the development of clinical prototype and pre-production units. Currently, 75 % of ART's R&D investments are related to its medical activities and 25 % to its industrial ones.

ART's selling, general and administrative expenses (SG&A) were US$1.1 million in the second quarter compared to US$473,000 for the same period last year. The difference reflects a ramp up in the selling expenses related to the commercialization of the company's ISIS line of products, the increase in its communication activities to better answer the needs of a publicly-traded company, and a non-recurring cost for the retirement of two-cofounders. The increase in SG&A corresponds to the progression of the company and is in accordance with its business plan.

ART reported a net loss of US$2.0 million or $0.11 per share, on weighted average shares outstanding of 17.8 million shares for the second quarter compared with a net loss of US$1.1 million or US$0.08 per share, on weighted average shares outstanding of 12.8 million shares for the same period last year.

At the end of the quarter, ART had US$12.2 million in cash and marketable securities on its balance sheet. ART remains comfortable with its cash position, which the company will use to fund the pivotal trials for SoftScan and efforts associated with the marketing and commercialization of ISIS. At the current cash burn rate, the company believes that current cash and cash equivalents will be sufficient to meet the company's operating requirements until the end of fiscal year 2002, and this without relying on any sales from its industrial products.

About ART

ART Advanced Research Technologies Inc. (ART) is a North American company that is involved in the research, design, development, and marketing of laser and thermal imaging technologies used in the detection of anomalies in the medical and industrial sectors. ART is commercializing its ISIS line of products that are based on ART's thermal imaging technology, and is used to detect defects in assembled printed circuit boards. ART is also in the process of bringing to market an optical imaging device to detect and diagnose breast cancer. The device, known as SoftScan, represents a revolutionary imaging solution for the detection of breast cancer, without the adverse consequences associated with traditional technology. ART is listed on the Toronto Stock Exchange (TSE: ARA).

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