Advanced Photonix, Inc. Announces Terahertz Development Contract Awarded by the Department of Homeland Security.

ANN ARBOR, Mich. -- Advanced Photonix, Inc.(R) (AMEX: API) today announced that it has been awarded a Phase II Small Business Innovation Research (SBIR) contract from the Department of Homeland Security for approximately $1,000,000 to develop and prototype a flexible terahertz instrument that can be marketed to customers currently utilizing nuclear source gauges.

Nuclear source gauges, such as beta and gamma, are utilized in industrial process monitoring and control, often to measure thickness or mass in paper, plastics, rubber, food stuffs and other materials used in manufacturing and packaging.

A significant security and environmental concern with nuclear gauges is the orphaned status of the radioactive material, which may allow for theft and misuse (e.g. terrorists and dirty bombs) or unintentional environmental contamination. A major benefit of the system is that it is safe and would not require any shielding or radiological safety procedures for installation or use, and would eliminate nuclear disposal issues. The replacement of nuclear gauges would also reduce the cost of licensing and regulatory burdens to both industry and government. According to the Nuclear Regulatory Commission, there were approximately 40,000 general licensees, covering about 580,000 general licensed devices, as of December, 2000. The nuclear gauge industry is estimated to have produced and sold approximately 4100 units in 2005 based on a Census Bureau report.

A successful Phase II program will result in a high-speed terahertz measurement system that outperforms nuclear gauges, has lower lifecycle costs, and, most importantly, leads to the replacement of nuclear gauges. The prototype instrument will be based on the T-Ray 4000[TM] technology platform that will include a suite of sensors intended for specific applications; an intelligent control, analysis and interface unit; and stand-alone gauge software. The Company will own the rights to the developed technology and will be free to commercialize it in both private and/or military markets.

Richard (Rick) Kurtz, Chairman and CEO of API, stated, "This single application within the Non-Destructive Testing market could offer API a significant opportunity in a very large market for both short-term and long-term growth over the next 10 years."

About Advanced Photonix, Inc.

Advanced Photonix, Inc.(R) (AMEX: API) is a leading supplier of optoelectronic semiconductor components and subsystems and terahertz instrumentation to a global OEM customer base. Products include the patented InGaAs high-speed optical receivers in APD and PIN configurations and silicon PIN, large area APD and FILTRODE(R) detector configurations. More information on Advanced Photonix can be found at http://www.advancedphotonix.com.

The information contained herein includes forward looking statements that are based on assumptions that management believes to be reasonable but are subject to inherent uncertainties and risks including, but not limited to, unforeseen technological obstacles which may prevent or slow the development and/or manufacture of new products; potential problems with the integration of the acquired company and its technology and possible inability to achieve expected synergies; obstacles to successfully combining product offerings and lack of customer acceptance of such offerings; limited (or slower than anticipated) customer acceptance of new products which have been and are being developed by the Company; and a decline in the general demand for optoelectronic products.