Compositech Ltd. Reports Fourth Quarter/Full Year Results; Includes Restructuring Charges; Reports Progress On Licensing Program.

Business Editors

HAUPPAUGE, N.Y.--(BUSINESS WIRE)--March 31, 2000

Compositech Ltd. (Nasdaq:CTEK), a developer of high tech laminates for the printed circuit board industry, today reported results for the fourth quarter and year ended December 31, 1999.

Total revenues for the fourth quarter were $244,775, compared with $67,557 for the same 1998 period. Net loss for the quarter, which included restructuring charges of $7,357,604, was $10,060,040, compared with $1,350,278 for the same 1998 period. After providing for non-cash preferred stock dividends of $7,200 in 1999 and $39,356 in 1998, basic and diluted loss per share attributable to common stockholders was 60 cents for the 1999 quarter, compared with 11 cents for the 1998 quarter. Net loss included non-cash items of $8,503,388 in 1999 and $46,256 in 1998.

Total revenues for the year were $794,988, compared with $414,396 in 1998. Included in revenues was amortization of licensing income of $58,099 in 1999 and $64,284 in 1998. Net loss for the year including the restructuring charges of $7,357,604 was $16,394,897, compared with $5,810,595 for 1998. After providing for non-cash preferred stock dividends of $22,892 in 1999 and $406,686 in 1998, basic and diluted loss per share attributable to common stockholders was $1.03 in 1999 and 54 cents in 1998. Net loss included non-cash items of $10,184,525 in 1999 and $1,002,185 in 1998.

The Company said the 1999 restructuring charges of $7,357,604 consisted of an impairment loss of $3,289,879 representing the reduction in the carrying value of property and equipment related to the suspension of manufacturing operations, a loss of $3,793,596 on the termination of the Company's Canadian joint venture and other items of $274,129 relating to the suspension of manufacturing operations. In addition, $153,068 of inventory write-downs was charged to manufacturing expenses in connection with the suspension of manufacturing operations.

"The 1999 results reflect a basic change in our corporate strategy," stated Compositech Chairman and CEO Jonas Medney. "When we suspended manufacturing operations in December 1999 due to a lack of adequate financing, we decided to refocus our resources on locating suitable licensees, joint venture partners or purchasers for our technology. We are also exploring potential mergers and acquisitions or other strategic transactions. We have substantially reduced our overhead and are concentrating on the licensing program that we formally launched this month. The enthusiastic endorsements we received from Lucent Technologies (NYSE: LU), Sun Microsystems (NASDAQ: SUNW), Teradyne (NYSE: TER) and Tyco (NYSE: TYC), among others, prove the value of our CL200+ laminates to a rapidly growing high-tech market," he added. "They have been very helpful in approaching licensing candidates, which we have done with the assistance of the recently engaged International Licensing Network. To date, we have begun licensing discussions with six potential licensees, specifically four laminate manufacturers and two suppliers to the industry. We are quite encouraged with the interest shown and hope to conclude a transaction in the near future," Medney concluded.

"We have reduced our staff level from its peak of 124 employees required to support our manufacturing operations down to seven required to support our licensing program," reported Compositech CFO Samuel S. Gross. "The seven employees include our key technology executives who are supplemented by consultants on call. This has reduced our operating cash requirement to approximately $120,000 a month, which we have been funding through private stock placements and warrant exercises. However, we are negotiating for additional required funding to satisfy existing liabilities and cover our reduced overhead until sufficient revenues are generated from our licensing program. We are also pursuing mergers to assist in obtaining funding," Gross added.

Compositech Ltd. has developed innovative and superior copper-clad and fiberglass epoxy laminates used to make printed circuit boards, which are essential components of personal computers, workstations, data communications, Internet servers and telecommunications equipment.

Compositech(TM) and CL200+(TM) are trademarks of Compositech Ltd.

The statements made in this press release contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934 that involve a number of risks and uncertainties. Actual events or results may differ from the Company's expectations. In addition to the matters described in this press release, risk factors listed from time to time in the Company's SEC reports and filings, including, but not limited to, its report on Form 10-KSB for the year ended December 31, 1999, may affect the results achieved by the Company.

           COMPOSITECH LTD. FINANCIAL HIGHLIGHTS (Unaudited)

                For the Three Months Ended    For the Year Ended
                  12/31/99    12/31/98       12/31/99     12/31/98

Revenues       $    244,775  $     67,557  $    794,988  $   414,396

Restructuring
 (charges)     $ (7,357,604)               $ (7,357,604)

Net (loss)     $(10,060,040) $ (1,350,278) $(16,394,897) $(5,810,595)

(Loss) per
 common share
 basic and
 diluted       $      (0.59) $      (0.11) $      (1.03) $     (0.54)

Shares used in
 computing net
 (loss) per
 share           16,889,935    12,710,567    15,986,153   11,612,001