Covol Technologies Inc. Announces Letter of Intent for Proposed Transactions.

LEHI, Utah--(BUSINESS WIRE)--June, 23 1999--

Covol Technologies Inc., (NASDAQ:CVOL), Wednesday announced that it has entered into two non-binding letters of intent with an affiliate of a major U.S. electric utility company with respect to certain proposed transactions.

If fully consummated, the transactions would result in the sale of the company's synthetic fuel business, including four company-owned facilities and royalty interests from third-party licensees, and the restructuring of the company.

The proposed transactions would allow the company's stockholders to realize value above the current market price of the company's stock by selling its synthetic fuel business, and yet, allow its stockholders to continue to participate in the opportunities afforded by the company's non-Section 29 intellectual property rights.

Brent Cook, Covol's President, said "We believe that the primary challenge facing the successful realization of the value created from Covol's synthetic fuel facilities and its royalty interests is the marketing of the end-product.

"The proposed transactions address this issue by aligning the interests of the owners of the synthetic fuel facilities, the holders of the royalty interests and the consumers of coal and synthetic fuels derived from coal. Electric utilities consume approximately 900 million tons of coal annually. The capacity of Covol's owned and licensed facilities is approximately thirteen million tons."

Taken together, the transactions contemplated by the two letters of intent propose the following: -0-

(a)  sale of the Commonwealth/River Hill facility in late July or
     early August for $22 million, $4 million of which will be
     escrowed subject to achievement of certain performance
     milestones;
(b)  sale of the Mountaineer Synfuel, Pocahontas Synfuel, and the
     Carbon Synfuel facilities in the early fall;
(c)  transfer of the company's non-Section 29 intellectual property
     rights, cash and certain other assets owned by Covol to a new
     wholly owned subsidiary, ownership of which would be either
     spun-off to existing stockholders or made available to them in a
     rights or exchange offer; and
(d)  acquisition of Covol in a cash merger.

Under the letters of intent, the sale of the company's Commonwealth/River Hill Synfuel facility is not dependent on the successful completion of the remainder of the transactions.

In the event that the transactions described above are consummated, the company estimates based on tentative valuations that the aggregate amount of cash to be received by the company's equity holders would be approximately $150 to $180 million.

These valuations are subject to validation studies and to further negotiation and could change. Currently, the company has outstanding approximately 12,500,000 common shares, preferred stock convertible into approximately 2,338,000 common shares, and options and warrants exercisable at varying prices into an aggregate of approximately 6,554,000 common shares.

The letters of intent executed by Covol are non-binding. Among other contingencies to consummation of each of the proposed transactions are; purchaser's satisfactory completion of due diligence, successful negotiation of definitive agreements (including price), applicable governmental approvals, and, as to other than the Commonwealth/River Hill facility sale, Covol stockholder approval.

In addition, the letter of intent covering the transactions described in paragraphs (b) through (d) above requires the parties to select and reach agreement with at least two additional purchasers in order for such transaction to go forward.

Kirk A. Benson, Covol's Chief Executive Officer and Chairman of the Board, stated, "We believe that these transactions present the opportunity for stockholders both to receive compensation from the Company's synthetic fuel endeavors and to invest in Covol's emerging engineered resources technologies and applications.

"While we are cautiously optimistic about these transactions, there is no assurance that any of the transactions will be consummated."

Covol is a technology licensing company which engineers industrial waste and other by-products into value-added fuels and resources.

Statements in this news release that relate to future plans, possible transactions, or projected valuations are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including any statement with respect to anticipated products to be produced using Covol's technology and Covol's strategy. Such statements are subject to risks and uncertainties that could cause actual results to differ materially.

Actual results may differ from such forward-looking statements as a result of a number of factors, including but not limited to the ability to successfully negotiate terms and consummate the proposed transactions described above or otherwise successfully market the synfuel facilities, ability to comply with loan covenants which it has made, ability of the facilities to generate royalties, ability to obtain necessary capital or financing, commercial viability of technologies, availability of natural resources and suitable raw materials, ability to achieve expected production levels at the synthetic fuel facilities, ability to market synthetic fuel produced, market penetration by competing technologies, general economic factors of the appropriate industry, the company's ability to continue to find suitable partners and licensees, and the company's ability to locate appropriate sites for production facilities.