JMAR Awarded $1.6 Million Contract to Enhance Performance of Semiconductor Process at DMEA Installation in Sacramento.

Business Editors/High-Tech Writers

SAN DIEGO--(BUSINESS WIRE)--June 11, 2002

JMAR Technologies Inc. (Nasdaq:JMAR), a provider of precision micro and nanotechnology products, announced today that its semiconductor process technology group has been awarded a new contract totaling approximately $1.6 million to enhance the semiconductor fabrication processes installed at the recently re-named Advanced Reconfigurable Manufacturing for Semiconductors (ARMS) foundry owned and operated by the Defense Microelectronics Activity (DMEA) in Sacramento, Calif.

General Dynamics Advanced Information Systems (GDAIS), a prime contractor for DMEA, issued this contract to JMAR as an element of the Defense Department's Advanced Technology Support Program (ATSP). Since the establishment of the ARMS foundry in 1999, JMAR has played a key role in the installation and implementation of that foundry's chip fabrication processes, which include CMOS gate array, EEPROM, and radiation tolerant ultra-thin silicon technologies.

"The contract, which runs until 2003, continues JMAR's long-standing relationships with GDAIS and the DMEA and underscores the company's unique role in sustaining and improving the ARMS foundry, which is an important part of the DMEA operations," said John S. Martinez, Ph.D., JMAR's chairman and CEO. "We believe JMAR's semiconductor process business will continue to grow over time as we support the DMEA's mission and apply the unique access the agency has given us to the ARMS foundry so we can enhance the ARMS foundry processes and leverage their use for commercial product manufacturing."

The DMEA was established by the Department of Defense to utilize the most advanced technologies to extend the life of weapon systems by addressing the problem of microelectronics obsolescence. Its mission and capability is recognized as both unique and critical for the DOD as well as for other branches of the U.S. Government, including NASA, the FAA and the Department of Transportation. DMEA's advanced technology services and facilities are also available on a dual-use basis to the private sector through Cooperative Research and Development Agreements (CRADA).

Under a contract awarded by General Dynamics in 1998, JMAR supported the DMEA in the design, construction and commissioning of the ARMS foundry. The foundry is a custom integrated circuit prototyping facility responsible for producing critical innovative microcircuits to replace obsolete military system electronics, thereby extending the operational lifetimes of those systems for substantial periods with attendant savings to the U.S. Government. JMAR maintains a semiconductor process engineering and operations group adjacent to DMEA's facility in Sacramento. The work under the current contract will be performed on-site by JMAR's Sacramento staff with support from JMAR's Southern California offices.

Dr. Martinez added, "We believe our semiconductor processing group is unique in its ability to provide the DMEA with the highly specialized, long-term support it needs for the evaluation, selection, installation and implementation of these new semiconductor manufacturing processes."

He further commented, "That support, which JMAR has been providing to the DMEA since the inception of the Sacramento foundry, has been instrumental in helping that organization fulfill its increasingly vital role in the nation's defense." He added, "We are very confident that the DMEA's success will bring with it expanded opportunities for JMAR, while at the same time increasing the value of the essential services it provides."

JMAR Technologies Inc., is the world's leading developer and manufacturer of semiconductor X-ray lithography sources and systems and is a leading developer of proprietary advanced laser, X-ray and EUV light sources for other high-value microelectronics applications. In addition, JMAR provides semiconductor process technologies and services and manufactures precision measurement, positioning and light-based manufacturing systems for inspection, repair and fabrication of semiconductors, data storage devices, biomedical and optical communications products.

The statements herein regarding JMAR's expectations for the successful development and introduction of new products and future sales and potential business opportunities are forward-looking statements based on current expectations that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements. These risks include the failure of advanced technology and new intellectual property to perform as predicted or to be fully developed and engineered into a commercial product that is accepted by the marketplace, the failure of pending patents to be issued, competition from alternative lithography technologies, the failure of future orders to materialize as expected, delays in development, shipment or production, parts and labor shortages, cancellation or re-scheduling of orders, the inability to obtain financing when required on terms acceptable to the company, delays in funding of third-party contracts, including the funding of U.S. Government contracts, and the other risks detailed in the company's 2001 Form 10-K and other reports filed with the SEC.