Material Technologies, Inc. Signs Letter of Intent to License Its Bridge Monitoring Technologies.

Business Editors

LOS ANGELES--(BUSINESS WIRE)--June 20, 2001

Material Technologies, Inc. (MATECH) (OTCBB:MTEY) today announced that it has entered into a letter of intent (LoI) with SMARTBRIDGES, LLC, a private company, to license its patented technologies for applications on bridges and other highway structures.

Under the terms of the proposed agreement, MATECH will contribute its Electrochemical Fatigue Sensor (EFS(TM)) and Fatigue Fuse (FF(TM)) products to SMARTBRIDGES for incorporation into a complete bridge management system (BMS).

"Assuming we conclude a definitive agreement, this would represent a major breakthrough for MATECH and its shareholders," stated Robert M. Bernstein, chairman of the board and chief executive officer.

He continued: "This LoI provides the basis for an agreement that will not only validate our technology, but will move the Company from the development stage to the commercialization stage. Most importantly, it will represent a potential significant revenue stream, something which MATECH has previously not enjoyed."

One of the most important aspects of the contemplated transaction is that MATECH's technologies will represent only a portion of an installed bridge management system, yet the Company will receive a royalty based on the total value of each system.

With 260,000 of the nation's 600,000+ bridges classified as "deficient" by the Federal Highway Administration (FHWA), bridge monitoring systems being mandated by recent congressional legislation and $60 billion in the Highway Trust Fund by 2002, the total market size is extremely significant.

Under the terms of the letter of intent, SMARTBRIDGES may also invest up to $2 million in MATECH to commercialize MATECH's technologies for bridge applications. In addition, SMARTBRIDGES will have an option to acquire up to 30% of MATECH at a price to be determined.

As part of this transaction, MATECH is also announcing that SMARTBRIDGES has also entered into a letter of intent with Structural Integrity Monitoring Systems (SIMS) negating the previously announced planned acquisition of SIMS by MATECH.

Bernstein explained: "We feel confident that we have negotiated a true win-win scenario: MATECH's shareholders will still reap the benefits of the SIMS technologies through our royalty interest in SMARTBRIDGES.

"The combination of the technologies of MATECH and SIMS is expected to create, for the first time, a system that will report all significant aspects of a bridge's condition in real time. This system will not only enable the determination of appropriate repairs, but also foretell potential catastrophes," Bernstein said.

MATECH is engaged in the research and development of metal fatigue detection, measurement, and monitoring technologies. As such, the Company has developed a suite of devices for the non-destructive testing (NDT) of metal fatigue and a solution for subsequent real-time monitoring of structural integrity. These technologies can be applied in virtually any industry in which metal is a significant structural component -- i.e. bridges, aerospace, oil & gas, construction, shipping, etc.

MATECH has received in excess of $8 million of federal grants to further development of its technologies for use by the U.S. Air Force. Accordingly, with the licensing of its technologies for the bridge application, the Company will focus on its next major market -- aerospace.

SIMS, a privately held company, and its founder, Dr. Malcolm H. Hodge, have spent more than five years developing various proprietary technologies also focused on the non-destructive monitoring of structures.

SMARTBRIDGES is a newly formed entity founded specifically to exploit the combined bridge-related technologies of MATECH and SIMS by financing the commercialization and marketing of the technologies. Its principals are very experienced entrepreneurs who have committed all of the necessary financial and human resources to the success of this venture.

In addition, MATECH's management and technical staff will continue to provide the necessary technical advice to the venture. Dr. Hodge will become a substantial shareholder in SMARTBRIDGES and, thus, will have a vested interest in this endeavor.

"In summary, this is a classic case of people with great products and ideas joining forces with people with capital and expertise to create what we believe will be a very successful business," Bernstein concluded.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Statements in this document looking forward in time involve risks and uncertainties, and therefore actual results may be materially different. Factors that could cause actual results to differ include activity levels in the securities markets and other risk factors, such as customer order rates, cancellations, late delivery of customer components, late system delivery, production delays, dependence upon certain customers, dependencies upon key executives, competition, product liability risk, control by management, and other risks detailed in the applicable U.S. Securities and Exchange Commission requirements.