Microsoft-Compatible Plug-In from Stealth MediaLabs, Inc. Can Stealthily Embed Credit Card Numbers in Copied Music.

Business Editors

CHICAGO--(BUSINESS WIRE)--Oct. 3, 2002

This week's NASDAQ debut firm raises privacy issues

How many unpaid copies of music would you circulate if each contained your own credit card number? That's the question being asked today, as Chicago-based Stealth MediaLabs, Inc. (NASDAQ:SMLA) debuts this week on NASDAQ.

Built upon a new Microsoft Windows Media-compatible technology developed by researchers at the University of Miami; the StealthChannel(TM) is capable of stealthily embedding up to 20 kb/s of data into almost any digital audio signal. Embedded data can be anything, from images to text to credit card numbers, if desired by the copyright owner.

Stealth foresees considerable demand for applications that discourage mass duplication of pirated music and movies, while perhaps also embedding valuable digital rewards. "Carrots are more effective than sticks," said CEO Howard Leventhal. "All of the music copy prevention mechanisms have fallen apart, because people reject the idea of being punished. Our technology promises a method of dis-incenting copying, while at the same time delivering hidden, valuable digital goodies if copies are made in an authorized way." Such goodies may include valuable digital objects like electronic discount coupons for album purchases, free movie tickets, free introductory chapters of an e-book or the first few levels of a new video game, for example.

The company is building a StealthChannel decoder plug-in for use with the new Windows Media Player 9 series from Microsoft (NASDAQ:MSFT). By contracting with music labels to encode high demand free goodies into their products, Stealth foresees considerable willingness among consumers to accept this method of stamping the origin of copies into the copies themselves.

In most cases, data hidden in the StealthChannel can be embedded without increasing filesize. Patent applications have been filed leveraging a breakthrough in the obscure science of steganography. The StealthChannel was developed by researchers Alexander Iliev and Dr. Michael Scordilis of the University of Miami.

Stealth MediaLabs, Inc., backed by technology broker UTEK Corp (AMEX:UTK), European institutional investors including Lemanik Private Equity Fund, and Banca delle Svizzera Italiana, debuts on NASDAQ this week under the symbol SMLA. The company's web address is: www.stealthmedialabs.com. See Safe Harbor disclosure at http://www.stealthmedialabs.com/legals.