SmartDisk Announces Plans to Withdraw Follow-On Offering.

Business Editors

NAPLES, Fla.--(BUSINESS WIRE)--June 20, 2000

SmartDisk Corporation (Nasdaq:SMDK), a company whose products simplify the digital lifestyle, today announced it has chosen to withdraw its planned follow-on public offering of 3.9 million shares of common stock.

The Company filed a registration statement on April 20, 2000 with the Securities and Exchange Commission with respect to these shares and has decided to withdraw the offering because of current market conditions.

"We filed the offering to raise additional capital at attractive rates," said Michael S. Battaglia, SmartDisk's President and CEO. "Given the general decline in financial markets since then, we have decided to withdraw the offering. Our company continues to perform very well and our balance sheet remains strong."

Since going public on October 6, 1999, the Company has reported three consecutive quarters of record revenues and operating results.

"Our current cash position and the cash flow we expect from operations will continue to support our growth," said Michael M. Mattingly, Chief Financial Officer. "Given the comprehensive nature of our product line and our track record in hardware and software innovation, we anticipate continued growth in our business."

In March 2000, SmartDisk acquired VST Technologies, Inc., a Boston area-based company that designs, develops, manufactures and markets FireWire and USB-based flash memory readers and high-performance personal storage solutions for PC and Macintosh(R) platforms. Since the acquisition, SmartDisk has announced a number of new products, including the world's first portable FireWire-based 100GB RAID array (Redundant Array of Independent Disks) and the smallest, lightest series of portable hard drives that are both FireWire- and USB-compatible. Since January 2000, SmartDisk has also developed new versions of its FlashPath(TM) floppy disk adapter for Sony's Memory Stick(TM) and SanDisk's MultiMediaCard, and has announced new, patented technology for extending digital music to users of traditional audio cassette players. The product, FlashTrax(TM), resembles a conventional audiocassette but has a slot that accepts a removable flash memory card on which digital audio files are stored. FlashTrax will enable traditional audio cassette players, particularly those installed in automobiles, to play music downloaded from the Internet or copied from an existing CD collection.

About SmartDisk Corporation

SmartDisk designs, develops, manufactures and markets digital connectivity products and personal storage systems that allow consumers to easily access and exchange digital data. The Company is using its proprietary and patented technologies to capitalize on the growing demand for digital applications and increased usage of the Internet. SmartDisk's investors and partners include Apple, Hitachi, IBM, NEC, SanDisk, SCM Microsystems, Sony, Toshiba and others. For more information, go to www.smartdisk.com.

This press release includes statements, which may constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Although SmartDisk Corporation believes the expectations contained in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove correct. These statements may involve risks and uncertainties that could cause actual results to differ materially from the expected results. Such risks include, but are not limited to, our dependence on a limited number of contract and offshore manufacturers, our dependence on OEMs to promote our products, our ability to develop commercially viable products on a timely basis, our ability to generate sufficient cash from operations to support our growth strategies, and other risk factors, all as more fully described in SmartDisk's Registration Statement on Form S-1 and in other reports and periodic filings made from time to time with the Securities and Exchange Commission.

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