StockerYale Acquires KLOE, S.A. of France for the Development of Integrated Optical Circuits.

Business/Technology Editors

SALEM, N.H.--(BUSINESS WIRE)--March 15, 2001

Next Generation Of Optical Circuits Will Be Designed

Using Proprietary Sol-Gel Technology

StockerYale, Inc., (NASDAQ: STKR), a leading independent provider of phase masks, specialty optical fiber, and specialized illumination products, today announced that it has signed a letter of intent for an undisclosed amount of stock and cash to acquire a majority owned interest in KLOE, S.A. of Montpellier, France. This acquisition will allow the company to design and fabricate integrated optical devices and circuits using KLOE's advanced proprietary sol-gel technology. Because this technology is inherently more efficient and cost effective, it is ideal for the mass production of optical devices used within the framework of fiber optic networks. KLOE's proprietary sol-gel technology promises the development of next generation multiplexing, demultiplexing, advanced micro-optics, and signal processing devices.

In photonics, sol-gel refers to the process of making glass from liquid precursor molecules near room temperature. Linking these molecules together forms a colloidal suspension called a "sol". When the sol is coated as a film, it "gels". From this point, additional processes will transform the gel into a glass compound.

KLOE, S.A. is a French start-up company, founded by Dr. Paul Coudray and Dr. Pascal Etienne, whose origins were from the Universite de Montpellier II, specifically the Centre d'Electronique et de Micro-optoelectronique de Montpellier and the Laboratoire des Verres. Both Dr. Coudray and Dr. Etienne are associated with the CNRS (Centre National de la Recherche Scientifique).

Dr. Coudray has a Ph.D. in optoelectronics and is a world-renowned expert in the micro-fabrication of optical devices. He has written more than 40 scientific papers including 7 invited papers and holds 1 patent. Of late, Dr. Coudray has spent much of his time focused on the design and micro-fabrication of integrated optical circuits.

Dr. Etienne has a Ph.D. in Material Sciences and specializes in the synthesis, deposition and characterization of mineral and hybrid layers elaborated by the sol-gel process. Having written more than 25 scientific papers including 6 invited papers, and the recipient of 1 patent, he is a renowned expert in sol-gel technologies. During his professional career, Dr. Etienne developed layers with specific optical properties and also worked with sol-gel technology during his tenure at the Laboratory of Glasses for the University of Montpellier, a world leader in sol-gel technology.

"Today's manufacturers of arrayed wave-guide gratings, (AWGs), and integrated optics are still unable to reap all of the benefits associated with their fabrication technology because of the complexities associated with their fabrication process," said Alain Beauregard, StockerYale's president & chief technology officer. "KLOE has developed a unique and efficient sol-gel technology allowing the fabrication of optical integrated circuits at very low costs compared to existing methods," added Beauregard. "The acquisition of KLOE compliments our continuing R&D initiatives to design best-in-class specialty optical fiber and related components," Beauregard continued.

The company expects to file numerous patents to protect its advancements in this cutting-edge technology.

"The addition of KLOE's leading-edge technologies and processes coupled with the existing R&D team at StockerYale, will position the company as a market leader in the development of cutting-edge integrated optical devices and related components," said Mark Blodgett, StockerYale's chairman & chief executive officer. "The various technologies currently being developed by the company, whether internally or through our joint ventures and subsidiaries, is representative of the types of technologies that will build the foundation for the low-cost fabrication of optical sub-components in the future," Blodgett added.

About StockerYale

StockerYale, Inc. headquartered in Salem, NH, in an independent designer and manufacturer of optical components used in the building of the all-optical network as well as structured light lasers, specialized fiber optic, fluorescent, and LED illumination products for the machine vision and industrial inspection industries.

StockerYale serves a widely varied, international customer base from its corporate offices in Salem, NH and reinvests a significant percentage of its revenues in R&D to meet the future requirements of its customers. StockerYale has offices and subsidiaries in the U.S., Canada, Europe, and the Pacific Rim.

For more information about StockerYale and their innovative products, contact StockerYale, Inc., 32 Hampshire Rd., Salem, NH, 03079.

Call 800-843-8011; Fax [phone]; or e-mail [e-mail].

Information is also available on the company's web site at www.stockeryale.com

Notice to Investors:

This press release contains forward-looking statements that do not give full weight to all the potential risks, but relate to StockerYale's plans, objectives, and expectations, which are dependent upon a number of factors outside of StockerYale's control including, but not limited to: uncertainty that StockerYale's new optical communications sub-components will gain market acceptance; the risk that one of our competitors could develop and bring to market a technology that is superior to those products that we are currently developing; and StockerYale's ability to capitalize on its significant research and development efforts by bringing to market successful products in the optical communications sub-components markets. Thus, actual results may differ materially. StockerYale undertakes no duty to update any of these forward-looking statements.