PSI-TEC Demonstrates High-Performing Electro-Optic Structure; Nanotechnology Engineered Molecular Technology Could Displace Silicon as Low-Cost Material of Choice for Next-Generation Internet, Telecom and Optical Computing

Business Wire, April 17, 2006

WILMINGTON, Del. -- PSI-TEC Corp., wholly owned subsidiary of PSI-TEC Holdings Inc. (Pink Sheets:PTHO), announced today the successful testing of a nanotechnology engineered organic material whose molecular electro-optic coefficient is approximately twice that of the industry's highest-performance materials known to PSI-TEC scientists. Electro-optic materials convert high-speed electronic signals into optical (light) signals and are thus the core active component in high-speed fiber-optic telecommunication (e.g. Internet, CATV, HDTV, etc.), satellite communication, radar, and navigational systems in both the civilian and military sectors. High-activity electro-optic materials are also required for the production of next-generation extremely high-speed computational systems and components known as optical interconnects (OICs) and all-optical transistors (AOTs) of primary interest to high-end technology industry leaders.

The PSI-TEC molecular structure is called Perkinamine-NR, and our internal test results exhibited an unprecedented electro-optic performance to our scientists. These test results indicate an approximate doubling of the performance coefficient of previously known highest-performing organic electro-optic molecules known to PSI-TEC scientists. Perkinamine-NR should provide significant reduction in size and cost with respect to future commercial applications. Individual Perkinamine-NR molecules exhibited an approximate 15 percent reduction in physical length over competitive materials, which are expected to create dramatic performance improvements within a significantly reduced nano-molecular package. PSI-TEC scientists consider Perkinamine-NR to be the first prototypical molecular system of at least two entirely new generations of highly active electro-optic plastics.

"Since our days in the intelligence community, we have been working to prove out our theories in electro-optic material design. We believe that our innovations in fundamental molecular architecture may dictate the future of organic nonlinear-optic material construction," stated Frederick Goetz Jr., president of PSI-TEC Corp. "Our current results strongly support the feasibility and extreme potential of our entirely novel molecular design approach."

Until now, the highest-performance electro-optic organic molecules belonged to the CLD/FTC-base class, developed primarily within DARPA (Defense Advanced Research Projects Agency), the University of Washington, Lumera Corp. (NASDAQ:LMRA) and Lockheed Martin (NYSE:LMT). In studies conducted by world-renowned expert, Dr. C.C. Teng, co-inventor of the industry-standard Teng-Man analytical technique for the evaluation of organic electro-optic materials, and one of PSI-TEC's staff scientists, Perkinamine-NR demonstrated a molecular electro-optic coefficient approximately twice that of CLD. (Molecular performance was benchmarked in equal-molar comparative r33 studies with two industry EO standards, DR1 and CLD-1, at the fiber-optic wavelength 1300 nm in standard PMMA guest-host films.) In previous university studies, CLD-derivatives have been shown to exhibit one of the highest electro-optic coefficients of any known material, by some estimates approximately twice that of FTC-based molecular systems (Shi, Y., Zang, C., Zhang H., Bechtel, J., Dalton, J., Robinson, B., Steier, W.; Science 288, 191-121, 7 April 2000). Patent rights to FTC-based molecular architectures are the intellectual property of Lumera Corp. (NASDAQ:LMRA), one of our competitors, and are currently being exploited for commercial application in manufacturing electro-optic devices.

"The performance of Perkinamine-NR is made even more meaningful because these results were obtained from a disciplined, repeatable, low-cost commercial manufacturing process," stated Ron Genova, interim CEO of PSI-TEC Corp. "In regard to the authority of our outstanding experimental results, Dr. Teng's expertise and professional integrity are unassailable in the scientific community. Further, we have negotiated and finalized a contract with a world-class university, in order to perform independent third-party verification of our results." Genova joined PSI-TEC from his former position at JDS Uniphase (JDSU) where he was vice president and general manager of the company's Telecom Modules business unit.

PSI-TEC's molecularly engineered architectures are the basis of its disruptive nanotechnology platform. The PSI-TEC material platform has been shown to be able to exploit either "second-order" electro-optic nonlinear-optic (NLO) effects for future applications in high-speed Internet, telecom, satellite, and military applications or "third-order" effects where one beam of light is used to control another, allowing for future applications in all-optical transistors and switches.

About PSI-TEC

PSI-TEC Corp. is a developmental stage company that engineers next-generation electro-optic plastics. Electro-optic devices convert data from electric signals into optical signals for use in communications systems and in optical interconnects for high-speed data transfer. When commercial process development is completed and performance independently confirmed, PSI-TEC anticipates that electro-optic device manufacturers, such as telecommunications component and systems manufacturers, networking and switching suppliers, semiconductor companies, aerospace companies and government agencies will utilize its proprietary electro-optic technology. For more information regarding PSI-TEC's mission, management and technology visit the company at www.psiteccorp.com.