DaimlerChrysler And Citotech To Develop Improved Engine Starter/re-starter Technology

    VANCOUVER, Aug. 2 - CITOTECH SYSTEMS INC. (CDNX-CTE)
Citotech Systems Inc. ("Citotech") is pleased to announce that it has entered
into a Proprietary Rights Agreement (the "Proprietary Rights Agreement") with
DaimlerChrysler Corporation ("DaimlerChrysler") pursuant to which Citotech and
DaimlerChrysler will cooperate in a program to develop automotive engine
starter/re-starter technology that could reduce the cost and weight of future
vehicles, to provide increased function and improved fuel economy and to
reduce emissions.

    Pursuant to the Proprietary Rights Agreement, Citotech will grant to
DaimlerChrysler certain intellectual property rights with respect to the
proprietary information of Citotech, including the Microstart Engine Starting
System ("Microstart").  Accordingly, Citotech  entered into a License
Agreement with the owner of the Intellectual Property which authorizes
Citotech to enter into the Proprietary Rights Agreement.
    
Microstart is both an apparatus and a method for starting an internal
combustion engine. It eliminates the need for a starting motor/flywheel
arrangement and significantly reduces the size and power supply required from
the vehicle battery. Engine starts with this new system will not require
battery power for engine cranking. Microstart technology would allow for the
automotive engine to be turned off at idle and when the vehicle is stopped
resulting in a fuel economy improvement. The engine will restart effortlessly
and the system will operate in a manner totally transparent to the driver.
    
Citotech is continuing to work towards the acquisition (the "Proposed
Transaction") of the Intellectual Property.  Citotech continues to engage in
discussions with the Canadian Venture Exchange and the British Columbia
Securities Commission regarding details of the Proposed Transaction. Citotech
is currently proceeding with the preparation of relevant valuation and market
assessments and acting on other recommendations of the regulators.
    
Investors are cautioned that, except as disclosed in the Management
Information Circular to be prepared in connection with Proposed Transaction,
any information released or received with respect to the Proposed Transaction
may not be accurate or complete and should not be relied upon. Trading in
securities of Citotech should be considered highly speculative.
    
The completion of the Proposed Transaction is subject to a number of
conditions, including but not limited to, acceptance by the Canadian Venture
Exchange and disinterested shareholder approval.  The transaction cannot close
until the required shareholder approval is obtained.  There can be no
assurance that the transaction will be completed as proposed or at all.