SmarTire Taking Steps To Strengthen Financial Position

    RICHMOND, British Columbia--Aug. 5, 2002-- SmarTire Systems Inc. , a leading developer of tire pressure and temperature monitoring technology, today announced that with the assistance of its financial advisor, H.C. Wainwright Co. Inc., the Company has developed and is implementing a financial plan that has been designed to strengthen its financial position in an extremely difficult financing environment. As part of that financial plan, SmarTire has received certain postponements in respect to debt repayments.
    "SmarTire is well positioned strategically, competitively and technologically to take full advantage of the increasing demands of the tire and automotive industries for tire monitoring technologies and products," says Robert Rudman, President and Chief Executive Officer of SmarTire. "However, from a financial resources standpoint, we must build a stronger base. Our financial plan has been designed to achieve that objective and we are making progress despite current market conditions."
    SmarTire is a pioneer and market leader in the development of direct measurement tire monitoring technology for all sectors of the automotive and transportation industries. With the National Highway Traffic Safety Administration (NHTSA) rulemaking that requires the installation of tire pressure monitoring systems in all passenger vehicles and light trucks beginning November 1, 2003, there is substantial market potential for SmarTire technologies and products.
    Incorporated in 1987, SmarTire is a public company with offices in Canada and the United Kingdom. Additional information can be found at www.smartire.com.

    Jeff Finkelstein, Controller

    This news release may include statements about expected future events and/or financial results that are forward-looking in nature and subject to risks and uncertainties. Forward-looking statements in this release include, but are not limited to, the anticipated demand for tire monitoring technology, sales of SmarTire's products and technology to original equipment manufacturers, the size of the market, the impact and scope of the new United States legislation, and the technical uncertainty of future products. It is important to note that actual outcomes and the Company's actual results could differ materially from those in such forward-looking statements. Factors that could cause actual results to differ materially include general factors such as insufficient investor interest in the Company's securities, the impact of competitive products and pricing and general economic conditions as they affect the Company's customers, and specific risks such as the uncertainty of the requirements demanded and timing specified by U.S. government, reliance on third party manufacturers to product SmarTire products and technology, and, the Company's ability to source product components in timely manner. Readers should also refer to the risk disclosures outlined in the Company's annual report of Form 10-KSB for the last completed fiscal year filed with the SEC.