SmarTire Completes Major Financing

RICHMOND, BC, July 6 -- SmarTire Systems Inc. (OTCBB: SMTR) today announced the Company has completed a major financing with Cornell Capital Partners LP that has resulted in net proceeds of $11 million plus a $160 million Standby Equity Distribution Agreement. The Company issued convertible debentures totaling $30 million that bear interest at a rate of 10.0% per annum, have a term of three years, and are convertible into common stock at $0.1125 per share. Also included in this financing are 62.5 million warrants with an exercise price of $0.16 per share.

Cornell Capital is a New Jersey-based investment fund managed by Yorkville Advisors Management, LLC. Complete terms of the financings will be released in the Company's 8-K filing.

Jeff Finkelstein, Chief Financial Officer of SmarTire stated, "This major financing represents one of the most important milestones in the history of our company. Completion of this financing sends a very clear and positive message to our customers, suppliers and strategic partners that SmarTire now has the resources necessary to execute on its business plan. The Company has expanded its business strategy beyond tire monitoring opportunities to include a wider range of wireless sensing and control applications that utilize SmarTire's patented technologies. This financing enables us to launch and maintain a long-term sales and marketing program into this exciting market sector."

About SmarTire Systems Inc.

SmarTire develops and markets proprietary advanced tire pressure monitoring and technology systems for the global automotive and transportation industries. The U.S. Government, through the TREAD Act, has legislated that all new passenger vehicles must be equipped with tire monitoring systems beginning with a phased implementation in 2004. SmarTire is capitalizing on the rapidly emerging OEM and aftermarket opportunities. The company's vision is to become the preeminent provider of wireless sensing and control systems for vehicles worldwide. Incorporated in 1987, SmarTire has offices in North America and Europe.

A comprehensive investment profile regarding SmarTire Systems Inc. may be found online at www.hawkassociates.com/smartire/profile.htm.

Additional information about SmarTire Systems can be found on the website www.smartire.com. (305) 451-1888, email: info@hawkassociates.com.