Investor in Medis El Parent Company Enables Purchase of Shares

4 November 1998

Investor in Medis El Parent Company Enables Purchase of Medis Shares

    JERUSALEM--November 4, 1998--Medis El Ltd. today announced that utilizing an investment of $2 million in its parent company, Cell Diagnostic Inc., (CDI) by a prominent investor group, CDI has agreed to purchase 400,000 additional shares of Medis. As previously announced, CDI, in December, will also pay $300,000 to Medis El from proceeds of additional investment in CDI by two of CDI's principal shareholders, Robert K. Lifton and Howard Weingrow. With this additional purchase, CDI will own 63 percent of Medis El's outstanding shares.
    The Medis EL shares, which are unregistered are being sold at a small discount from the market price at the time of agreement. At the same time, Medis El has agreed to extend CDI's current North American agency relationship for the Stirling Cycle Technology to other Medis El's technologies in order to benefit from CDI's marketing efforts and avoid conflicts among technologies. Both these transactions will be submitted to Medis El shareholders for ratification.
    "We are delighted with this investment," said Robert K. Lifton, Chairman of Medis El. "This group's knowledge, experience and broad array of business relationships will be instrumental in expanding Medis El's strategic growth. On a personal level, I am pleased to have this opportunity to work with people I greatly respect and admire."
    Mr. Lifton continued, "We believe that the infusion of $2.3 million into Medis El, together with the previously announced $2 million investment to Medis El in June, provides us with sufficient funding to carry out Medis El's current programs for Cell Scan as well as to bring the inventions in our energy technology division -- the Stirling Cycle Technology, the Fuel Cells and the Toroidal Engine -- to the prototype stage, in order to demonstrate them to potential licensees.
    "Finally, let me call attention to Medis El's new website, www.Medisel.com, where there is updated information about our products and corporate developments."
    Medis El, founded in 1992, is an Israeli corporation involved in building a pipeline of proprietary products based on Israeli and former Soviet Union technology for exploitation by large international corporations. The Company's Energy Technology Division recently obtained a patent on its Synchronous Twin Piston Reciprocating Linear Compressor, a revolutionary and environmentally friendly synchronous twin piston compressor that has high-value applications in the fields of refrigeration and air-conditioning. In addition, the Company has options for a majority interest in companies owning patents to the Toroidal Internal Combustion Engine and Toroidal compressor, extremely efficient and environmentally friendly engines. The Company has recently announced that its subsidiary has acquired technology representing major advances in development of small fuel cells. In this division, the Company also has in development and has applied for patents for a Reciprocating Electric Machine that it expects will substantially reduce the cost of producing electricity.
    The Company's other products include the CellScan, a unique proprietary laser-based cytometer that repeatedly monitors the fluorescent intensity and polarization of individual living cells, and is being used in tests for diagnosis of cancer and other diseases.

    This press release contains forward-looking statements that involve risks and uncertainties, including but not limited to quarterly fluctuations in results, the management of growth, regulatory changes, and other risks detailed from time to time in the Company's Securities and Exchange Commission filings. Actual results may differ materially from such information set forth herein. In addition, the Company's growth is dependent upon, among other things: continuing high demand for cruiser motorcycles, the Company's ability to compete in a highly competitive market, the Company's ability to increase motorcycle production, the Company's ability to satisfy its substantial additional capital requirements, the Company's ability to hire and retain key employees, and the Company's relationships with its customers and vendors. There can be no assurance that the Company will be successful in addressing any of these risks or that its sales and earnings will grow in the future as a result of these risks or others.

    This release is available on the KCSA Worldwide Website at www.kcsa.com.