MIKOH AND POLY-FLEX JOIN FORCES TO PRODUCE TAMPER-INTELLIGENT "SMART LABELS"

Poly-Flex to manufacture and distribute SmartANDSecureTM

MCLEAN, VA (August 10, 2000) - MIKOH Corporation ("MIKOH"), a specialty supplier of Asset Integrity Protection products, and Poly-Flex Circuits, Inc. ("Poly-Flex"), a leading designer and manufacturer of flexible circuit assemblies and transponders for Radio Frequency Identification ("RFID") smart labels, today announced an exclusive manufacturing agreement under which Poly-Flex will produce RFID label transponders using MIKOH's tamper-indicating SmartANDSecureTM process. Under a related agreement, Poly-Flex will also act as a channel distributor for SmartANDSecureTM transponders and labels.

SmartANDSecureTM is a process that is applied to any smart label to make it tamper-intelligent. The process enhances existing RFID transponders (thin and flexible RFID circuits included in smart label constructions), so that tampering can be detected by a special RFID reader. SmartANDSecure ensures that any attempt to tamper with a smart label, or remove it from one item and place it on another, will be detected by an RFID system. A SmartANDSecure label will alert an RFID system even when sophisticated tampering methods (chemical, temperature, and mechanical assaults) are attempted.

SmartANDSecure provides obvious benefits in high security applications such as the sealing of classified equipment, restricted locations, and HAZMAT containers, where a combination of tamper-intelligence and on-board data storage is required. In the commercial arena, it provides powerful asset integrity protection for item management, supply chain management, and logistics applications, offering cost-effective protection against inventory fraud, warranty and repair violations, product diversion, and other security-related actions.

Poly-Flex will initially create SmartANDSecureTM transponders for use at 13.56MHz, 915MHz, and 2.45GHz frequencies. Other frequencies and protocols will be added to the SmartANDSecureTM transponder line as needed.According to Peter Atherton, MIKOH President and CEO, "As RFID carriers gain wider acceptance in item management and tracking, their inherent lack of physical tamper protection and their easy portability make them major security concerns. SmartANDSecure addresses these concerns by bringing MIKOH's asset integrity protection expertise to the smart label user. Poly-Flex offers strong inlet design and manufacturing capability, extensive materials expertise, and established avenues into a relevant customer base. Our Poly-Flex alliance assures smart label end-users of security, dependability and quality."

Dennis Carvalho, President of Poly-Flex, confirms the synergy of an alliance with MIKOH. "As an approved volume manufacturer for the leading chip developers, Poly-Flex delivers a spectrum of chip designs, frequencies, substrates, and carriers to the RFID market. SmartANDSecure provides physical integrity and tracking capabilities aimed directly at the needs of smart label users and further enhances our product offerings. Our exclusive agreement with MIKOH enables us to capitalize on a growing demand for secure smart labels within key applications."

ABOUT MIKOH

MIKOH is strongly grounded in Asset Integrity Protection methodologies for authenticity verification, counterfeit detection, covert identification, and subsurface information storage. Its technology components are used by commercial clients and federal agencies throughout the US, and have been endorsed and adopted by the governments of Australia and New Zealand. These technologies are especially effective within labels, seals, cards, classified documents, specialized inks, and security threads. Each "carrier" is rugged, resistant to chemical and UV exposure, able to withstand extremes of temperature and humidity, and highly secure. MIKOH technologies include COUNTERFOILTM (for covert authentication), COPYSHIELD TM (for overt verification), and SubScribe TM (subsurface laser marking for micro-information storage).

ABOUT POLY-FLEX

Poly-Flex Circuits, Inc., is a subsidiary of Parlex Corporation (NASDQ:PRLX), a global supplier of flexible interconnects and circuitry to the automotive, telecommunication, networking, diversified electronics, aerospace, and RFID markets. Poly-Flex has positioned itself as a leader in the manufacture of polymer thick film (PTF) flexible circuitry as a result of its innovative materials and technologies. Poly-Flex has leveraged its proprietary materials and process expertise to provide low cost, high volume production of inlets for RFID smart label markets. With access to multiple manufacturing operations in Europe, North America, and Asia, Poly-Flex can provide strong local support for broad global requirements.