Mechanical Technology Inc. (MKTY) held its annual shareholders meeting Thursday, June 24, 2004, in Albany, New York. The focus of the meeting was on recent advancements made at the Company's subsidiary, MTI MicroFuel Cells Inc. (MTI Micro). MTI Micro is commercializing direct methanol fuel cells (DMFCs) as a power source for portable electronics and plans to ship its first DMFC products by the end of 2004. 
 
MTI Micro introduced the Mobion(TM) brand for its proprietary DMFC technology -- combining the concepts of mobility and always on. MTI Micro demonstrated its technology in the latest generation freestanding technology prototype, as well as concept models of a PDA/smart phone and a hand-held entertainment system. These concept models were powered by integrated Mobion(TM) technology. The freestanding Mobion(TM) power system is less than 40cc in size, achieving a technology milestone for the company while demonstrating the miniaturization progress necessary for integration into portable electronics. 

"Mobion(TM) will be the enabling technology powering our first product shipment planned for the industrial market later this year," said Dr. William P. Acker, President and CEO of MTI Micro. "The integrated concept models represent our vision for powering consumer devices and, although additional time and development are required to begin the penetration of this multi- billion dollar market, Mobion(TM) technology will form the basis for future mass market consumer DMFC products." The complete MTI Micro release on Mobion(TM) is available at http://www.mechtech.com/newsandevents/ 

During the meeting, MTI Micro outlined plans to enter industrial, military and, ultimately, consumer markets with its breakthrough Mobion(TM) technology projected to power portable electronic devices two to ten times longer than an equivalent size battery pack and provide instant, cord-free re-charging. Company officials also discussed projected manufacturing advantages of Mobion(TM) technology -- due to reduced system complexity and use of many existing, proven and highly available materials -- and they outlined progress on work with MTI Micro strategic partners. 

"To help increase shareholder value, our strategy has been to build up the critical cash reserves necessary to support MTI Micro's product commercialization and to further strengthen operations at our second subsidiary, MTI Instruments, which in 2003 turned in a solid performance in terms of sales, gross margins, profits, cash flow and product development," said Dale W. Church, CEO and Chairman of MTI and Chairman of MTI Micro. 

MTI Instruments, which designs and manufactures precision test and measurement systems, has more than 200 customers throughout 60 countries in the aviation and turbomachinery, data storage, semiconductor, automotive and bioengineering industries as well as research labs and universities. Edward A. Dohring, Chairman of MTI Instruments, outlined progress at that subsidiary which includes the development of new industrial and marine applications for the PBS engine balancing line; new automotive sensor applications in the US and across Asia; increased work in the development and sales of semiconductor metrology tools, and innovations across all of the subsidiary's product categories. 

Audio playback of executive presentations and accompanying PowerPoint slides will be available by or before 5 PM on June 24, 2004, on the Company's website, http://www.mechtech.com. 

About MTI 

MTI is primarily engaged in the development and commercialization of Mobion(TM) cord-free advanced portable power systems through its subsidiary MTI MicroFuel Cells Inc. (MTI Micro), and has announced plans to ship its first product towards the end of 2004. MTI Micro has a world-class team of entrepreneurial business executives, researchers and scientists; a proprietary direct methanol micro fuel cell power system and a number of system prototypes demonstrating size reductions and performance improvements; significant related intellectual property; and has received government awards and developed strategic partnerships to help accelerate commercialization. MTI is also engaged in the design, manufacture, and sale of high-performance test and measurement instruments and systems through its subsidiary MTI Instruments, Inc. For more information about the company or subsidiaries please visit http://www.mechtech.com, http://www.mtimicrofuelcells.com, and http://www.mtiinstruments.com. 

Statements in this press release which are not historical fact including statements regarding managements intentions, hopes, beliefs, expectations, representations, projections, plans or predictions of the future are forward- looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include statements regarding the prospects and potential for MTI Micro and its technology; the timing of market entry and penetration for Mobion(TM) DMFCs; any impact that Mobion(TM) prototype performance or potential performance may ultimately have on product performance or delivery; advantages of Mobion(TM) technology over other competitive technologies; claims regarding manufacturability and simplicity of the Mobion(TM) system; and statements regarding performance, profits, sales, development and potential at MTI Instruments. It is important to note that the Company's actual results may differ materially from those in any such forward-looking statements. Factors that could cause actual results to differ materially include, among others, risks related to financing, uncertainties in development, manufacturing, competition and consumer demand for DMFCs, and the risk factors listed from time to time in the Company's SEC reports including but not limited to, the Annual Report on Form 10-K for the year ended December 2003 and Quarterly Reports on Form 10-Q.