SOURCE: Aegis Industries, Inc.

March 20, 2007 09:00 ET

Aegis Industries Signs LOI With Z5 Technologies

ROCKVILLE, MD -- (MARKET WIRE) -- March 20, 2007 -- Aegis Industries, Inc. (OTCBB: AGIN) ("Aegis" or the "Company") is pleased to announce it has signed a Letter of Intent ("LOI") with Z5 Technologies, LLC ("Z5"), a Delaware Corporation, headquartered in Washington, DC.

The LOI states that, upon completion of due diligence, the parties intend that Aegis and Z5 will negotiate a formal, definitive merger and share purchase and exchange agreement. Aegis plans to purchase, through a subsidiary, all of the issued and outstanding shares of Z5 (the "Z5 shares") and the shareholders of Z5 will acquire an equity interest in Aegis.

The LOI calls for Aegis to issue to a new Delaware company ("Newco") a total of 20,000,000 shares (the "Vend In Shares") in exchange for all of the voting, participating Class A shares of Newco, Z5's shareholders are to acquire, in exchange for selling all of the Z5 Shares to Newco, all of the Class B shares of Newco. The Class B shares of Newco will be exchangeable, under certain conditions, at the election of Z5's shareholders, for the Vend In Shares. Under the terms of the LOI, Aegis must provide Z5 with financing of $5,000,000 over two years under certain terms and conditions. Of the 20,000,000 Vend In Shares, a total of 4,000,000 will be returned to treasury if Z5 does not achieve $1,250,000 EBITDA in the twelve months following closing. Aegis must also make an immediate bridge loan of $500,000 to Z5 to fulfill its obligations under the LOI and is in the process of raising these funds.

The full terms of the LOI are disclosed in Aegis' report on Form 8K to be filed on the SEC's EDGAR website on March 20, 2007.

Upon closing of the acquisition of Z5, it is anticipated that Brandon Reilly of Z5 will join the board of directors of Aegis together with another appointee from Z5 and an independent director to be chosen by the present board of directors and the two Z5 appointees.

Both parties have agreed to act together towards ensuring that AEGIS and Z5 enter into a definitive agreement, and other related agreements (collectively, the "Definitive Agreement") containing substantially the same terms and provisions as the LOI on or before April 1, 2007. The Definitive Agreement shall provide that the Closing occur as promptly as practicable, but in all events on or before April 30, 2007 unless otherwise agreed to by all parties.

Company President Paul Evancoe stated, "We are moving ahead quickly to integrate the management teams so as to develop clear lines of communication and to forge a command structure designed to propel the company forward. We believe that this merger is a great step forward towards the development of significant shareholder value in coming months."

Additional information will be announced as it becomes available.

About Z5 Technologies, LLC (

Z5 Technologies is a leader in the deployment of ruggedized mobile command, control, and communications network solutions. The Company designs, integrates, and manufactures rugged, lightweight, man-portable products and solutions for instantaneous tactical communications. Products include the latest voice and data communications, mission command, security and mobile mesh networking technologies packaged into rugged tactical command solutions for deployment anywhere in the world. Z5's products and solutions enable mobile users to take control of the most challenging situations in the most challenging of environments.

About Aegis Industries, Inc. (OTCBB: AGIN)

Aegis Industries acquires the expertise to design, develop, and market, next generation intermediate force technologies backed by industry-leading R&D. The Company philosophy is based in the knowledge that better communication, tools and training result in a safer enforcement outcome with fewer injuries to officers, suspects, and bystanders. Management draws on extensive experience on the front lines combined with the most forward-thinking R&D to develop leading edge products designed to exceed the expectations of military, law enforcement, and private security customers.

Forward-Looking Statements

Except for statements of historical fact, the information presented herein may contain forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include general economic and business conditions, the ability to acquire and develop specific projects, the ability to fund operations and changes in consumer and business consumption habits and other factors over which Aegis Industries, Inc. or Z5 Technologies, LLC has little or no control.

On Behalf of the Board
Aegis Industries, Inc.
Paul Evancoe, President

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