Pala Launches Premium Partial Offer for Shares of Neo Material Technologies Inc.

"Pala's Offer provides an opportunity for Neo shareholders to gain liquidity now at a significant premium," said Jan Castro, Managing Director of Pala Investments AG, advisor to Pala. "Pala is not seeking a majority interest in Neo and, in fact, is prepared to acquire whatever shares are tendered on a pro rata basis up to 23 million shares. Pala's Offer is not a creeping takeover, as Neo's Board has attempted to characterize it, but rather a straightforward offer to allow interested shareholders to gain immediate liquidity at a premium."

Pala's objective is to invest in companies to achieve significant long-term appreciation on invested capital and Pala has worked successfully, often as a cornerstone shareholder, with numerous boards and management teams to advance growth strategies and deliver value.

"Neo is at a crossroads in its development," Mr. Castro added. "Today the majority of Neo's earnings are generated through key patents set to expire in 2014. The company needs to implement a strategy now to grow over the next three to four years to expand and diversify its business during what is expected to be a protracted downturn. The global economic crisis has deeply affected Neo's customers in the automotive and consumer electronics sectors, causing the most severe economic contractions in the last half-century. Seen in this light, Pala's offer of C$1.40 per share is an opportunity for interested shareholders to sell at a premium price now rather than remain shareholders while Neo struggles with continued and sustained downside risks in its end markets."

In adopting a second shareholder rights plan in response to the Offer, Neo's Board of Directors is seeking to strip shareholders of a basic investment right: the ability to sell their shares at the time and price of their choosing. Neo currently has two shareholder rights plans in place, both of which prevent shareholders from taking advantage of the Offer. In order for all shareholders to take advantage of the Offer, Neo's Board of Directors should waive the unnecessarily restrictive conditions to the Offer put in place by these rights plans.

The Offer

The Offer expires at 5:00 p.m. Eastern Time, April 27, 2009. Compliance with Neo's rights plans requires, among other things, that more than 50% of the shares held by Independent Shareholders (as defined under the rights plans) tender their shares to the offer in order for the offer to proceed.

The Offer will include the rights associated with the common shares under Neo's shareholder rights plans, but not other rights, options, preferred shares, warrants or debentures. Pala does not intend to purchase any more than 23 million of Neo's common shares. If more shares are deposited, the shares to be purchased from each depositing shareholder will be determined on a pro rata basis according to the number of securities deposited by each shareholder.

The Offer is subject to customary conditions and regulatory approvals. The full terms of the Offer and its conditions are included in a takeover bid circular being filed with Canadian securities regulators and mailed to shareholders today. The circular will be available at www.sedar.com.

About Pala

Pala Investments Holdings Limited, based in Jersey, Channel Islands, is a US$1.0 billion multi-strategy investment company with a particular focus on mining and natural resource companies in both developed and emerging markets. Pala Investments' exclusive investment advisor, Pala Investments AG, is a Switzerland-based team with extensive experience within the mining and natural resource sectors. Pala Investments seeks to assist companies in which it has long-term shareholdings by providing strategic advice and innovative financing solutions.

###

This press release contains summary information only about the offer by Pala. Complete information about the Offer will be available by referring to the offer and takeover bid circular to be filed with Canadian securities regulators today.

Certain statements in the press release are forward-looking statements and are prospective in nature. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. These statements generally can be identified by the use of forward-looking words such as "may", "should", "will", "could", "intend", "estimate", "plan", "anticipate", "expect", "believe" or "continue", or the negative thereof or similar variations. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Important factors that could cause actual results to differ materially from the expectations of Pala include, among other things, general business and economic conditions globally or in particular geographic regions in which Neo and its subsidiaries conduct business, the failure to meet certain conditions of the offer, the inability to attract and retain qualified employees, competition, regionally and internationally, changes in law, disruptions in business operations due to reorganization activities, and interest rate and foreign currency fluctuations. Such forward-looking statements should therefore be construed in light of such factors, and Pala is not under any obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Information concerning Neo contained in this press release and has been taken from, or is based upon, publicly available information and records on file with Canadian securities regulatory authorities and other public sources. Neo has not reviewed this press release and has not confirmed the accuracy and completeness of the information in respect of Neo contained herein. Although Pala has no knowledge that would indicate that any statements contained herein concerning Neo taken from or based on such documents and records are untrue or incomplete, neither Pala, nor any of its affiliates, nor any of their respective directors or officers, assumes any responsibility for the accuracy or completeness of such information or for any failure of Neo or its directors or officers to disclose events or facts which may have occurred or which may affect the significance or accuracy of any such information but which are unknown to it.

The offer is being made for the securities of a Canadian issuer and the offer is subject to Canadian disclosure requirements. Shareholders should be aware that such disclosure requirements are different from those of the United States.

SOURCE: Pala Investments Holdings Limited

Pala Investments AG 
Colin Murray 
+41-41-560-9070 
or 
Edelman Public Relations 
Shane Dolgin 
1-416-979-1120 
or 
Shareholders: 
Kingsdale Shareholder Services 
1-866-581-0512