eMagin Reports Results and Highlights of 2006 Annual Shareholder Meeting

  
    
  
  
    
      eMagin Corporation (AMEX:EMA) shareholders approved all proposals 
      presented, including the Company’s plans for a 
      reverse stock split, at the annual meeting held Friday, Oct. 20, 2006. 
      eMagin reported that 80,427,352 votes were cast, representing nearly 80% 
      of the Company’s outstanding shares eligible 
      to vote as of the record date. eMagin’s CEO 
      and President, Gary Jones, gave a briefing on the company’s 
      progress over the most recent 18 months:
    
    
      Proposals adopted by the shareholders.
    
    
      (1) Elected Directors Paul Cronson, Thomas Paulsen, and Stephen Seay as 
      Directors to hold office for terms of three years;
    
    
      (2) Amended the Company’s Articles of 
      Incorporation to increase the number of Directors which may be appointed 
      to the Company’s Board of Directors from a 
      maximum of nine to ten persons;
    
    
      (3) Authorized the Company’s Board of 
      Directors to amend the Certificate of Incorporation to effect a reverse 
      stock of the outstanding shares of common stock at a ratio of 
      one-for-ten. November 3, 2006, is tentatively set as the effective date 
      for the split;
    
    
      (4) Authorized potential issuance of common stock pursuant to the 6% 
      Senior Secured Convertible Notes Due 2007-2008 and warrants to purchase 
      shares of the Company’s common stock at a 
      price below fair market value;
    
    
      (5) Amended the 2004 Non-Employee Stock plan by increasing the number of 
      shares issuable to 9.5 million; and
    
    
      (6) Ratified the appointment of Eisner LLP as the Company’s 
      independent auditors for the fiscal year ending December 31, 2006.
    
    
      Technology and Product Highlights:
    
    
      
        Introduced first consumer-oriented product, the Z800 3DVisor(TM), 
        which won the Consumer Electronics Association’s 
        Best of Innovations Award beating out large screen LCD and plasma 
        televisions, as well as receiving a CES Innovation Design Award for 
        electronic gaming and Digital Life Innovator recognition. This month 
        Gotfrag.com included the Z800 3DVisor as one of products that “shape 
        the future of computer hardware – the 
        cutting-edge devices that redefine the standards and break new ground.”
      
      
        Developed and brought to market its new OLED-XL(TM) technology, which 
        provides much longer display luminance life, lower power consumption, 
        and higher luminance.
      
      
        Improved factory production substantially in terms of both output 
        quantity and quality. International production manufacturing 
        qualifications were achieved with several commercial and military OEMs.
      
      
        Was notified of major new design wins and contracts, with new funding 
        support from the US government for next generation IC and technology 
        development. It was also noted that eMagin’s 
        average product unit selling price is also improving after the 
        redirection in mid-2006 toward focusing on military and high end 
        commercial markets.
      
      
        Verified next generation capability with smaller pixel sized SVGA 
        3Dshrink prototypes and new control features with military importance.
      
    
    
      Mr. Jones commented, “We believe that these 
      recent placements of our microdisplays by OEMs in major systems such as 
      Sagem’s FELIN system in European military 
      programs and Nivisys’ TAM-14 being deployed 
      by the U.S. Department of Homeland Security indicate a strong future for 
      the Company’s OLED technology. While timing 
      of implementation of many defense procurement programs was pushed out 
      during the past 2 years, primarily due to programmatic or technical 
      issues not related to eMagin, we believe that the prospects for this 
      business remains attractive and traction is beginning to be seen in 
      revenue growth.”
    
    
      “Current Z800 3DVisor sales are increasing, 
      with interest growing from commercial and military simulation customers. 
      We believe that the consumer market for virtual imaging is still 
      expected to become a major segment in the future. For the near term, 
      eMagin plans to pursue expansion of this important opportunity primarily 
      through partnerships and licensing due to the extensive level of 
      resources required to open this market properly. Nevertheless, we 
      believe that the Z800 3DVisor represents a significant milestone by 
      demonstrating the power of high-resolution virtual imaging, virtual 
      reality gaming, and highly portable virtual large HDTV capable computer 
      screens. As a result, the system continues to catalyze serious interest 
      from several large consumer OEM partners.”
    
    
      Financial performance is also improving, according to Jones. “Costs 
      are down and third quarter revenue is expected to show a substantial 
      increase over the same period last year, providing continued improvement 
      in traction in our key markets. Details will be reported in our next 
      earnings statement for the third quarter.”
    
    
      Mr. Jones noted that financing a company in this period with the 
      expenses of a high tech semiconductor IC-like manufacturing clean room 
      and supporting multiple disciplines of the related business in this 
      emerging market, coupled with delays in contract start by major 
      customers due to their own end customers’delays, 
      has remained a challenge and created cash flow pressure. He further 
      stated that next generation IC designs are needed to insure that eMagin’s 
      products remain the best in its market segment, the most important of 
      which is the SXGA development which is to be mostly supported by 
      government contracts and expected to initiate shortly.
    
    
      Mr. Jones also disclosed that the Company has received several inquiries 
      from various strategic relationships ranging from investment to 
      acquisition and that the firm has retained CIBC World Markets 
      Corporation and Larkspur Capital Corporation to assist the company in 
      investigating these and other strategic alternatives.
    
    
      About eMagin Corporation
    
    
      A leader in OLED microdisplay technology, eMagin integrates 
      high-resolution OLED microdisplays with magnifying optics to deliver 
      virtual images comparable to large-screen computer and television 
      displays in portable, low-power, lightweight personal displays. eMagin 
      microdisplays provide near-eye imagery in a variety of products from 
      military, industrial, medical and consumer OEMs. The company’s 
      own Z800 3DVisor, provides 3D stereovision and headtracking for PC 
      gaming, training and simulation, immersion therapy, and other 
      applications. eMagin's microdisplay manufacturing and R&D operations are 
      co-located with IBM on its campus in East Fishkill, New York. System 
      design facilities and sales and marketing are located in Bellevue, 
      Washington. For additional information, please visit www.emagin.com.
    
    
      Forward Looking Statements
    
    
      Statements in this press release which are not historical data are 
      forward-looking statements which involve known and unknown risks, 
      uncertainties or other factors not under the company's control, which 
      may cause actual results, performance or achievements of the company to 
      be materially different from the results, performance or other 
      expectations implied by these forward-looking statements. These factors 
      include, but are not limited to, those detailed in the company's 
      periodic filings with the Securities and Exchange Commission. We 
      undertake no duty to update any of the forward-looking statements, 
      whether as a result of new information, future events or otherwise.
    
  
eMagin Corporation (AMEX:EMA) shareholders approved all proposals
presented, including the Company's plans for a reverse stock split, at
the annual meeting held Friday, Oct. 20, 2006. eMagin reported that
80,427,352 votes were cast, representing nearly 80% of the Company's
outstanding shares eligible to vote as of the record date. eMagin's
CEO and President, Gary Jones, gave a briefing on the company's
progress over the most recent 18 months:

   Proposals adopted by the shareholders.

   (1) Elected Directors Paul Cronson, Thomas Paulsen, and Stephen
Seay as Directors to hold office for terms of three years;

   (2) Amended the Company's Articles of Incorporation to increase
the number of Directors which may be appointed to the Company's Board
of Directors from a maximum of nine to ten persons;

   (3) Authorized the Company's Board of Directors to amend the
Certificate of Incorporation to effect a reverse stock of the
outstanding shares of common stock at a ratio of one-for-ten. November
3, 2006, is tentatively set as the effective date for the split;

   (4) Authorized potential issuance of common stock pursuant to the
6% Senior Secured Convertible Notes Due 2007-2008 and warrants to
purchase shares of the Company's common stock at a price below fair
market value;

   (5) Amended the 2004 Non-Employee Stock plan by increasing the
number of shares issuable to 9.5 million; and

   (6) Ratified the appointment of Eisner LLP as the Company's
independent auditors for the fiscal year ending December 31, 2006.

   Technology and Product Highlights:

   --  Introduced first consumer-oriented product, the Z800
        3DVisor(TM), which won the Consumer Electronics Association's
        Best of Innovations Award beating out large screen LCD and
        plasma televisions, as well as receiving a CES Innovation
        Design Award for electronic gaming and Digital Life Innovator
        recognition. This month Gotfrag.com included the Z800 3DVisor
        as one of products that "shape the future of computer hardware
        - the cutting-edge devices that redefine the standards and
        break new ground."

   --  Developed and brought to market its new OLED-XL(TM)
        technology, which provides much longer display luminance life,
        lower power consumption, and higher luminance.

   --  Improved factory production substantially in terms of both
        output quantity and quality. International production
        manufacturing qualifications were achieved with several
        commercial and military OEMs.

   --  Was notified of major new design wins and contracts, with new
        funding support from the US government for next generation IC
        and technology development. It was also noted that eMagin's
        average product unit selling price is also improving after the
        redirection in mid-2006 toward focusing on military and high
        end commercial markets.

   --  Verified next generation capability with smaller pixel sized
        SVGA 3Dshrink prototypes and new control features with
        military importance.

   Mr. Jones commented, "We believe that these recent placements of
our microdisplays by OEMs in major systems such as Sagem's FELIN
system in European military programs and Nivisys' TAM-14 being
deployed by the U.S. Department of Homeland Security indicate a strong
future for the Company's OLED technology. While timing of
implementation of many defense procurement programs was pushed out
during the past 2 years, primarily due to programmatic or technical
issues not related to eMagin, we believe that the prospects for this
business remains attractive and traction is beginning to be seen in
revenue growth."

   "Current Z800 3DVisor sales are increasing, with interest growing
from commercial and military simulation customers. We believe that the
consumer market for virtual imaging is still expected to become a
major segment in the future. For the near term, eMagin plans to pursue
expansion of this important opportunity primarily through partnerships
and licensing due to the extensive level of resources required to open
this market properly. Nevertheless, we believe that the Z800 3DVisor
represents a significant milestone by demonstrating the power of
high-resolution virtual imaging, virtual reality gaming, and highly
portable virtual large HDTV capable computer screens. As a result, the
system continues to catalyze serious interest from several large
consumer OEM partners."

   Financial performance is also improving, according to Jones.
"Costs are down and third quarter revenue is expected to show a
substantial increase over the same period last year, providing
continued improvement in traction in our key markets. Details will be
reported in our next earnings statement for the third quarter."

   Mr. Jones noted that financing a company in this period with the
expenses of a high tech semiconductor IC-like manufacturing clean room
and supporting multiple disciplines of the related business in this
emerging market, coupled with delays in contract start by major
customers due to their own end customers'delays, has remained a
challenge and created cash flow pressure. He further stated that next
generation IC designs are needed to insure that eMagin's products
remain the best in its market segment, the most important of which is
the SXGA development which is to be mostly supported by government
contracts and expected to initiate shortly.

   Mr. Jones also disclosed that the Company has received several
inquiries from various strategic relationships ranging from investment
to acquisition and that the firm has retained CIBC World Markets
Corporation and Larkspur Capital Corporation to assist the company in
investigating these and other strategic alternatives.

   About eMagin Corporation

   A leader in OLED microdisplay technology, eMagin integrates
high-resolution OLED microdisplays with magnifying optics to deliver
virtual images comparable to large-screen computer and television
displays in portable, low-power, lightweight personal displays. eMagin
microdisplays provide near-eye imagery in a variety of products from
military, industrial, medical and consumer OEMs. The company's own
Z800 3DVisor, provides 3D stereovision and headtracking for PC gaming,
training and simulation, immersion therapy, and other applications.
eMagin's microdisplay manufacturing and R&D operations are co-located
with IBM on its campus in East Fishkill, New York. System design
facilities and sales and marketing are located in Bellevue,
Washington. For additional information, please visit www.emagin.com.

   Forward Looking Statements

   Statements in this press release which are not historical data are
forward-looking statements which involve known and unknown risks,
uncertainties or other factors not under the company's control, which
may cause actual results, performance or achievements of the company
to be materially different from the results, performance or other
expectations implied by these forward-looking statements. These
factors include, but are not limited to, those detailed in the
company's periodic filings with the Securities and Exchange
Commission. We undertake no duty to update any of the forward-looking
statements, whether as a result of new information, future events or
otherwise.