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Abstract:
Company Generates Positive Cash Flow and Strengthens Balance Sheet in Challenging Environment; Significant Increase in Nanoproduct Activity - Nanotech Revenues Increase Over 400% in Quarter

API Nanotronics Reports Second Quarter Results

NEW YORK, NY | Posted on January 14th, 2009

API Nanotronics Corp. (OTCBB: APIA) ("API" or the "Company"), a leading supplier of electronic components, nano-optics and nanotechnology research and development to the defense and communications sectors, today announced second quarter and six month operating results for the period ended November 30, 2008.

Financial Highlights for the Second Quarter Ended November 30, 2008
-- Revenue was $5.7 million, a 25% decrease from the $7.6 million
reached in the same quarter of fiscal 2008. Price reductions to a
large customer at API's Filtran Group division impacted revenues.
Also affecting results was a customer delay on approval of next
generation chips, for which the Company expects to receive approval
over the next several months;

-- The Company posted an operating loss of $2.5 million compared to an
operating loss of $1.0 million for the three months ended November
30, 2007;

-- Net loss for the second quarter was $1.9 million, or ($0.05) per
share, compared to $1.2 million, or ($0.05) per share in the
previous year's quarter;

-- Strong balance sheet with approximately $4.1 million in cash and
$0.1 million of long term debt; and

-- Backlog of $14.5 million.

Financial Highlights for the Six Months Ended November 30, 2008
-- Revenue was $13.6 million, a decrease of 7.5% from $14.7 million
in the same period in 2007;

-- API NRC, the Company's Nanotechnology division, which specializes
in Nano-Optics, increased revenues to $0.2 million in the first six
months of fiscal 2009, compared to almost $nil in the previous year.
This improvement comes as API continues to grow its nanoproduct
offerings after the acquisition of NanoOpto Corp. on July 19, 2007;

-- The Company continued to generate positive cash flow from
operations. In the six months ended November 30, 2008, net cash
provided by operating activities increased to $0.5 million compared
to $0.1 million in the previous year; and

-- Net loss of $2.7 million or ($0.08) per share for the first half of
fiscal 2009, compared to net loss of $1.9 million or ($0.08) per
share for the same period of fiscal 2008.

Operating Highlights

-- During the second quarter of fiscal 2009, API continued to implement
cost-saving restructuring initiatives enabling the Company to
generate positive cash from operating activities in a difficult
economic environment, while continuing to invest in future
nanotechnology product development;

-- The Company continued its consolidation efforts of reducing design
and manufacturing centers to three facilities from seven and closing
and consolidating operations at facilities in Ogdensburg and
Endicott, New York and Largo, Florida. These strategic moves were
undertaken to reduce operating costs while enhancing production
capabilities;

-- In response to market conditions, the Company continues to
transition certain product lines to China for manufacture, which
should assist in increasing margins;

-- In September, a leading semiconductor capital equipment company
enlisted the Company to develop a key nanotechnology derived optical
component for a next generation lithography platform;

-- Also in September, the Company announced the introduction of a new
series of nano-optic high-performance polarizing beam
splitter/combiners; and developed a number of products that combine
its proprietary nanofabrication techniques with MEMS technologies;
and

-- The Company completed a fifteen-for-one reverse stock split.

"The Company is clearly making strides towards a financial structure that will benefit long term performance and shareholder value," said Stephen B. Pudles, Chief Executive Officer of API Nanotronics Inc. "In this difficult financial period, the Company has been able to maintain a strong balance sheet and improve operations, positioning it for greatly improved performance going forward."

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About API Nanotronics Corp.
API Nanotronics Corp., through its wholly owned subsidiaries API Electronics Inc., National Hybrid Inc., Filtran Group, TM Systems, Keytronics and API Nanofabrication Corporation, is engaged in the manufacture of electronic components and systems for the defense and communications industries. API is also developing a leadership position in the R&D and manufacture of nanotechnology and MEMS products.

With a growing list of blue chip customers, including Honeywell/Allied Signal, General Dynamics, Lockheed Martin, and numerous other top technology-based firms around the world, API regularly ships products to clients in more than 34 countries. API owns state-of-the-art manufacturing and technology centers in New York, New Jersey and Ontario, Canada and has manufacturing capabilities in China and a distribution center in Britain. API Nanotronics trades on the OTC Bulletin Board under the symbol APIA.

Safe Harbor for Forward-Looking Statements:

Except for statements of historical fact, the information presented herein constitutes forward-looking statements. All forward-looking statements are subject to certain risks, uncertainties and assumptions 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. These risks and uncertainties, which are more fully described in the Company's Annual and Quarterly Reports filed with the Securities and Exchange Commission, include but are not limited to, 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, our ability to protect our intellectual property, our ability to integrate and consolidate our operations, our ability to expand our operations in both new and existing markets, the effect of growth on our infrastructure and the effect of competition in the electronic components, nano-optics and nanotechnology industries. Should one or more of these risks or uncertainties materialize, or should the assumptions prove incorrect, actual results may vary in material aspects from those currently anticipated. All information in this release is as of the date hereof. We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations.

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Contacts:
Steve Bulwa
Director of Corporate Communications
API Nanotronics Corp.
1-877-API-O-API (274-0274)

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