StockerYale Acquires Photonic Products Ltd

Salem, N.H., October 31, 2006 - StockerYale, Inc. , a leading independent provider of photonic-based products, today announced that it has acquired privately held Photonic Products Ltd. of the United Kingdom, a well-known provider of laser diode modules and laser diodes for industrial, medical and scientific markets. This strategic acquisition will significantly broaden StockerYale's product portfolio of laser modules, increase StockerYale's 2006 revenues by approximately 50%, and is expected to substantially improve the profitability and cash flow of the Company.

Photonic Products Ltd. manufactures custom designed electro-optical sub-assemblies and optoelectronic components, based on semiconductor laser diode technology, for leading OEM manufacturers. In addition, the company is a leading distributor of high performance industrial laser diodes, including blue-violet, red and infrared laser diodes from Sanyo, Sony and Opnext, and high performance optical lenses from Panasonic. The company was founded in 1995 and has 45 employees. Photonic Products operations are located near Stansted, England with sales offices in Germany and California.

Over the last five years, the company's revenues have grown at a compound annual growth rate of 32% in response to worldwide customer demand for its laser diodes, laser modules and optical components. More recently, the company has invested in CNC manufacturing technology to increase production capacity and improve overall productivity. This year, Photonic Products received the Queen's Award for Enterprise: International Trade. Current management will continue to manage the business.

The acquisition will enable StockerYale to meet the needs of a larger OEM market for laser diodes and laser diode modules with a broad range of sophisticated laser modules at all price levels. The Company will also enjoy closer working relationships with the world's leading laser diode manufacturers, which will significantly enhance performance of the Company's products and lead to greater market penetration. Because StockerYale has historically sold primarily into the machine vision market and Photonic Products sells to non-machine vision markets, there exists very little overlap in the combined Company's addressable markets.

Photonic Products will benefit from StockerYale's expertise in optics and laser beam shaping, such as that employed in the development of StockerYale's recently announced, "flat-top" line generator for micro inspection applications (patent-pending). Customers of both companies will benefit from the complementary expertise and the production of high quality laser modules and optics, from a simple laser spot projector to a high performance laser pattern generator.

"With this acquisition, StockerYale's laser sales will double and our opportunity for future sales is considerably greater due to a more diversified laser product portfolio, multiple cross-selling opportunities and access to new markets for each other's products," said Mark W. Blodgett, Chairman and Chief Executive Officer. "We expect that there will be significant cost savings accruing to StockerYale thanks to Photonic Products' laser diode distribution business, as well as the opportunity to combine marketing efforts. Photonic Product's leaders have a consistent track record managing profitable growth and our combined teams will be a powerful force for product innovation and the development of new customer applications for laser modules. We are delighted that Photonic Products' management and employees have joined our organization and we look forward to working together to build on their history of sales growth and profitability," added Blodgett.

ABOUT STOCKERYALE

StockerYale, Inc., headquartered in Salem, New Hampshire, is an independent designer and manufacturer of structured light lasers, LED modules, and specialty optical fibers for industry leading OEMs. In addition, the company manufactures fluorescent lighting products and phase masks. The Company serves a wide range of markets including the machine vision, industrial inspection, defense, telecommunication, sensors, and medical markets. StockerYale has offices and subsidiaries in the U.S., Canada, and Europe.

For more information about StockerYale and their innovative products, visit the Company's web site at www.stockeryale.com or contact StockerYale, Inc., at 32 Hampshire Rd., Salem, NH, 03079. Call 800-843-8011, Fax 603-893-5604, Email: info@stockeryale.com.

ABOUT PHOTONIC PRODUCTS LTD

Photonic Products is an ISO9001:2000 certified manufacturer of custom designed laser diode modules and an authorised distributor of high performance industrial laser diodes manufactured by Sanyo, Opnext (formerly Hitachi) and Sony, LEDs, and precision optical lenses. Photonic Products was established in 1995 and has operations in the United Kingdom, the United States and Germany.

The company has twice been honoured with a Queen's Award for Enterprise: International Trade.