Covalon takes action against former CEO

August 14, 2006

Mississauga, Ontario – August 14, 2006.  Covalon Technologies Ltd. (TSX VENTURE: COV) (“Covalon”) announces that it has commenced proceedings in the Ontario Superior Court of Justice against former chairman and CEO, John Robert Allan, his spouse and Durimport Marine Limited (“Durimport”), a corporation owned and controlled by them.  Covalon is seeking the return and cancellation of 4.87 million Covalon common shares which Durimport received as consideration for the “Duri Collector”, a medical diagnostic device invented by Mr. Allan which has never achieved commercial viability.  Covalon also seeks recovery of up to $600,000 in fees, salary and benefits paid to Mr. Allan or Durimport for Mr. Allan’s services as CEO of Covalon Technologies Inc. (“CTI”), a wholly owned subsidiary, between 1999 and 2003, and additional damages for losses suffered by CTI during Mr. Allan’s tenure as CEO.  Durimport and the individual defendants have filed a defence to these claims and counterclaims against Covalon and two of its senior officers.

For further information please contact:
William Jackson, CFO & COO
Covalon Technologies Ltd.
T: (905) 568-8400
F: (905) 568-5200
www.covalon.com

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