Harris & Harris Group Inc.

NEWS RELEASE

HARRIS & HARRIS GROUP, INC. OCTOBER 17, 2001

ONE ROCKEFELLER PLAZA

NEW YORK, NEW YORK 10020

NASDAQ/NMS SYMBOL: HHGP

CONTACT: CHARLES E. HARRIS

TEL. NO. (212) 332-3606

HARRIS & HARRIS GROUP REPORTS NET ASSET VALUE OF $2.92 PER SHARE AS OF SEPTEMBER 30, 2001

Harris & Harris Group, Inc. announced today that its unaudited net asset value and net asset value per share (NAV) at September 30, 2001, were $25,922,620 and $2.92, respectively. Most of the reduction in net asset value in the third quarter ended September 30, 2001, was owing to declines in value of the Company's publicly held holdings in Nanophase Technologies Corporation (Nasdaq: NANX) and Genomica Corporation (Nasdaq: GNOM) prior to the Company's complete sale of those holdings in the third quarter. These sales took place prior to September 11, 2001. Nanophase and Genomica had been private equity investments of the Company prior to their initial public offerings in November 1997 and September 2000, respectively.

To date, the tragic events of September 11, 2001, have not had a significant overall measurable effect on the value of the Company's private equity holdings. However, we are mindful that the aftershocks of the September 11 disaster are still working their way through the economy and that the vulnerability to economic shocks of thinly capitalized, high technology, start-up companies with negative cash flows is always high. Thus, it may well be that the full negative effects on the Company's private equity portfolio of September 11 lie ahead. Meanwhile, the Company has maintained liquidity for working capital, follow-on investments and new private equity investments. Cash and equivalents at September 30, 2001, totaled $14,158,263.

After repurchasing 200,000 shares of its common stock late in the third quarter, Harris & Harris Group now has 8,864,231 common shares outstanding. Since 1998, the Company has repurchased a total of 1,859,047 of its common shares. The Company is a Business Development Company. Detailed information about the Company and its holdings can also be found on its website at www.hhgp.com.

September 30, 2001 June 30, 2001 December 31, 2000 September 30, 2000

(Un-audited) (Un-audited) (Audited) (Un-audited)

Total Assets $28,567,728 $33,375,034 $43,343,423 $55,663,252

Net Assets $25,922,620 $29,860,794 $31,833,475 $42,921,075

Total Income Tax Liability $1,407,246 $1,381,137 $7,116,036 $5,474,091

Accrued Profit Sharing $0 $1,257,369 $3,483,241 $6,108,434

Net Asset Value per Share $2.92 $3.29 $3.51 $4.64

Shares Outstanding 8,864,231 9,064,231 9,064,231 9,240,831

This press release may contain statements of a forward-looking nature relating to future events. Statements contained in this press release that are forward looking statements are intended to be made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. These statements reflect the Company's current beliefs, and a number of important factors could cause actual results to differ materially from those expressed in this press release. Please see the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission for a more detailed discussion of the risks and uncertainties associated with the Company's business, including but not limited to the risks and uncertainties associated with venture capital investing and other significant factors that could affect the Company's actual results. Except as otherwise required by Federal securities laws, Harris & Harris Group, Inc. undertakes no obligation to update or revise these forward looking statements to reflect new events or uncertainties.