Melville, New York, December 20, 2001 - Andrea Electronics Corporation (AMEX: AND) announced today that it has signed an agreement with a leading semiconductor company for the license of Andrea Electronics' PureAudio® digital noise canceling algorithm for use with embedded PC market product offerings.

Based on the terms of the agreement, Andrea will receive an annual royalty fee of $1 million dollars. The agreement states that Andrea and its partner will, together, market Andrea Electronics' Digital Super Directional Array (DSDA®) and EchoStop™ algorithms, as well as Andrea Electronics' hardware solutions to leading PC OEMs, worldwide. Additional details regarding the agreement will be released at a later date.

"We are excited about this strategic relationship, as it provides both an immediate source of revenue, as well as a tremendous distribution channel for our technologies and products," said Christopher P. Sauvigne, President and Chief Executive Officer of Andrea Electronics. "As evidenced by the recently released Windows XP operating system, speech enabled applications are clearly gaining momentum and, together with our partner, we will enable consumers to experience superior, untethered microphone performance at previously unattainable price points."

Andrea Electronics' patented PureAudio noise canceling algorithm enhances applications that are controlled by speech. By sampling the ambient noise in an environment and attenuating the noise from sources near or around the desired speech signals, PureAudio delivers a clear audio signal. Designed specifically to improve the signal-to-noise ratio, PureAudio is effective in canceling stationary noises such as computer fans, tires and other unwanted noises.

About Andrea Electronics:
Andrea Electronics Corporation designs, develops and manufactures audio technologies and equipment for enhancing applications that require high performance and high quality voice input. The Company's patented Digital Super Directional Array (DSDA®), patent-pending Directional Finding and Tracking Array (DFTA™), patented PureAudio®, and patented EchoStop™ far-field microphone technologies enhance a wide range of audio products to eliminate background noise and ensure the optimum performance of voice applications. Applications for the Company's technologies include: speech recognition programs, Internet telephony, video/audio conferencing, automobile PCs, home automation systems, hand-held devices and multiplayer online games, among others. Visit Andrea Electronics' websites at www.AndreaElectronics.com or call 1-800-442-7787.

This press release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words "anticipates," "believes," "estimates," "expects," "intends," "plans," "seeks," variations of such words, and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and involve matters that are subject to certain risks, uncertainties and assumptions that are difficult to predict, including economic, competitive, governmental, technological and other factors, that may affect the business and prospects of Andrea Electronics Corporation and Net2Phone, Inc. (collectively the "Companies"). For this purpose, any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Factors which may affect the Companies' results include, but are not limited to, the Companies' abilities to expand their customer base, the Companies' abilities to develop additional and leverage existing distribution channels for their products and solutions, dependence on strategic and channel partners including their abilities to distribute the Companies' products and meet or renew their financial commitments, the Companies' abilities to address international markets, the effectiveness of the Companies' sales and marketing activities, the acceptance of the Companies' products in the marketplace, the timing and scope of deployments of the Companies' products by customers, fluctuations in customer sales cycles, customers' ability to obtain additional funding, technical difficulties with respect to the Companies' products or products in development, the need for ongoing product development in an environment of rapid technological change, the emergence of new competitors in the marketplace, the Companies' abilities to compete successfully against established competitors with greater resources, the uncertainty of future governmental regulation, the Companies' abilities to manage growth, obtain patent protection, and obtain additional funds, general economic conditions and other risks discussed in this Report and in the Companies' other filings with the Securities and Exchange Commission. All forward-looking statements and risk factors included in this document are made as of the date hereof, based on information available to the Companies' as of the date thereof, and the Companies' assume no obligation to update any forward-looking statement or risk factors.