Optimal Energy Systems Receives Contract Award Increase From SAIC

    TORRANCE, Calif.--Dec. 10, 2002--Optimal Energy Systems Inc. has been awarded a contract award increase from Science Applications International Corporation (SAIC) to provide flywheel technology on the U.S. Army's Tank and Automotive Armaments Command (TACOM) FCS Test-Bed Demonstration program. Optimal is contracted to deliver a developmental Flywheel Power Module (FPOM) for a military vehicle system. Delivery is scheduled for February 2003.
    "This contract award recognizes Optimal's successful progress towards deploying a field-worthy FPoM for military systems, and continues the work on Optimal's first contract awarded by SAIC earlier this year," said Dr. Dwight Swett, Optimal president. "This prototype contract is significant to our business strategy as it has the potential to leverage the FPoM onto various future combat platforms."
    SAIC is engaged in a four-year program for TACOM to develop FCS component technologies and to integrate them into a test-bed demonstration on an Army vehicle. Optimal is supporting SAIC by delivering an FPoM for use in the test bed as a secondary energy storage device.
    Optimal FPoM technology has become an important potential candidate for meeting the power conditioning requirements of several future electric vehicle concepts that will mature over the next three to five years.
    Optimal is currently completing work on a second SAIC contract to provide a different design flywheel prototype for the Army Research Laboratory's Aberdeen, Md., test facility.
    Optimal's facilities are located in Torrance, Calif.
    Certain matters discussed in this news release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and as such may involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Optimal Energy Systems to be different from any future results, performance or achievements expressed or implied by such forward-looking statements. Although Optimal Energy Systems believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance its expectations will be attained.