Optimal Wins Follow-On Contract from SAIC

TORRANCE, Calif.--Aug. 1, 20031, 2003--Optimal Energy Systems Inc. has won a follow-on to an earlier contract from Science Applications International Corporation (SAIC) to provide flywheel technology to the U.S. Army Research Laboratory (ARL) through the U.S. Army Robert Morris Acquisition Center.

Under the new award Optimal is contracted to deliver a developmental Flywheel Power Module (FPoM) for a military vehicle system. Period of performance is through early 2004.

"This contract award will assist towards deploying a field-worthy FPoM for military systems and continues the work on Optimal's second contract awarded by SAIC earlier last year," said Dr. Dwight Swett, Optimal president. "This prototype contract is significant to our business strategy as it leverages our earlier work on the TACOM FPoM prototype."

SAIC has a multi-year contract with ARL to develop enabling technologies and conduct demonstrations of an integrated hybrid electric power system to provide power and energy management for all of the electric subsystems in future combat vehicle concepts. Hybrid electric power is an essential enabling technology for future combat vehicles given the number of electrically powered subsystems planned for implementation and the possible weight reductions realizable with electric power technology.

Optimal FPoM technology has become an important candidate for the prime power requirements of several future electric vehicle concepts that will mature over the next three to five years.

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.