Optical Systems, Inc. Issues Shareholder Update to Outline Key Milestones and Growth Initiatives

HOUSTON, Oct. 21, 2009 -- Optical Systems, Inc., (Pink Sheets: OPSY) a leading provider of software and services for the automotive retail industry today released the following letter to shareholders from B.J. Grisaffi, Chairman and Chief Executive Officer:

Dear Shareholders,

I am proud to be able to report that our company is strong and stable despite a challenging economic environment. We were able to recognize early warning signs, adapt our strategy, and gain new customers during one of the worst times in the history of the U.S. automobile industry.

The number of dealerships that are using our software and services has nearly doubled since the beginning 2009, and we are seeing more interest from potential customers than ever before.

There are more than 20,000 automotive dealerships and 7,000 recreational vehicle dealerships in the United States. Our company has a tremendous opportunity to help these dealerships not only stay afloat, but prosper in today's economy.

Our focus has always been on developing solutions that help automotive dealerships save deals, cut costs, and generate showroom and service traffic. We have armed our well-trained customer service and sales staff with the information we gained from our research and experience, so they can approach a customer or prospect with what amounts to a clear image of how our products meet their needs.

In mid-2008, we began developing several new programs aimed at become a leading, low-cost provider of customer relationship management (CRM) solutions. This initiative was part of our overall effort to help cash-starved dealerships stay in business.

Less than a year later, we launched our remoteService, remoteSupport, remoteSales, remoteMeetings and remoteTraining programs, and are pleased to report that our customers were able improve their quality of service, and in some cases, reduce costs as much as 20 percent because of these programs. A Technology Package of our remote programs is expected to launch in the next several weeks.

In Q3, we launched several new products including Save-a-Car, a cutting-edge, robust GPS tracking system that has nationwide coverage and is available with no monthly fee. Save-a-Car is a complimentary and standalone product that can easily be integrated into our existing programs. We also partnered with Triple Protection Auto Care, Inc. to market IdentiTheft®, a breakthrough identity theft solution for consumers that is sold on behalf of automotive dealers. Both Save-a-Car and IdentiTheft can be easily integrated into our BDC services, and we expect both of these products to generate additional revenue for the Company in the next 30-60 days.

The recently launched private-label version of our flagship software, Save-a-Deal is another example of our commitment to our customers. The improvements we made to security, performance, scalability and flexibility were exactly what our customers were seeking. Since the launch of this new version of Save-a-Deal, we have seen a steady increase in the number of inquiries we receive from auto dealerships across the country.

There were also several improvements we made to our own CRM resources, which now allow us to add new dealerships to our network in less than in half the time it previously took. Each of the improvements was made with our remote management capabilities and aggressive sales strategy in mind.

Finally, I am pleased to report that our Business Development Center services have been very successful in dealerships across the Southwest, and we are adding new dealerships much faster than we expected. Our service-oriented focus on remote technology, and 30+ years of experience in the automotive industry has enabled us to develop performance-based, low-cost BDC services with a solid return on investment and proven results.

Looking ahead, I am optimistic that we will continue to gain traction in the market despite the current economy. We are getting closer to finalizing several deals with automotive groups across the United States, and continue to get positive feedback from our customers about our products and services.

We are a robust organization with the resourcefulness and know-how to succeed in difficult times and lay the groundwork for further success and growth. Thank you for your continued support.

  Sincerely,
  B.J. Grisaffi
  Chairman and Chief Executive Officer

  About Optical Systems, Inc.

Optical Systems, Inc., through its operating subsidiary, Automotive Software Designers, Inc., develops technology and services for the automotive retail industry designed to maximize productivity and increase profits at auto dealerships. ASDI's flagship technology solution, Save-a-Deal, is a turnkey customer relationship management (CRM) tool for auto dealerships. Our business development center (BDC) provides a variety of services designed to help auto dealerships drive traffic to their showroom or Web site, retain customers and generate new streams of revenue. For more information, visit http://www.opticalsystemsinc.com/

SAFE HARBOR STATEMENT

Safe Harbor Statement under the Private Securities litigation Reform Act of 1995: The statements, other than the statements of historical facts, may be deemed to contain forward-looking statements with respect to events, the occurrence of which involves risk and uncertainties, including, without limitation, demand and competition for the company's products and services, the availability to the company of adequate financing to support its anticipated activities, the ability of the company to generate cash flow from operations and the ability of the company to manage its operations. As statements regarding future events concern management's estimates of future results of operations, and as these estimates are based on many elements beyond management's control, differences from management's estimates may occur, and such difference may be material. Although Optical Systems, Inc. believes the assumptions underlying the forward-looking statements contained herein are reasonable, any assumption could be inaccurate, and therefore, there can be no assurance that the forward-looking statements included in this press release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion should not be regarded as a representation by Optical Systems, Inc. or any other person that the objective and plans of Optical Systems, Inc. will be achieved.