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AEROS PASSES MAJOR MILESTONE IN THE DEVELOPMENT OF STRATOSPHERIC AIRSHIP FOR SOUTH KOREA

AIRSHIP ENVELOPE DESIGN MEETS KOREA GOVERMENT REQUIREMENTS

Los Angeles, California- June 28, 2002- Worldwide Aeros successfully completed its final-level Critical Design Review (CDR) on June 14-15, 2002 for the development of a 50 meter airship envelope being built under contract with the Korea Aerospace Research Institute (KARI). The CDR effectively completes the program's transition from its design phase to a test and production phase.

The review was the culmination of months of activity, including numerous subsystem and assembly design reviews, and it clearly demonstrated the ability of the integrated design solution to meet the stratospheric airship mission requirements. The CDR focused on key aspects of the airship envelope design including requirements compliance, production specifications, development schedule and risk identification/ mitigation.

"We are very pleased with the results," said Andre Rybkin, Aeros Chief Engineer. "Our goal has been to build the 50 M airship envelope on time, on budget and to the KARI requirements. Aeros has passed a significant hurdle."

In summary, the CDR successfully demonstrated the readiness of the program to transition to the production stage, marking a significant step towards the development of one of the first operational stratospheric airship prototypes. The next major program milestone, the proof test of technological models, is scheduled for this month.

For more information about Aeros, please visit the web site at http://www.aerosml.com.

KARI was established by the South Korean Government as a research institute exclusively for the development of aerospace technology, in accordance with the national development plan for the aerospace industry.

For more information about KARI, please visit its web site at http://www.kari.re.kr/

About Stratospheric Airship Program

The stratospheric airship offers a cost effective alternative to low earth orbit satellites. Aeros reports that the main advantages over the satellites are cost and payload recoverability. The concept is to station the unmanned airships at an altitude of 65 thousand feet and remotely maneuver them in a geostationary position. From that altitude, the over the horizon capabilities are enhanced to make it an effective platform for radars and electro optical surveillance. Beyond the military application their ability to carry wireless communication antennas is seen as the most lucrative civil application for the technology.

Igor Pasternak, Aeros CEO explained that the stratospheric airship program at Aeros evolved from the research and development of manned airships as well as unmanned aerostatic systems. As early as 1995, Aeros was considered the most qualified company to lead the revolution in the research and development of a stratospheric airship platform to carry payloads for the expanding wireless telecommunications sector.

Pasternak recounts that; "In 1997, one of the first serious U.S. based concept and feasibility studies was undertaken by the Skysat Communications Network Corporation. Aeros acted as the lead technical advisor for the project, allowing Aeros to identify the technical risks and offer solutions to solving the problems that are inherent in such a project. Skysat did not complete their funding requirements to build the first airship, however the experience we gained was a key element in Aeros winning the South Korean bid with KARI earlier this year."

The US homeland security issues have raised the stratospheric airship program to a new level of importance for our country. It is reported that before the end of this year the US government will issue a request for proposal for the development of the first proto-type unmanned stratospheric airship. The Aeros Company will be considered the front-runner in the competition.