RAE Systems' Business Priorities

    Business Editors

    SUNNYVALE, Calif.--(BUSINESS WIRE)--March 28, 2005--RAE Systems Inc. (AMEX:RAE), a leading global provider of hazardous environment detection solutions, today issued a statement reiterating the Company's continuing commitment to its operational and strategic goals.
    "We want to assure our customers, distribution partners, and shareholders that we remain focused on the fundamentals of the business," said Robert I. Chen, RAE Systems' Chief Executive Officer. "Our energies are devoted to developing innovative technology and responding to the needs of our customers. These are the activities that will allow us to realize our strategic vision and deliver long-term shareholder value."
    During the current quarter, the Company has continued to demonstrate its commitment to the introduction of innovative new products. Several new products were launched, including the HazRAE Handheld Wireless Decision Support System, PlumeRAE Integrated Decision Support System, and GammaRAE II Low-Cost Gamma Radiation Detector.
    Chen further commented, "While recent communications about SEC filings and related Sarbanes-Oxley compliance matters may have been a distraction to the Company's external stakeholders, there is no change in RAE Systems' priorities. As a public company, we are fully committed to regulatory compliance and full disclosure. We are working diligently on Sarbanes-Oxley compliance and we will continue to provide public information about our progress -- while making every effort to ensure that it does not distract us from the business at hand."
    The Company's Chief Financial Officer, Donald W. Morgan, has in-depth experience in the area of Sarbanes-Oxley compliance. He noted the disclosures related to Section 404 of the Sarbanes-Oxley Act in the recently-filed 10-K contain substantially similar information as that contained in prior SEC filings and press releases. "Conforming to the Sarbanes-Oxley requirements is a complex and time-consuming process, particularly for a global enterprise with extensive operations in China," he said. Morgan noted that the Company's strong balance sheet provides a solid platform for addressing compliance matters and for driving the business forward.

    About RAE Systems

    RAE Systems is a leading global developer and manufacturer of rapidly deployable, multi-sensor chemical detection monitors and networks for homeland security and industrial applications. In addition, RAE Systems offers a full line of portable single-sensor chemical and radiation detection products. RAE Systems' products enable the military and first responders such as firefighters, law enforcement and other emergency management personnel to detect and provide early warning of weapons of mass destruction and other hazardous materials. Industrial applications include the detection of toxic industrial chemicals, volatile organic compounds and petrochemicals. RAE Systems' products are used by many U.S. government agencies, including the Department of Homeland Security, the Department of Justice, and the Department of State, as well as all branches of the U.S. military, and by numerous city and state agencies. Our end users also include many of the world's leading corporations in the airline, automotive, computer and oil industries. Our products are used in civilian and government atmospheric monitoring programs in over 50 countries. For more information about RAE Systems, please visit www.RAESystems.com.

    Safe Harbor Statement

    This press release contains "forward-looking" statements, as that term is used in Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are denoted by such words as "expected to increase." These types of statements address matters that are subject to risks and uncertainties, which could cause actual results to differ materially. Factors that could cause or contribute to such differences include, but are not limited to, the general economic and industry factors and receptiveness of the market to RAE and its products. In addition, our forward-looking statements should be considered in the context of other risk factors discussed in our filings with the Securities and Exchange Commission, including but not limited to our annual report on Form 10-K and Form 10-Q filings, available online at http://www.sec.gov. All forward-looking statements are based on information available to the company on the date hereof, and the company assumes no obligation to update such statements.

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CONTACT: RAE Systems Inc. Bob Durstenfeld, 877-723-2878 investorrelations@raesystems.com or Lippert/Heilshorn & Associates, Inc. David Barnard, CFA, 415-433-3777 (IR) David@lhai-sf.com

KEYWORD: CALIFORNIA INDUSTRY KEYWORD: GOVERNMENT ADVERTISING/MARKETING BANKING ENVIRONMENT PRODUCT SOURCE: RAE Systems Inc.

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