RAE Systems Enhances AreaRAE Family of Toxic Gas and Radiation Monitors with Wireless Video

SUNNYVALE, Calif. May 17, 2004 RAE Systems Inc. (AMEX: RAE), a leading global developer and manufacturer of rapidly-deployable, multi-sensor chemical and radiation detection monitors and networks for homeland security and industrial applications, today announced that it has added wireless video capabilities to its family of AreaRAE hazardous environment monitors, which includes the AreaRAE, AreaRAE IAQ and AreaRAE Gamma.

The addition of 16 frame-per-second, full motion color video enables better decision making by providing first responders with visual confirmation when toxic or radiation sensors alarm. This can accelerate the determination of a real rather than false alarm. Being able to monitor, identify and appropriately respond to visible threats is a critical enhancement to the assessment of public venue security and hazardous materials response. The AreaRAE family now provides comprehensive monitoring of both seen and unseen threats.

The AreaRAE family of monitors is based on a one-to-five sensor monitor equipped with a wireless, RF (radio frequency) modem which allows the unit to communicate and transmit readings and other information on a real-time basis with a base controller located up to two miles away. The AreaRAE Gamma combines toxic gas and gamma radiation detection. The AreaRAE GPS includes real time location readings. The AreaRAE IAQ is the only wirelessly equipped indoor air quality (IAQ) monitor to combine a Photo Ionization Detector (PID) with traditional measures of IAQ such as temperature, humidity, carbon dioxide (CO2), and a user-selected toxic gas sensor in a one-to-five sensor package.

Being able to actually see what is going on at the site of a HazMat incident or in a public venue security monitoring situation is critically important to first responders and incident commanders, said Robert I. Chen, CEO of RAE Systems. With the addition of video monitoring, incident commanders now have additional insight from the monitoring of both seen and unseen threats, and this in turn enables improved decision making that saves lives.

The integration of video has many uses, including HazMat and emergency response, homeland defense applications, public venue protection, fenceline monitoring, port security, border crossings, as well as a range of industrial security and monitoring settings. For more information about the AreaRAEs new video capabilities, please visit the RAE Systems booth at the Homeland Security Solutions Conference & Exhibition in Baltimore, Maryland on May 18-19, 2004. This capability will be available in late summer 2004.

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 worlds 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 continue to be strong. 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 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.