EXHIBIT 99.1

The Hazardous Environment Detection Company

RAE Systems Inc.
NASDAQ OTC BB: RAEE.OB

Robert I. Chen
President and CEO

Joseph Ng
CFO, and VP Business Development

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The Hazardous Environment Detection Company

Safe Harbor

Safe Harbor Statement
This presentation 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 "plan to accelerate", and "substantially 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 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.

[LOGO] RAE SYSTEMS

The Hazardous Environment Detection Company

Market Model
Total available market

[Pie Chart]

Portable $400M
Portable market expanding (2X?)
  1. Homeland Security
  2. Radiation Sensing

Energy

Wireless Network
Homeland Security ($7.9B)

Environmental

Industrial (process control)

Medical (drug detection)

IAQ/security ($2.4B)

Source: Frost and Sullivan 2001, and 1998 Homeland Security Budget 2003

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The Hazardous Environment Detection Company

Growth

[BAR CHART]

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The Hazardous Environment Detection Company

Profit

[BAR CHART]

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The Hazardous Environment Detection Company

Homeland Security Customers
Since 1996

• U.S. Secret Service
• U.S. State Department
• U.S. Department of Justice
• U.S. Marines
• U.S. Navy
• U.S. Army
• U.S. Coast Guard
• Many other state and local and federal agencies

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The Hazardous Environment Detection Company

Homeland Security Funding
RAE Systems addressable

$ Million	FY2002	FY2003	FY2004
Equip First Responder Teams (1)	347	770
Train State and Local First Responders (2)	227	665
Enhance Communications Infrastructure to    Support Interoperability (3)	113	1,365
Border Patrol – INS (4)	1,324	1,471
Inspections – INS (1, 4)	946	999
US Customs – North Border Inspections (1, 4)	649	744
US Customs – Maritime Inspections (1,4)	464	684
US Coast Guard – ports, waterways, and coastal     security (1, 4)	682	1,213
Total Budget addressable	4,752	7,911	~ 2003

(1) RAE instruments
(2) RAE Training classes
(3) AreaRAE
(4) ASPEN plus radiation/motion/video

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The Hazardous Environment Detection Company

Market Segments and RAE Systems Focus
Right products for the right areas: MultiRAE, AreaRAE, GammaRAE, NeutronRAE

National Strategy Category	Equipment	Systems & IT	Training	Mgmt Consult
Intelligence and Warning	$$	$$$	$	$
Border and Transportation Security	$$$ [Logo]	$$$	$$	$$
Domestic Counterterrorism	$	$$	$$	$
Protecting Critical Infrastructure & Key Assets	$ [Logo]	$$	$	$
Defending Against Catastrophic Threats	$$ [Logo]	$	$$	$
Emergency Preparedness & Response	$$$ [Logo]	$$	$$$ [Logo]	$

Key (over three years) $ = tens of millions $$ = hundreds of millions $$$ = billions
                                      [Logo] = RAE FOCUS

Source: The Homeland Security Market and Investment Strategies, page 19, The O’Gara Company 5/03

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The Hazardous Environment Detection Company

Strategy for Growth

• Core Business
  – Capture Homeland Security (HLS) grants to grow core business; continue selling to first responders
  
  
• Emerging opportunities
  – Leverage RAE wireless sensing technologies to capture emerging opportunities such as cargo container security and indoor air quality/security applications
  
  
• Explore Financing Options
  – No debt, cash positive (>$7M)
  – Major investment banker signed

[LOGO] RAE SYSTEMS

The Hazardous Environment Detection Company

Market Size, Strategy and Share Objective

Market	TAM ($M) 2003	Penetration Strategy	Share Objective (2007)
Core Business	$400M and growing rapidly – Homeland Defense	Continue current mix of industrial, environmental and security focus using existing distributor channel. Focus on first responder trainers. Radiation sensors for borders and port patrol	10-15%

[LOGO] RAE SYSTEMS

The Hazardous Environment Detection Company

Market Size, Strategy and Share Objective

Market	TAM ($M) 2003	Penetration Strategy	Share Objective (2007)
Cargo Containers Security	12M Retrofit Containers 1-1.5M p.a. New Containers	Provide the "missing link" by integrating sensors to RFID, e-Seals, to create Secure and Smart Containers and wireless data on-ramp to transmit data to US Customs and Coast Guard Partners: Network: Savi Tech, All Set, Qualcomm Logistic Providers: LINE of Hutchison, Maersk Container Mfg: CIMC (40–60% market share) Carriers: Maersk, OOCL, Hyundai, Evergreen, P&O, COSCO	3-5%

[LOGO] RAE SYSTEMS

The Hazardous Environment Detection Company

Market Size, Strategy and Share Objective

Market	TAM ($M) 2003	Penetration Strategy	Share Objective (2007)
Indoor-air- quality/ security	$2,000	Provide sensor modules and gateway to building security, HVAC & energy management system. Angles: demand for better building security and indoor air quality.	1-2%

[LOGO] RAE SYSTEMS

The Hazardous Environment Detection Company

TOPOFF II
Seattle and Chicago, May 2003

RAE Systems sensor data test

• Near real-time tactical information sharing on global basis (if required)
• GOTS/COTS interoperability

[GRAPHIC]

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The Hazardous Environment Detection Company

Secure Smart Container

RAE Sensor

• Intrusion: light, motion, sound all-in-1
• Radiation, chemical & environment monitors
• Local or remote (wireless)

ALLSeal

• Secure electronic seal
• Global tracking

RAE Sensor Receptacle

• Standard sensor interface
• Snap-in / snap-out operation

RAEPower

• Snap-in battery pack
• Primary or rechargeable batter

[GRAPHIC]

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The Hazardous Environment Detection Company

Indoor Air Quality / Security

NYSE [GRAPHIC]
Buffalo Stadium [GRAPHIC]
Theatre [GRAPHIC]

• 12.3 billion square feet of office building space
• Symbols of American power are high risk
• Embassies
• Federal buildings
• HVAC-Sensor actuator to screen air
• Public venues
• A $2.4 billion market

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The Hazardous Environment Detection Company

Highest Priority Spending

• Cargo Screening technology for WMD at ports
• Equipment for First Responders
• Multi-modal cargo security: tracking and authentication
• Screening technology for aviation security
• Physical security upgrades

Source: The Homeland Security Market and Investment Strategies, page 30, The O’Gara Company 5/03

[LOGO] RAE SYSTEMS

The Hazardous Environment Detection Company

Summary

• Patented technology (17 patents)
• Well-positioned to win in Homeland Security
• Strong board and management
• Profit and growth are accelerating
• Worldwide presence in Europe, North America and Asia

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