Alpha Virtual, Inc. Initiates Government Business Development Initiatives by Signing Consulting Agreement with Perceptronics Solutions, Inc. and Adding Principals to Advisory Board.

Business Editors/High-Tech Writers

LOS ANGELES--(BUSINESS WIRE)--July 22, 2003

Alpha Virtual, Inc. (OTCBB:AVRT) today announced that it has signed a consulting and business development agreement with Perceptronics Solutions, Inc. to help introduce the Company's products and solutions to the government sector. Alpha Virtual has also added Perceptronics Solutions' principals, Dr. Gershon Weltman and Dr. Amos Freedy, to its Advisory Board.

Charles Lesser, interim president of Alpha Virtual, said, "Dr. Weltman and Dr. Freedy are the founders of Perceptronics, Inc. (now Alpha Virtual, Inc.) and were responsible for generating over $300 million in revenues for the company during their tenure, including numerous R&D and production contracts from government agencies from around the world, including the U.S. Government. We feel that with our acquisition of the technology of Veridicom, Inc., Alpha Virtual will have a viable security and biometric solution to offer to government agencies. Dr. Weltman and Dr. Freedy have a proven track record of obtaining government contracts and already have a history with Alpha Virtual and they are the best candidates to help us obtain entry into this sector." Mr. Lesser added, "We feel that the experience and knowledge that these individuals bring to the table could be extremely beneficial to our company in several different aspects of our business."

Dr. Amos Freedy is the president of Perceptronics Solutions, Inc. He is a recognized expert in the planning and management of large-scale development and production programs involving a combination of engineering, bioengineering and behavioral disciplines, with particular emphasis on artificially intelligent human-computer systems. Dr. Freedy has been principal investigator on numerous projects in the areas of robotics, computer decision aids and various artificial intelligence applications. Among his most important projects was the management of the development and production and delivery of the internationally known SIMNET virtual simulation system to DARPA and the U.S. Army. Dr. Freedy has a Ph.D. in Engineering, Electronics and Man-Machine Systems as well as an M.S. in Engineering, Electronics and Bioengineering and a B.S. in Electrical Engineering, all from UCLA.

Dr. Gershon Weltman serves Perceptronics Solutions, Inc. as vice president and principal scientist. He specializes in advanced training and simulation systems for individuals and teams. In addition he is a lecturer in the UCLA School of Engineering and Applied Science on Engineering and Society, a course emphasizing ethics and societal values. Dr. Weltman was a member of the U.S. Army Science Board, a select group that advises the Army on science and technology matters, and recently served on the Defense Science Board's Task Force on Training for Future Conflicts. Dr. Weltman has published numerous scientific, technical and strategic papers, and has presented lectures and briefings at government, business and professional meetings. Dr. Weltman also serves as a consultant to several companies and organizations. Dr. Weltman holds a Ph.D. in Engineering and Biotechnology from UCLA, and an M.S. and B.S. in Engineering from the same institution.

About Alpha Virtual

Alpha Virtual, Inc. is a developer of secure Web collaboration and biometrics solutions based in Los Angeles, Calif. It builds and sells innovative Web collaboration products that allow developers to add real-time Web cruising, rich media sharing, groupware, and chat/messaging features to existing Web sites quickly and easily. The company was formerly known as Perceptronics with a 30-year-old track record in international defense industry software development. Visit www.alphavirtual.com for more information. Through the acquisition of EssTec, Inc., Alpha Virtual has now also become a hybrid technology platform and services company that has expertise in software application development, mobile data communications technology and the understanding of the needs of targeted businesses' issues to develop mobile enterprise and workforce management solutions in several industry segments including Financial Services, Field Service Automation, and Health Care.

This press release contains forward-looking statements that are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, general business conditions in the industry, changes in demand for products, the timing and amount or cancellation of orders and other risks detailed from time to time in Alpha Virtual's filings and reports with the Securities Exchange Commission, and published on the Edgar system.