Cyber Defense Systems Reports Successful Demonstration at Recent Industry Events and Announces Trade Show Schedule for the Remainder of 2005.

ST. PETERSBURG, Fla. -- Cyber Defense Systems, Inc (OTCBB: CYDF), a designer and developer of next generation unmanned aerial vehicles (UAV's), has recently returned from a successful showing at the Paris Air Show and has once again impressed observers with their CyberBug(TM) surveillance UAV.

Cyber Defense displayed three sizes of the CyberBug(TM), as well as the vertical take off and landing (VTOL) CyberScout(TM) during the third unmanned aerial vehicle air show at Webster Field in front of nearly 5,000 people, including Secretary of the Army Francis J. Harvey and U.S. Rep. Steny H. Hoyer (D-Md.).

The military has come to rely on unmanned aerial vehicles (UAV's) for reconnaissance and attack missions, helping to alleviate loss of life in Afghanistan and Iraq. "The Defense Department has spent $1 billion since 2000 to research aerial drones," stated Deputy Assistant Secretary of Defense Thomas J. Kuster.

The CyberBug(TM) was utilized as a surveillance vehicle at the 12th Annual Southern Maryland "Blessing of the Bikes" event, held at the Charles County Fairgrounds in La Plata, MD. This event is often viewed as an annual curse by local law enforcement. The light-weight UAV provided aerial video to officers on the ground, readily alerting them to crowd activities, accidents, and other disturbances in the area. The UAV's capabilities helped alleviate the pressure commonly felt by law enforcement when monitoring this event. Cyber Defense's UAV's have capabilities for both law enforcement and military applications.

The Washington Post highlighted the use of the CyberBug(TM) by the Charles County law officials and the role it played at the Baltimore air show in the June 28th edition.

(http://www.washingtonpost.com/wp-dyn/content/article/2005/06/27/ AR2005062701643.html). (Due to its length, the preceding URL may need to be copy/pasted into your internet browser's address field.)

Captain Michael Wyant of the Charles County Sheriff's Office saw a multitude of applications for use of the CyberBug(TM) with law enforcement. "It's certainly something of great interest to us," Wyant said. "It's really cutting-edge right now."

The tremendous feedback Cyber Defense Systems has received in response to the CyberBug(TM) capabilities and applications has encouraged the Company to participate in two trade shows in Britain in September. Later in the year the Company also plans on attending the Mid-East Air Show in Dubai, as well as the Unmanned Vehicle Show with UVS in November. This show coincides with the International Chiefs of Police show.

Barry Nelson, Vice President of Sales for Cyber Defense said, "Coming off a great show experience at the Paris Air Show and the UAV conference in Baltimore, we intend to participate in other shows to acquire new international sales distributors for the CyberBug(TM) product line. The show in Paris brought many new prospects for our distribution program and we want to continue to attract additional resellers as we ramp up manufacturing."

About Cyber Defense Systems:

Cyber Defense Systems, Inc. is a designer and developer of next generation of UAV's. Cyber Defense also has the exclusive global government and military marketing rights to Techsphere Systems International LLC Spherical and Semi-spherical airships. Cyber Defense is currently marketing the airships and their CyberBug(TM) UAV's to various branches of the U.S. government and U.S. allies as multi-use platform vehicles capable of deployment in surveillance and communication operations. http://www.cduav.com

Cyber Defense Systems, Inc. (OTCBB: CYDF) is an operating subsidiary of Proxity, Inc. (Pink Sheets: PRXT).

About Proxity:

Proxity, Inc. is a developmental holding company specializing in the deployment and marketing of security protection technology and government contract fulfillment. With 18,750,000 shares in CYDF, Proxity is the Company's majority shareholder. Proxity seeks to acquire and develop security technology. The Company plans to enter into teaming and exclusive and nonexclusive marketing and distribution agreements with products developed for commercial, military and homeland defense. http://www.proxity.com.

This release contains statements that constitute forward-looking statements. These statements appear in a number of places in this release and include all statements that are not statements of historical fact regarding the intent, belief or current expectations of the Company, its directors or its officers with respect to, among other things: (i) the Company's financing plans; (ii) trends affecting the Company's financial condition or results of operations; (iii) the Company's growth strategy and operating strategy; and (iv) the declaration and payment of dividends. The words "may," "would," "will," "expect," "estimate," "anticipate," "believe," "intend," and similar expressions and variations thereof are intended to identify forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the Company's ability to control and those actual results may differ materially from those projected in the forward-looking statements as a result of various factors.