Proxity Subsidiary Developing VSTOL Type UAV Designed to Perform in Multiple Settings, Takeoff and Land On Water.

Business Editors/High-Tech Writers

NEW ORLEANS & WEST PALM BEACH, Fla.--(BUSINESS WIRE)--March 8, 2004

On Alert Systems, Inc., subsidiary of Proxity Digital Networks, Inc. (Pink Sheets:PDNW), today announced it has formed a new operating subsidiary, Cyber Aerospace Corp. The new subsidiary is currently developing vertical take off and landing (VSTOL) versions of unmanned aerial vehicles (UAV) that perform specialized missions.

Cyber Aerospace's first generation models are called individual unmanned air scouts (IUAS). When fully developed, Proxity notes that their Cyber Aerospace IUAS will operate in multiple settings including congested urban and jungle environments, where it is unsafe for conventional UAVs, as well as in desert and mountainous terrain. IUAS will perform traditional UAV surveillance, border patrol, and wide area search and sensing missions but unlike other UAVs, the IUAS are designed to be amphibious, capable of taking off and landing on land or water. IUAS could operate new and innovative clandestine reconnaissance, surveillance and target acquisition and perform hunter killer missions. As "sleepers", IUAS would fly to a location, land and use their own power to operate surveillance monitoring activities. In battlefield situations, this may be a great key to the surprise of enemy elements. With the vertical takeoff and landing (VSTOL) capabilities of a helicopter, IUAS would be able to launch and return without a runway, enabling deployment from small, concealed locations, naval ships, and building rooftops. When fully developed the IUAS should have the high-speed forward flight of a fixed wing airplane, thus long-range over-the-horizon operations would be remotely piloted or flown autonomously. With the ability to monitor pipelines, power plants and strategic targets, IUAS could potentially give Homeland Security forces a 24/7 real-time picture. The IUAS is being designed with an open access airframe fuselage that can be rapidly field-configured with a wide array of cameras, sensors, weapons, and instruments. Their multi-use platforms have applications for Military Warfighters, Homeland Defense, Firefighting, Security, Surveillance and First Response teams.

Proxity Digital CEO Billy Robinson stated, "Two versions of IUAS are planned: a micro and a mini. The micro will be hand-carried into battle by a warfighter or into a civilian situation by a SWAT team member. Estimated to weigh 10 lbs., it is a 30 in. X 40 in. vehicle that will hold a camera and 2 lb. Payload, explosives or sensing devices. The mini is being designed to be a 60 in. X 70 in. vehicle with real time communication and a 30lb# payload of equipment or explosives. Both units are estimated to be priced low: approximately $25,000 for the micro and about $75,000 for the mini. and may be scaled for special operations assignments. We anticipate proof of concept to be confirmed in 30-60 days."

The On Alert and Cyber Aerospace management teams are anchored by former and reserve military officers and business leaders well versed in the development of product lines and business models.

Joseph A. Grace, Jr., Founder, President/Chairman of the Board, Proxity Digital Networks, Inc. and On Alert Systems, Inc: A 1980 graduate of the United States Naval Academy and former nuclear submarine officer, Mr. Grace has a strong engineering and management background. He received an MBA from The University of New Orleans and has done graduate work in nuclear physics. Joining a Fortune 500 company in 1988 as a sales engineer, Mr. Grace further developed a competence in telecom, fiber optics, material science, power generation and electronics and was selected as one of three regional managers. In 1994, he became the founding President of the New Orleans Technology Council (NOTC), a technical trade association committed to transforming the Louisiana technology industry. During his tenure, the NOTC became the Louisiana Technology Council (LTC) and emerged as a technology leader for Louisiana and the southern states. Distinguishing himself as an entrepreneur and business authority, Mr. Grace participated in creating dozens of start-up companies, has been involved in the raising of over $500 million in venture capital, the selection and placement of numerous management teams and is acknowledged a noted expert in business development and marketing. Mr. Grace remains active in the military as a Captain in the United States Naval Reserve, is a recognized pacesetter in the Louisiana business community, and active on many Boards and Committees.

Steven Toups, Chief Financial Officer, On Alert Systems, Inc. is a CPA having earned his B.S. in Business Administration from Louisiana State University. Mr. Toups serves as Executive Vice President and Chief Operating Officer for Genesis Specialty Hospitals, a post acute healthcare company, where he oversees all of the operational and financial aspects of Genesis. Previously, Mr. Toups served as the Chief Financial Officer for MDeverywhere, Inc. a healthcare technology and services company headquartered in Research Triangle Park, North Carolina and the Chief Financial Officer of McKesson Automated Prescription Systems, Inc., a wholly owned subsidiary of McKessonHBOC, Inc., a pharmacy automation and productivity company. Mr.Toups has experience in operations, fund rising, crafting and managing partnerships and joint ventures (with both publicly traded and private companies), mergers and acquisitions (including international acquisitions), and various other tasks such as sales, intellectual property protection and large-scale system implementations.

Barry C. Nelsen, Vice President Government Sales, On Alert Systems, Inc. has been influential in the sales and marketing of information products and services since 1970. As President of Sales Resources Consultants, Inc., Mr. Nelsen is a leader in the design and sales of information products used in the U.S. Military. In the late 1980's, Mr. Nelsen sold scanning, storage and printing technologies to the Department of Defense ("DoD"). These technologies replaced the offset presses that were delivering 6 million pages of DoD specifications monthly. His systems also superseded the microfilm technologies that were used to reproduce drawings by the DoD and its vendors. Mr. Nelsen was the agent for Beyond.com, and sold $50 million of desktop software to the DoD. This was the first enterprise-wide EC downloaded software system used by the Defense Logistics Agency and DoD purchasing agents.

Thomas Arata, Jr., Comptroller, On Alert Systems, Inc. holds a Bachelor's degree in Accounting from Our Lady of Holy Cross College and is a graduate of the U.S. Army Finance and Accounting School. A Co-Managing Partner of OpTempo, a financial analysis and business development consultancy, Mr. Arata is experienced at all levels of business development in the government, military and private sectors. With specialized knowledge in financial operations, modeling, analysis, budgeting, purchasing, cost control, and management, Mr. Arata is uniquely qualified in advising and growing businesses and attracting investors. He has participated in the design and development of sophisticated financial modeling software for startup companies and business expansions. Mr. Arata is an advisor to Devonshire Holdings, Inc. a New York based Investment Banking firm.

Jim Alman, President, Cyber Aerospace Corp. has a Bachelor of Science degree in Aerospace Engineering from Boston University and currently serves as the Director of Engineering for AirTran Airways. Mr. Alman leads a group of engineers in the technical support of AirTran has worked on the Electromagnetic Interference (EMI) project, Secure Cockpit Doors project, the Autoland project and new aircraft introduction projects. As a test engineer for the NASA Langley Research Center, Mr. Alman designed various types of wind tunnel research hardware. He was a team member on the Daedalus Project, a MIT-based group that designed, built and flew three 114-foot span, composite human powered aircraft that holds three world records for human powered distance flying.

Mr. Bill Strobel - Vice President of Business Development, On Alert Systems, Inc./Cyber Aerospace Corp earned a BA/MBA and has a track record of success building and leading organizations in the wireless, telecom, oil & gas and military/aerospace industries. Mr. Strobel was responsible for growing revenue and profit for manufacturers of electronic components and value-added assemblies. His background includes global operations, sales and marketing, finance, distribution, and logistics. Mr. Strobel has a keen perception and understanding of business development through the implementation of business practices grounded in continuous improvement concepts.

Jim Gardiner, Vice President of manufacturing, Cyber Aerospace Corp. has been prototyping and manufacturing composites for 30 years. As president of Consolidated Yacht Corporation (CYC), he has produced 60 million dollars worth of custom one-off and short run manufacturing product since 1991. In 1993, CYC produced the composite parts for the largest sailing sloop in the world. The mast was carbon prepreg cured with a computer controlled system developed for the project. At 177 feet, it was the longest single carbon fiber part ever made. Currently Gardiner Inc. is scheduled to launch an all composite 85 foot, 65 knot motor yacht which has been designed to run nonstop from Miami to Annapolis Md. in 15 hours. Between projects, Jim produces tooling and parts for air, sea and land vehicles.

About Proxity Digital Networks, Inc.

Proxity Digital Networks, Inc., is a developmental holding company specializing in the deployment and integration of security protection technology and government contract fulfillment. The Company seeks to acquire and develop security technology. Proxity plans to enter into teaming and exclusive and nonexclusive marketing and distribution agreements with products developed for commercial, military and homeland defense. www.proxity.com

About On Alert Systems, Inc.

On Alert Systems, Inc., is a wholly owned subsidiary of Proxity Digital Networks. On Alert plans to acquire the marketing rights to offensive and defensive security technologies supporting a full line of interoperable protection disciplines. By integrating a homogeneous suite of integrated security products through teaming and licensed marketing and distribution agreements, the Company plans to introduce a new product line to multiple markets. Through exclusive global licenses, On Alert has also licensed a developing system that use acoustical and ultrasonic means to sense and evaluate activity pertinent to law enforcement, security and defense industries. Their prospective clients all share the need for enhanced security, mobile communication platforms and increased surveillance capabilities

About Cyber Aerospace Corp.

Cyber Aerospace Corp. is an operating subsidiary of On Alert Systems, Inc. The company is assembling a team of military experts and aerospace and composite engineers to design and build new generation UAV's known as IUAS. They will develop VSTOL mission specific and scalable designs. Cyber Aerospace also is planning to market mission specific airships to be used in surveillance and communication capacities. Cyber plans to also provide engineering support and systems integration for the airships. All of Proxity subsidiaries will market to different branches of the U.S. and allied governments

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