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                        <blockquote>
                          <p><b class="bodybold">Allied Research Acquires SeaSpace
                            Corporation: International Leader in Systems For Receiving
                            and Interpreting Weather and Environmental Satellite
                            Data</b></p>
                          <p class="bodytext">Accretive Acquisition Includes Customer
                            Base in Over 30 Countries And Strengthens Industry
                            Leadership Position</p>
                          <p class="bodytext">VIENNA, Va., July 31 /PRNewswire-FirstCall/
                            -- Allied Research Corporation (Amex: ALR - News)
                            announces the acquisition of SeaSpace Corporation,
                            of Poway, California, in a cash and stock transaction.
                            The SeaSpace transaction, along with NS Microwave
                            and Titan Dynamics Systems, Inc., marks the third
                            modest acquisition in the short tenure of Allied Research's
                            new management team, as they build a strategic portfolio
                            of defense and security companies. As with the others,
                            SeaSpace is expected to quickly add to Allied Research's
                            earnings. Transaction terms were not announced. </p>
                          <p class="bodytext">SeaSpace is the world's leading
                            supplier of environmental satellite ground reception
                            systems. Its proprietary TeraScan&reg; software processes
                            earth remote sensing satellite data for mission-critical
                            applications requiring timely and accurate weather
                            and environmental information. Founded in 1982, SeaSpace
                            pioneered the development of cost-effective, easily
                            deployed systems, and has built a worldwide base of
                            over 450 military, commercial, and academic customers.
                            SeaSpace has also established market leadership in
                            development and deployment of ground stations supporting
                            the newest generation of &quot;X-Band&quot; satellites
                            being launched by NASA and other organizations. </p>
                          <p class="bodytext">General (Retired) J.H. Binford Peay,
                            III, Chairman, President and CEO of Allied Research
                            said, &quot;SeaSpace fits perfectly into Allied Research's
                            expanding strategic defense and security portfolio,
                            supplying both military and commercial customers,
                            including federal agencies, with critical safety and
                            environmental security information. We believe multiple
                            technical and administrative synergies and cross-selling
                            opportunities exist between SeaSpace and our other
                            business units. </p>
                          <p class="bodytext">&quot;SeaSpace opens yet another
                            door for Allied Research as we continue to fulfill
                            our strategic vision. It is our first acquisition
                            in the Environmental Security and Safety sector, providing
                            tools for the protection of people, physical assets
                            and the environment. It is a dynamic company, with
                            a world-class team at the helm, and we are very happy
                            to welcome SeaSpace to the Allied family.&quot; </p>
                          <p class="bodytext">SeaSpace Corporation will continue
                            to operate from its current location in Poway, California,
                            with the same management team, headed by its President,
                            Linda S. Bernstein, and Chief Technology Officer,
                            Dr. Robert L. Bernstein. </p>
                          <p class="bodytext">Dr. Bernstein said, &quot;We are
                            excited to become a subsidiary of Allied Research
                            Corporation. The outstanding support of Allied Research
                            and its management team will accelerate access to
                            new markets, allow for expanded product and core technology
                            development, and provide significant benefit to our
                            existing and future customers.&quot; </p>
                          <p class="bodytext">About Allied Research Corp.: </p>
                          <p class="bodytext">Allied Research Corporation is a
                            diversified defense and security firm, developing
                            and producing conventional ammunition, sophisticated
                            security systems, innovative training and simulation
                            products, and mission-critical safety and environmental
                            products, for markets in Europe, Asia, Africa, Antarctica,
                            North America and South America.</p>
                          <p class="bodytext">For more Information, please visit
                            the Company web site: <a href="http://www.alliedresearch.com" target="_blank">www.alliedresearch.com</a>.</p>
                          <p class="bodytext">Certain statements contained herein
                            are &quot;forward looking&quot; statements as such
                            term is defined in the Private Securities Litigation
                            Reform Act of 1995. Because statements include risks
                            and uncertainties, actual results may differ materially
                            from those expressed or implied and include, but are
                            not limited to, those discussed in filings by the
                            Company with the Securities and Exchange Commission.</p>
                          <p class="bodytext">For More Information, Contact:<br>
                            John G. Meyer, Jr., EVP and COO<br>
                            800-847-5322<br>
                            Jim Drewitz, Investor Relations<br>
                            972-355-6070</p>
                          <p class="bodytext">SOURCE: Allied Research Corporation</p>
                        </blockquote>

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