ELECTRO OPTIC SYSTEMS HOLDINGS LIMITED — Capital/Financing Update 2007

Dec 2, 2007

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Electro Optic Systems Holdings Limited

A.C.N. 092 708 364

Suite 2, Level 12, 75 Elizabeth Street, Sydney NSW 2000

Tel +61 2 9233 3915 Fax +61 2 9232 3411 http://www.eos-aus.com

Canberra 3 December 2007

EOS WINS SECOND AUSTRALIAN ARMY ORDER

Queanbeyan based company Fire Control Systems Pty Limited, a wholly owned subsidiary of Electro Optic Systems (ASX:EOS) has won an order to supply an additional 72 units of its Stabilised Remote Weapon System (SRWS) for use by the Australian Army.

The contract is with Thales Australia for fitting to the Australian Army’s Bushmaster Infantry Mobility Vehicle and is worth $AUD26.3 million. The units will be delivered between now and April 2008.

The order lifts EOS’ unfilled order book for SRWS to more than A$50 million.

The latest order follows an initial contract for 44 units announced on 20 December 2006 and brings to 116 the number of units ordered for the Australian Army’s Bushmaster Infantry Mobility Vehicle.

SRWS enables a weapon mounted on top of a military vehicle to be fired quickly and accurately by a gunner inside the vehicle. In this case the vehicle is Thales Australia’s Bushmaster vehicle. Thales Australia is the prime contractor responsible for the integration of the SRWS onto the Bushmaster vehicle.

The SRWS system is similar to equipment provided to the US Army’s CROWS program which has already seen hundreds of such weapon systems in use in Iraq. EOS is participating in the delivery of 450 SRWS to the US Army under the CROWS program, through its US CROWS partner Recon Optical Inc.

EOS CEO, Dr Ben Greene, says the contract comes at an important time for EOS:

“EOS participation in the US Army CROWS remote weapon system program may fall substantially in 2008 because the US Army has allocated CROWS production to a competitor. This award is subject to a strong protest by Recon Optical Inc. to be determined by the US GAO by January 2008. Meanwhile this Australian Army program is extremely important for the maintenance of internationally competitive and profitable operations in EOS and its Australian suppliers.

“All SRWS systems for Australia and Asia are produced in EOS’s Queanbeyan, NSW], production facility where recent improvements in productivity and outsourcing allow efficient production in smaller volumes than our established CROWS production. These improvements were developed specifically to allow this facility to efficiently service smaller regional programs, and Australian Defence Force requirements.”

“The Australian Army contract will enhance EOS efforts to win orders throughout the world by re-affirming the operational credibility of the product and stabilising demand on

key production resources. This purchase will be noted in key international markets where competitive procurements are moving towards conclusion in 2008.”

Further information:

Dr Ben Greene CEO Electro Optic Systems 0414 365 658