PRESS CONTACT INFORMATION CG2, INC. Barbara Kohn Tel (650) 342-9853 Email: bkohn@quantum3D.com

Contact: Jill Dornan Tel: (503) 262-6505 jdornan@quantum3d.com www: www.quantum3d.com

Huntsville, AL, November 26th, 2002: CG², a Quantum3D®, Inc. company, today announced that it has received a Phase II contract from the Naval Air Systems Command (NAVAIR) through the U.S. Navy Small Business Innovative Research (SBIR) program to advance the fidelity of computer generated forces (CGF)/semi-automated forces (SAF) by implementing material encoded textures into synthetic environment databases employed by CGF/SAF systems. The Phase II contract is a continuation of the Phase I contract CG² secured last year to advance this technology. It is valued at up to $750,000 over the course of two years and illustrates CG²'s momentum in providing integrated, innovative solutions and services that address complex realtime visual computing problems.

Material encoded textures enable the use of a single, multi-spectral database that replaces separate visible, infrared and night vision databases that have previously been required for synthetic environment training applications. This new approach will result in greatly enhanced levels of realism and improve "fair-fight" capabilities for a wide range of virtual battlefield training systems by eliminating the problems associated with correlating separate databases.

"The potential impact of this technology is significant in that soldiers training in a virtual battlefield now will see friendly and opposing computer generated forces behaving more naturally and with greater fidelity simply because we have eliminated the artifacts that result when you create and correlate multiple, distinct databases," said Tom Florence, director of Federal Programs at CG². "The other key benefit is the potentially significant cost savings in database creation and maintenance that stems from the use of one database as opposed to several. By enhancing training fidelity while lowering cost, we create real training value, which is a hallmark of our company."

In recent years, the U. S. Navy Air Warfare Command Training Systems Division (NAWC-TSD) developed a method whereby a single synthetic environment database could be used for all the views employed within a simulation. CG² expanded on this technology by developing a novel technique for the design and development of a CGF/SAF environment that is not constrained by traditional polygon/vector based methods of scene rendering. Instead, this new approach exploits the use of material-encoded imagery that allows for the construction of a single synthetic environment database to be used for "out-the-window" (OTW), Night Vision Goggle (NVG), and Infrared (IR) Sensor views, thereby creating a waveband independent, unified battlefield model.

"Interoperability and 'fair-fight' problems abound in today's military training systems, which threatens the fidelity and value of synthetic environment training applications and experiments," said Chris Blasband, CG² , contract principal investigator. "Utilizing the algorithms and technology developed through this SBIR program, we will advance CGF/SAF systems to a new level of fidelity that will help create a more level playing field and reduce the 'fair-fight' problems."

Under the auspices of the SBIR program, CG² will work closely with industry leaders in the training community to enable widespread adoption of this new technology. Initially, the new material-encoded technology will be integrated with a commercial SAF, Ternion Corporation's FLAMES™ terrain option, FACT™ which will be demonstrated in its current form at I/ITSEC 2002 in the Ternion Booth (# 814) and correspondingly with a government sponsored SAF, JointSAF. CG² anticipates that over the course of the two-year contract, this new capability will be integrated into multiple products and systems, thereby bringing enhanced fidelity and interoperability to the widest possible range of U.S. and allied military customers.

About CG²
Founded in May 1995, CG², Inc., a Quantum3D company, is a leading supplier of affordable services, software, digital media and integrated products for the realtime visual computing market. CG²'s award winning products and capabilities include realtime multi-spectral 3D model and database development and conversion, turnkey solutions for institutional, appended and embedded training applications and development, operations and support of "hardware-in-the-loop" sensor simulation applications. Demonstrations of the complete line of Quantum3D Products and Solutions and CG² Services for the realtime visual computing market will be conducted at I/ITSEC 2002 in Orlando, FL (Booth Numbers 852 and 1220). For more information about this contract or other CG2 services and solutions please see www.cg2.com or contact info@cg2.com. For more information about Quantum3D or any of the Quantum3D family of realtime visual computing products, please see www.quantum3d.com or contact salesinfo@quantum3D.com.

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AAlchemy, Obsidian, Quicksilver, Ventana, VTree and Quantum3D are registered trademarks, and Independence, Sentiris, Graphite, OpenGVS, FARSIGHT, Mantis, ViXSen, IData, SoftIG and Facets are trademarks of Quantum3D, Inc. CG² is a registered trademark of CG², Inc., a wholly owned subsidiary of Quantum3D, Inc. All other trademarks are the property of their respective owners.

NOTE TO EDITORS: Solutions is the theme of Quantum3D, Inc at this year's I/ITSEC, December 2-5, Orlando, Fla., where the company will be showcasing its products and solutions for realtime visual computing in booths 1220 and 852. Quantum3D also will be announcing several major customer and partner design wins for both the visual simulation and training and embedded training markets.

Quantum3D products and solutions will als be on display at a number of customer and partner booths including: 3D Perception, Barco, Boeing, DMSO, Elumens, Glass Mountain Optics, J.F. Taylor, Lockheed Martin, Oasis, Stewart Filmscreen, SAIC, Ternion, Terrex and United Defense