RAE Systems Inc. launched ToxiRAE 3 for first responders. This carbon monoxide monitor has already proven itself by providing life-critical and time-critical information to save lives. The ToxiRAE 3 for First Responders is a full-featured single-gas monitor that offers unequaled cost-of-ownership value. The compact, handheld monitor is designed to clip to a paramedic's 'First-In' bag to provide situational awareness about the presence of carbon monoxide, a toxic gas that is the by-product of incomplete combustion and can be found in homes with defective furnaces and those using stoves for heating with improper ventilation. The instrument includes a large easy-to-read display for both toxic gas concentration and 'days remaining' for the battery. It has a loud 96dB audible alarm, bright red flashing LEDs and a vibration alarm. It operates over an extended temperature range of-4 degrees Fahrenheit to +140 degrees Fahrenheit making it ideal for year round deployment. The ToxiRAE 3 is compatible with the AutoRAE Lite automated bump-test and calibration station.

RAE Systems Inc. reported cash provided by operating activities for the nine months ended September 30, 2009 of $4.2 million, which included a net loss of $4.0 million adjusted for non-cash items. This was offset by $8.2 million of cash generated from working capital. Purchases of property and equipment for the nine month period were $2.2 million.

RAE Systems Inc. reported unaudited consolidated financial results for the third quarter and nine months ended September 30, 2009. For the third quarter, the company reported revenue of $19.9 million compared with $28.8 million in the third quarter of 2008. The year-over-year decrease is primarily attributable to the global recession, two significant non-recurring orders recorded in third quarter of 2008 and a disruption of sales activity in China due to recent management changes. The third quarter 2009 GAAP net loss was $3.5 million or $0.06 per share. Excluding the impact of the reserve for the potential FCPA settlement, non-GAAP net income was $11,000 or $0.00 per share. These compare with third quarter 2008 net income of $554,000 or $0.01 per share. The company reported operating loss from continuing operations of $3.9 million, loss from continuing operations of $3.6 million or $0.06 per diluted share against operating income from continuing operations of $1.3 million, income from continuing operations of $0.6 million or $0.01 per diluted share last year. Loss from continuing operations before income taxes for the period was $3.9 million against income from continuing operations before income taxes was $1.1 million for same period a year ago. For the nine months ended September 30, 2009, revenue was $58.9 million compared with $71.4 million for the same period in 2008. GAAP net loss was $6.7 million or $0.11 per share and the non-GAAP net loss was $3.2 million or $0.05 per share. This compares with a net loss of $2.2 million or $0.04 per share for the same period in 2008. The company reported operating loss from continuing operations of $7.0 million, loss from continuing operations of $7.5 million or $0.11 per diluted share against operating loss from continuing operations of $0.6 million, income from continuing operations of $2.1 million or $0.04 per diluted share last year. Loss from continuing operations before income taxes for the period was $7.4 million against $1.0 million for same period a year ago. The company expects full year 2009 revenue of between $80.0 million and $82.0 million.