U.S. Aerospace, Inc. (OTCBB: USAE), issues the following letter.

Letter from the Chairman

Dear Fellow Stakeholders:

Our company is beginning an extraordinary transformation. In the last few months, we have gone from what some have called a ?small, cash-strapped? defense subcontractor, to one of the most talked about companies in the aerospace industry, bidding on the largest defense contract in history: the KC-X Tanker Modernization Program. But this first bid is only one step in effectuating our ongoing long-term business strategy. Together we will continue seeking to forge an improved path, creating both a new paradigm in modern aviation, and extraordinary value for all of those who believe in our strategic vision.

?You do things when the opportunities come along? – Warren Buffett

Our first step was to assemble a world-class board of directors, composed of leading businessmen with strong backgrounds in building, financing and operating highly-successful companies, as well as winning and implementing large government contracts with the U.S. Department of Defense. We then turned our attention toward restructuring our corporate governance and enact corporate compliance procedures to ensure best practices.

Next, we began seeking new partners, partners who will join us because they wish to make a long-term investment in a business with common goals and a shared vision. Our representatives are meeting with senior government, financial and business leaders in the United States, China, India, and Eastern Europe. Our experience, connections and relationships are just beginning to bear fruit.

The Global Opportunity

The changing world economy is creating an uncommon business opportunity, for those agile enough to recognize and capitalize on it. The fundamental circumstances relating to globalization in the context of the aerospace industry were explained by Secretary of Defense Robert M. Gates in his speech to the U.S. Air Force:

?An unconventional era of warfare requires unconventional thinkers. That is because this era's range of security challenges, from global terrorism to ethnic conflicts, from rogue nations to rising powers, cannot be overcome by traditional military means alone. Conflict will be fundamentally political in nature and will require the integration of all elements of national power. Success, to a large extent, will depend less on imposing one's will on the enemy or putting bombs on targets, though we must never lose our ability or our will to unsheathe the sword when necessary. Instead, ultimate success or failure will increasingly depend more on shaping the behavior of others, friends and adversaries, and most importantly, the people in between.

?We need to be thinking about how we accomplish the missions of the future, in the most affordable and sensible way. We must ask if the ways we do business make sense? ?Secretary of Defense Robert M. Gates

?The Air Force procurement program that the President has approved and requested and that I have supported is an appropriate and responsible one that will allow the service to reset from current operations and prepare for future challenges. Those challenges will be immense and they will be diverse.

?To our international brothers in arms, I appreciate your nations' partnerships, and I hope we can find new, creative ways to keep working together -- and in ways that capitalize on our respective areas of expertise.

?We must expect continuing radical change and upheaval around the world -- at times promising, at times frightening -- before the form and patterns of a new era settle into place. As this new era actually continues to unfold before us, the challenge that I pose to you today is to become a forward-thinking officer who helps the Air Force adapt to a constantly changing strategic environment.

?Other questions I would ask you to consider go to the heart of how the service is organized, manned and equipped. What new priorities should drive procurement? In addition, we need to be thinking about how we accomplish the missions of the future, in the most affordable and sensible way. We must ask if the ways we do business make sense.

?For the good of the Air Force, for the good of the armed services and for the good of our country, I urge you to reject convention, and to make decisions that will carry you closer toward rather than further from the officer you want to be and the thinker who advances airpower strategy and meeting the complex challenges to our national security.?

The U.S. Aerospace, Inc. Business Model

Our strategic vision is centered around the principles of globalization and the efficiencies that can be offered to U.S. aerospace consumers?both military and commercial?by taking advantage of the engineering capability, manufacturing capacity, and lower cost of production overseas.

Our goal is to leverage our U.S. customer relationships, marketing capabilities, and high-technology manufacturing expertise, by forming strategic relationships with international concerns whose interest are to enter the U.S. aerospace markets by offering products and services of superior or comparable quality, while offering lower cost and greater value.

In addition, enabling the expanded utilization of foreign subcontractors will provide the U.S. government with the unique ability to utilize the defense budget in a new geostrategic role that fosters economic cooperation among those who are and would strive to be our allies.

Ultimately, making quality products at lower prices will benefit the U.S. taxpayer by delivering the most value for the money, the U.S. warfighter by conserving limited defense spending for more capabilities, the U.S. worker by preserving and creating more of the most desirable U.S. jobs, and U.S. Aerospace, Inc. by accelerating increased growth and profitability.

We believe that our growing relationships in Asia and Eastern Europe will provide us with numerous competitive advantages when entering into aerospace manufacturing contract competitions solicited by commercial and government sectors.

Our Challenges and Opportunities

Our ongoing efforts have met with strong initial success, resulting in a Strategic Cooperative Agreement with Antonov Company of Ukraine, which designs and manufactures the largest military transport aircraft in the world. Together we have submitted our first bid to the U.S. Air Force?to supply 179 refueling tankers at a total cost of $29.5 billion.

This historic and unprecedented event represents only the first of what will be many bids for military and commercial aerospace projects that we intend to submit in cooperation with our strategic partners. We anticipate this process will be both challenging and rewarding.

Changing the status quo will not be easy, and will not take place over night. Our success has already met with its share of detractors. As President Barack Obama said, ?The impulse in Washington is to protect jobs back home, building things we don't need at a cost we can't afford. The special interests, contractors, and entrenched lobbyists?they're invested in the status quo, and they're putting up a fight.? We accept this challenge, and will continue to drive forward over any such ?bumps in the road,? implementing our long-term strategic vision, and expanding our company's manufacturing and sales capabilities.

U.S. Aerospace, Inc. is organized and able to attain the higher performance that current and future business environments will demand. We believe that the more rational economy, coupled with a stronger emphasis on corporate governance and ethical business practices, create an even a more favorable environment for success at U.S. Aerospace, Inc. Our integrated operations offer the ability to secure an expanded breath of manufacturing advantages and scale our production capacities through diverse enterprise relationships with multi-national providers. We believe that the fundamental foundations of our strategies will be successful in meeting government and commercial needs for the aerospace industry.

Conclusions

U.S. Aerospace, Inc. has a deep respect for the inventions and accomplishments in aviation over the last century, as well as great enthusiasm for the innovation and creativity that will lead us into the next hundred years.

We thank our shareholders, partners, and customers for your continuing support, as we look to grow and profit together into the future.

Sincerely yours,

Jerrold S. Pressman
Chairman of the Board

July 26, 2010

About U.S. Aerospace, Inc.

U.S. Aerospace, Inc. is a publicly traded aerospace and defense contractor based in Southern California. U.S. Aerospace is an emerging world-class supplier on projects for the U.S. Department of Defense, U.S. Air Force, Lockheed Martin Corporation (NYSE: LMT - News), L-3 Communications Holdings, Inc. (NYSE: LLL - News), the Middle River Aircraft Systems subsidiary of General Electric Company (NYSE: GE - News), and other aerospace companies, commercial aircraft manufacturers and prime defense contractors. The Company supplies aircraft assemblies, structural components and highly-engineered, precision-machined details for commercial and military aircraft. It is also a leading manufacturer and remanufacturer of specialized aircraft machining tools, including vertical boring mills and large Vertical Turning Centers used to manufacture the largest jet engines, airplane landing gear, and other precision components. U.S. Aerospace has offices and production facilities in Santa Fe Springs and Rancho Cucamonga, California.

For further information please visit the Company's website at http://www.USAerospace.com.

Forward Looking Statements

Except for statements of historical fact, the matters discussed above are forward looking and made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect numerous assumptions and involve a variety of risks and uncertainties, many of which are beyond the Company's control, that may cause actual results to differ materially from stated expectations. These risk factors include, among others, dependence on its key supplier, limited capital resources, intense competition, government regulation, and difficulty in aerospace product and parts manufacturing; as well as additional risks factors discussed in the reports filed by the Company with the Securities and Exchange Commission, which are available on its website at http://www.sec.gov. Except as required by law, the Company undertakes no obligation to update any information.

For U.S. Aerospace, Inc.
Investor Relations Services
Richard Fixaris, +1-386-409-0200