AERT’s 2008 Letter to Shareholders

Dear Shareholders,

On behalf of AERT and its Board of Directors, I am writing to share with you a number of exciting developments that I strongly believe will favorably affect AERT’s near term future, and to communicate to you why I believe our company is in a unique market position to once again rapidly grow both our top and bottom lines.

1. We ARE a Green company. It is currently estimated that 100 billion dollars will be spent over the next 5 years on green building products and this estimate continues to grow. Many companies claim to be "green," but our product lines are and have always been directly responsive to consumer and investor demand for environment-friendly technologies, processes, and products.

2. AERT has continued to grow and gain market share. In the renovation and remodeling categories, many of our competitors have lost ground. Some have even ceased operations during this past year. AERT, on the other hand, has continued to expand capacity and distribution. Over the past 18 months, we have added 9 regional distributors for our MoistureShield® line of green decking products and components. With 14 distributors currently, we anticipate achieving nationwide distribution of MoistureShield® by April 1, 2008. Meanwhile, sales of Weyerhaeuser ChoiceDek® continue to expand, and retail sales levels have increased year over year.

3. We have taken major steps to rein in raw material costs and mitigate supply uncertainties. While oil and petrochemical prices have skyrocketed, AERT has invested heavily in plastic recycling technology and infrastructure. Our new Advanced Resource Recovery Project (ARRP), which we announced last month, will reduce our raw material costs and improve and ensure supply. The ARRP facility, with infrastructure and support provided by Oklahoma government authorities and the Cherokee Nation, has recently been funded by Allstate Investments. This facility will allow us to recycle various sources of previously non-renewable polyethylene plastics from the waste stream, which will create a proprietary source of lower cost raw materials and help to insulate AERT from raw material price fluctuations in the future.

4. AERT has begun selling in China. And we've received the endorsement and recognition of business and political leaders in China that will catapult us to a leadership position. The upcoming Olympics, with its many building programs and the government of China's emphasis on environment-friendly technologies and green products add up to a huge potential market for our Company.

5. World-class financial institutions are behind us now. AERT has established relationships to help finance our growth with leading capital market partners and continues to attract interested private and institutional investors to the company. Canaccord-Adams, the global investment bank, for example, helped us with a $10 Million private placement, and has launched institutional coverage of our stock. Allstate Investments, the wholly-owned investment management subsidiary of Allstate Insurance, provided us with a $5 Million short term bridge financing and just invested $13.5 Million in our ARRP facility in Watts, Oklahoma.

6. AERT's story is attractive to socially responsible institutional investors. As AERT becomes recognized as a truly Green company, we anticipate that Green mutual funds and other socially responsible investment groups will find our business attractive, and that our shareholders will benefit from the increasing valuations being given to companies in this space. In short, we believe that the stock market will begin to recognize and reward AERT for its market position.

7. We are just beginning to spread the news. We just hired Nicholson-Kovac, a renowned, nationwide marketing and advertising agency, to tell our story within the industry. NK's client list includes such prestigious names as Owens-Illinois, 3M, LG Electronics, HILTI, and FMC. We will soon announce the retention of a new investor awareness and relations firm that will improve our communications with you, our shareholders, as well as the general investing public. So please make sure your seatbelts are fastened, put your tray tables up and place your seats in their full, upright position!

In summary, while business pundits and naysayers have written obituaries for anything having a link to the housing market, our company has quietly pierced the $100 million annual run-rate (5 times what it was in 2001!) and is gaining market share from competitors. We are diversifying our product and customer mix. We are entering foreign markets. We are taking significant steps to reduce costs, improve efficiencies, and to highlight our higher margin products in the North American market. We are strengthening all levels of management in anticipation of the rapid growth and opportunities we foresee.

I personally believe that AERT stock is undervalued and wish to emphasize that it is not the intent of management nor of the Board of Directors to take AERT private or to become delisted from NASDAQ. While no one can guarantee stock price performance, we can pledge that AERT will increasingly strive to make capital deployment and operating decisions intended to increase value for all shareholders.

As we enter our 20th year, I have never been more proud of the hard work and determination of our employees and partners. With this letter, all of us at AERT wish to thank you for your investment and your support. Our once young company has now become the definitive name in the technology-driven building materials market and is at the forefront of the burgeoning GREEN movement. Our 2008 commitment to you is to do all we can to generate strong cash flows, solid net income and attractive returns for you, our loyal shareholders.

Very truly yours,

Joe Brooks

About AERT:

Since 1989, AERT has pioneered the use of recycled polyethylene plastic in the manufacture of composite building materials. With its constantly evolving portfolio of patented and proprietary recycling technologies, AERT has been widely recognized as a leader in resource conservation innovation and received the EPA Award for Environmental Excellence for its process of converting scrap plastic to composite outdoor decking. AERT converts reclaimed plastic and wood fiber waste into quality outdoor decking systems, fence systems, and door and window components. The Company is the exclusive manufacturer of Weyerhaeuser ChoiceDek® decking, which is available in multiple colors and is sold in all Lowe’s Home Improvement stores. See www.choicedek.com for more information. AERT’s MoistureShield® decking program is expanding and products are available in many parts of the U.S. now, with national distribution planned for 2008. See www.moistureshield.com for product information or to find a regional distributor or dealer. AERT operates manufacturing facilities in Springdale, Lowell, and Tontitown, Arkansas; Junction, Texas; and Alexandria, Louisiana. For more information on the Company, visit www.aertinc.com.

Certain statements in this news release regarding projected results of operations, or, projected results of financial plans or future strategies and initiatives, including, but not limited to, projections of revenue, projections of profitability, any and all future expectation, and plans for future activities may and should be regarded as ``forward-looking statements'' within the meaning of the Securities Litigation Reform Act. These statements involve, among other things, known and unknown risks, uncertainties and other factors that may cause AERT, Inc.'s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. AERT currently is considering, but may or may not in the future implement any or all of the items and issues listed in any planned budget or strategic initiative, due to, among other things, known and unknown risks, uncertainties and other factors.

AERT, Inc. undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, change in strategy, or otherwise. The above mentioned listing of risks and uncertainties is not inclusive. For a more detailed discussion of some, but not all, of the risks and uncertainties that may affect AERT, Inc., see AERT, Inc.'s filing with the Securities and Exchange Commission, including its Annual Report on Form 10-K, for the fiscal year ended December 31, 2006 and its Quarterly Report on Form 10-Q for the quarter ended September 30, 2007.

Contacts

For AERT, Inc.:

The Birkhill Group, LLC

David McCarthy, 212-576-1515

Fax: 212-576-1117