Startec Inc. Announces the Loss of Sale Contract

Startec Management has been notified by a communication dated June 10, 2002 that the Buyer is unable to meet a Condition Precedent. The decision of this Buyer to withdraw was not the result of any action or inaction on the part of Startec, but was announced as a failure of funding contingency.

Startec Inc. Announces the Loss of Sale Contract

Startec Inc. recently announced the expected sale of their ownership interests in three Section 29 qualified systems. The sale had an expected closing date in early June, however the closing was subject to certain conditions being met by both the buyer and the seller. Startec Management has been notified by a communication dated June 10, 2002 that the Buyer is unable to meet a Condition Precedent. The decision of this Buyer to withdraw was not the result of any action or inaction on the part of Startec, but was announced as a failure of funding contingency. Therefore the purchase agreement for the three Section 29 Units has been terminated.

Startec Management has already begun exploring alternative sales prospects. Komar Industries, Inc., Startecs joint venture partner in the marketing of the three Section 29 units, is the manager of the venture, and is presumably also working on alternative sales.

Startec Management has tentatively scheduled the Annual Shareholders Meeting for November 12, 2002. The notice with the agenda and location will be mailed 90 days prior to the meeting.

If you have any questions, feel free to visit the company website at www.startecinc.com, or e-mail us at startecenergy@aol.com. Further contact information is available on the website.

Except for the historical information contained in this press release, certain statements contained herein are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as believes", expects", anticipates", intends", plans", seeks", estimates" or variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are based upon managements expectations and beliefs concerning future events and are subject to uncertainties, risks and other factors, (including, but not limited to, those specified below), which are difficult to predict and in many instances are beyond the control of the company. As a result, actual results of the company may differ materially from those expressed or implied by such forward-looking statements.