SOURCE: Extreme Motorsports of California, Inc.

June 07, 2007 09:53 ET

Extreme Motorsports of California, Inc. Initiates Stock Repurchase Program, Prepares to Close Out 504 Offering

BAKERSFIELD, CA--(Marketwire - June 7, 2007) - Extreme Motorsports of California, Inc. (PINKSHEETS: ETMO) ("Extreme" or the "Company") has initiated a stock buyback program contributing up to 2% of profits on a quarterly basis to purchase free trade shares in the open market. The repurchased shares will be cancelled and retired, resulting in a reduction of the total issued and outstanding shares of the Company, and not retained as treasury stock. The Company has not placed a cap on the aggregate value of shares to be repurchased and intends to continue the program for the foreseeable future until such time as management and the board of directors determines the number of issued and outstanding shares have been sufficiently reduced.

"We believe the quoted price per share of Extreme's common stock is not an accurate metric of our value, as the recent announcement of a new distributor and contract shows," commented Alan McCaa, President and CEO of Extreme Motorsports. "Our profit margins on these and other future projects are sufficient to both fund the buyback program and our strategic growth plans, such as expansion of our manufacturing facility and the hiring, training and retention of key staff to ensure the quality standards customers have come to expect from Extreme."

In addition to the stock buyback, Extreme is preparing the necessary SEC and state filings to close out its sale of securities to accredited investors that were exempt from registration under Rule 504 of Regulation D under the Securities Act of 1933. To date, the Company has sold approximately $450,000 of its securities under Rule 504.

"We have sold a limited number of securities under our 504 offering since February (of 2007)," McCaa commented. "We now have cash flow from operations that will sustain our business and growth plans for the short and long term. It's also clear that any substantial fundraising conducted at the present time would be prohibitively dilutive, and counteractive to our stock buyback program."

In addition to the above announcements, the Company has also received an additional 47 million shares under its previously announced share cancellation program that have been retired, representing a reduction in the current "public float" of approximately 5%.

About Extreme Motorsports of California, Inc.

Extreme Motorsports of California, Inc., operating under the trade name "Xtreme Motorsports," is a manufacturer of custom and production-line sandrails, desert and dual sport racecars. Founded in 1983, Extreme's sandcars have been sold to customers in England, the United Arab Emirates, Australia, South America and the US. For more information, visit the corporate web site www.xmssandcars.com.

Forward-Looking Statements

Certain statements in this release, and other written or oral statements made by the Company, including the use of the words "expect," "anticipate," "estimate," "project," "forecast," "outlook," "target," "objective," "plan," "goal," "pursue," "on track," and similar expressions, are "forward-looking statements" and are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance, or achievements of the company to be different from those expressed or implied. The Company assumes no obligation and does not intend to update these forward-looking statements and takes no obligation to update or correct information prepared by third parties that are not paid for by the Company.

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