AccelRate Power Systems Inc.

AccelRate Power Systems Inc.

October 25, 2006 18:37 ET

AccelRate Announces Third Quarter Results

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 25, 2006) - AccelRate Power Systems (TSX VENTURE:APS)(FWB:KCG), the technology leader in "High-Speed" battery chargers, today announced its financial results for the third quarter ended September 30, 2006. All results are in Canadian dollars.

During the three months ended September 30, 2006, AccelRate recognized total revenues of $26,606 from licenses, royalties and product sales, compared to $105,293 for the three months ended September 30, 2005. Overall, on a year-to-date basis, revenue was up over 70% to $183,249 in comparison to $105,293 in the first nine months of 2005. Operating expenses for the three months ended September 30, 2006 of $224,255 were lower than the operating expenses for the three months ended September 30, 2005 of $291,348 primarily due to decreased spending on marketing initiatives in international areas and reduced professional financial consulting, legal and patent fees. Non-cash costs of $179,854 were also lower than the prior quarter of $217,989 primarily due to a decrease of $39,390 in stock-based compensation due to fewer stock options being granted during the nine months ended September 30, 2006 compared to the same period in 2005. The net loss for the three months ended September 30, 2006 was $376,398 compared to $467,104 for the comparative three-month period in 2005. On a year-to-date basis, AccelRate has reduced its loss by $270,861 ($0.01 per share) for the nine months ended September 30, 2006 to $1,267,472 from $1,538,333 for the nine months ended September 30, 2005.

Due to long lead times to obtain inventory from our manufacturer (in excess of twelve weeks) and to avoid two upcoming price increases, AccelRate commenced an inventory management program during the quarter to ensure sufficient stock on-hand (acquired at lower prices) to fulfill future orders. This inventory will enable prompt delivery to satisfy customer orders and facilitate quicker market penetration. The Company expects to draw on this inventory over the upcoming months and once the dealers become fully stocked, AccelRate anticipates that it will carry minimal inventory.

Also during the third quarter, AccelRate received funds pursuant to its announced non-brokered private placement, which is expected to raise total cash proceeds of $263,500. This transaction is subject to the TSX Venture Exchange approval prior to closing. Funds raised are being used to provide AccelRate with working capital needed to operate its business, launch new products and execute its sales and marketing efforts.

"The Company's third quarter activities were primarily focused on positioning the Company for future revenue growth. Initiatives included working with EnerSys on the European launch in October of products incorporating our "High-Speed" charging technology, signing another key distributor (this one in South Africa), introducing the new sequencer product and embarking on an inventory program to ensure product is available to quickly satisfy anticipated future orders. In addition, we obtained working capital financing pursuant to the announced non-brokered private placement. We are also very pleased that we were able to reduce our operating expenses by over 25% on a year-to-date basis" said Reimar Koch, President and Chief Executive Officer of AccelRate Power Systems. "During the upcoming quarters we expect to add distributors, build our order book, expand our product lines and continue to work on our research and marketing programs. We will also expend the required effort to ensure adequate financing is in place to fund the Company until profitability is achieved."

AccelRate's complete financial statements may be reviewed at

About AccelRate:

AccelRate's proprietary charging technology functions effectively with batteries of all conventional chemistries and sizes in industrial, portable, power tool, military and transportation applications. AccelRate's technology provides customers with up to 80% decreased charging time, increased battery lifetime due to improved heat management, and decreased energy use.

Chargers incorporating AccelRate's "High-Speed" battery charging technology are currently available in North America through Hawker Powersource at or through AccelRate Power Systems at Interested European customers may contact EnerSys Europe at

AccelRate Power Systems is headquartered in Vancouver, BC. AccelRate's shares trade on the TSX Venture Exchange (symbol APS), and on the Frankfurt Exchange (symbol KCG).


Reimar Koch, President and CEO

This new release may contain forward-looking statements. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors discussed in the management discussion and analysis section of our interim and most recent annual financial statement or other reports and filings with the TSX Venture Exchange and applicable Canadian securities regulations. We do not undertake any duty to update any forward-looking statements.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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