SOURCE: Xtreme Motorsports of California, Inc.

April 30, 2007 09:00 ET

President and CEO of Xtreme Motorsports Provides Important Shareholder Update Regarding Current Business Initiatives

BAKERSFIELD, CA -- (MARKET WIRE) -- April 30, 2007 -- Today Alan McCaa, President and CEO of Xtreme Motorsports of California, Inc. (PINKSHEETS: XTMS) ("Xtreme" or the "Company"), provided an update to shareholders regarding its current initiatives:

"It has been several weeks since Xtreme has been in a position to issue a press release regarding its current business, operational and capital markets initiatives. Unfortunately, the majority of these initiatives were in a state of flux and required additional development before we could update shareholders.

CUSIP Change:

--  This process has taken longer than expected. With the CUSIP change,
    NASDAQ required a corresponding ticker symbol change.
--  We had been working through the change process with the hope that
    would not need to change the ticker symbol.
--  We expect to provide details regarding the CUSIP and ticker symbol
    change as soon as we hear from NASDAQ.
--  As shareholders are aware from our March 22 press release, the CUSIP
    change is part of an extensive program to address the illegal naked short
    selling of Xtreme's stock. Additional details regarding the company's NSS
    strategy will be clarified in a press release to follow shortly.
    
Share Reduction Program:
--  While the time frame to complete the share reduction has been
    extended, it has certainly not been on the back-burner. We continue to
    request return of shares from those who have agreed, but have been made
    aware that significant numbers of shares have been "lent out" to market
    makers.
--  We regret this program has taken longer than anticipated, but the
    administrative procedures required to accomplish the return of shares are
    out of our control. As soon as we confirm receipt of the shares to be
    cancelled and retired, we will inform shareholders immediately.
--  In the meantime, we have entered into certain arrangements with
    service providers and have agreed to issue shares of stock in lieu of cash.
    The goal remains to reduce the total issued and outstanding by 47% as we
    had previously announced, but the company may not ultimately reach this
    goal to the extent that we utilize Xtreme's common stock to fund strategic
    growth plans to include, among other programs, the acquisition of
    complementary businesses.
--  The issuance of stock to any business that we might acquire would
    provide immediate revenues, profit and assets to Xtreme, and we believe
    this to be a wise use of our common stock.
--  To increase transparency, the company will release a certified share
    structure list from its transfer agent at the end of each month in the form
    of a press release with clarification of any increase or decrease from the
    prior month's report. This will allow the company to ensure the accuracy of
    all information released to the public.
    

Current Operations:

--  Shareholders may be surprised to learn that Xtreme currently has open
    quotations amounting to approximately $150 million. We are in the process
    of designing, engineering and otherwise negotiating these contracts. We
    need to make it clear that these quotations do not necessarily represent
    revenue for this year or next. It represents potential business
    opportunities that may or may not be secured over the next few years. The
    company has not informed shareholders via press releases of these
    opportunities as they arise because we believe in providing realistic
    information and not "hype." Currently, Xtreme has booked contracted sales
    for the first quarter of 2007 amounting to approximately $2.5 million. This
    does not include approximately $1.0 million in quotations that management
    believes will convert to sales in the coming months, but are undergoing
    design and engineering that may increase the aggregate sales for the year.
    
Branding
--  We have undertaken a program to fully protect the intellectual
    property of Xtreme to include new branding, trade marking, and marketing
    programs. The branding program includes a full Xtreme clothing line which
    will be available for sale in the summer or fall of 2007.
--  Furthermore, the company has filed applications for two patents
    related to the utility-vehicle market. At this point, the company is not
    releasing details of these patents, for obvious reasons.
    
Dealers and Global Expansion
--  The company currently has signed 4 dealerships under its dealer
    program and 3 additional dealers are under letters of intent ("LOI"). The
    dealers under LOI are currently examining their operations to ensure they
    will be able to accommodate the terms of the dealer agreement, such as
    floor space, maintenance and signage requirements.
--  The dealer program has been more successful than we had anticipated,
    and therefore has required more thoughtful attention and time by Xtreme's
    management and staff. Instead of anticipated revenues of $1 to $2 million
    per dealer per year, dealers are looking to purchase up to $25 million or
    more in sandcars per year.
--  Our international expansion efforts are ahead of schedule by 8-10
    months.
--  This has placed significant additional requirements upon management
    and staff to plan and manage.
    
Clearly, the growth we are experiencing has resulted in the need to redesign purchasing, logistics, staffing, partnerships and a host of internal processes we did not expect to address this year or even next. Even though we only completed a refit and redesign of our facilities in January, we currently need to move our operations to a space at least three times the size of our current manufacturing footprint in order to meet current and future demand for the foreseeable future. We are looking to the future and need to be careful in our planning to ensure operational excellence.

I would like to ensure shareholders that all of our efforts over the last month have all been under the mindset of increasing shareholder value. We are as distressed and confused over the fact that our current stock price and market capitalization does not reflect the fair value of the company under any common measures of stock price appreciation potential such as "multiples of revenue" or other such metrics. In addition to the CUSIP and ticker symbol change, we have taken additional legal measures with regard to naked short selling to protect our company and our shareholders. Once these legal measures have been put in motion, we will provide explicit details in a press release to ensure that our shareholders are fully informed."

- Alan McCaa, President and CEO

About Xtreme Motorsports of California, Inc.

Xtreme Motorsports is a manufacturer of custom and production-line sandrails, desert and dual sport racecars. Founded in 1983, Xtreme'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.

Contact Information

  • Contact:
    Fairview Investor Relations, LLC
    661.310.7880
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