SOURCE: S3 Investment Company

May 11, 2006 09:30 ET

S3 Investment Company Announces CEO Meetings for Expansion of SINO UJE Supplier Network

TEMECULA, CA -- (MARKET WIRE) -- May 11, 2006 -- S3 Investment Company, Inc. (OTC BB: SEIH) today announced that chief executive officer Jim Bickel has initiated an expansion effort that is intended to extend the network of suppliers for subsidiary SINO UJE, Ltd., a distributor of high-tech medical and industrial equipment in the China market. As part of the expansion program, Mr. Bickel has traveled to Germany to negotiate agreements with several major equipment manufacturers and to meet with existing suppliers to discuss the growth of their product lines in China.

"There are a number of targeted supplier companies in Germany that would provide products with tremendous potential in the China market," commented Mr. Bickel. "We expect to complete negotiations and sign distributor agreements with a number of these new suppliers in the near term. Beyond those negotiations, we will use our time in Germany to meet with several key existing suppliers, whose products represent significant revenues for SINO UJE.

"A major reason that S3 management is proposing the capital structure change contained in the recently filed 14A proxy is to provide additional financial stability and flexibility for its subsidiaries. For SINO UJE to expand its supplier network and fulfill an increasing number of orders, a larger capital pool is required. While most of this financing will be pursued through lines of credit, bank financing and other similar methods, S3 will require more flexibility in its capital structure for the company to reach its full potential," Mr. Bickel added.

Among the existing suppliers with whom Mr. Bickel and SINO UJE representatives will meet is Inter Medical GmbH (www.intermed.de), a medical software and hardware company based in Lübbecke, Germany. SINO UJE is currently the exclusive distributor of Inter Medical's products and services in China, including Inter Medical's unique upgrade packages for existing gamma cameras. The companies will discuss the formation of a joint venture company in China known as a Wholly Owned Foreign Enterprise (WOFE), which will immediately sell and service Inter Medical's imaging products for the medical industry. The new enterprise will explore the potential of expanding future operations to assembly and manufacturing.

"China is considered the second largest medical imaging market in the world, and Inter Medical's unique upgrade packages for existing gamma cameras differentiates this company's products in the marketplace making the formation of this joint venture even more attractive," stated Mr. Bickel.

In addition to Inter Medical, Mr. Bickel will meet with senior management of Fagus-GreCon Greten GmbH & Co. (GreCon), with which SINO UJE already has an operating WOFE in China. GreCon, a world market leader of spark detection and extinguishing systems and process measurement systems, is headquartered in Alfeld, Germany.

Other stops on Mr. Bickel's trip include the offices of current suppliers Weima GmbH, a worldwide leader in shredding technology and briquetting solutions, in Ilsfeld, Germany and Ulrich GmbH & Co., a world leader in the design and manufacture of injector systems used for medical imaging applications, such as CT and MRI equipment. Sales of Ulrich products are expected to account for over 50% of all SINO UJE sales this year.

"Clearly, Germany is a focal point for SINO UJE, not only due to the presence of existing suppliers here, but also as a fertile ground for SINO UJE to expand the supplier network to include new companies with products that we expect will very well in the China market and increase SINO UJE's future revenues," said Mr. Bickel.

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About The Company

S3 Investment Company, Inc. (http://www.s3investments.com) is an operating company with two subsidiaries doing business in the China market. S3 holds a 100% equity interest in Redwood Capital (http://www.redwoodcapinc.com), which assists private Chinese companies in accessing U.S. capital markets by utilizing a network of investment banking relationships, and a 51% equity interest in SINO UJE (http://www.sinouje.com), a non-stocking distributor of medical and industrial high-tech products to markets throughout China.

Any statements contained herein related to future events are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on forward-looking statements. S3 Investment Company, Inc. undertakes no obligation to update any such statements to reflect actual events.

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