SOURCE: S3 Investment Company

November 10, 2006 09:52 ET

S3 Investment Company CEO Comments on Settlement and Cancellation of Warrant Agreement and Upcoming Annual Report

TEMECULA, CA -- (MARKET WIRE) -- November 10, 2006 -- S3 Investment Company, Inc. (OTCBB: SEIHE) chief executive officer Jim Bickel today commented on the cancellation of its financing and warrant agreement with La Jolla Cove Investors and how this issue has delayed the filing of S3's 2006 annual report.

"Reaching agreement on a fair settlement of our financing agreement with La Jolla Cove has been the single issue that has held up the filing of our annual report," said Mr. Bickel. "We wanted to clarify the reason for the delay and let shareholders know that because of some very exciting strategic initiatives we are preparing to announce, eliminating the warrants was absolutely essential to the long-term success of S3. We do not take filing late lightly, and we understand how interested our shareholders are in seeing S3's first consolidated financial statements, but with this issue now resolved and behind us, S3 is much better positioned to maximize shareholder value and reach its full potential."

The 10-KSB Annual Report is the first filing to that will include consolidated financial information on S3 including the audited financial statements of its subsidiaries, since the company withdrew its election to be regulated as a business development company, pursuant to the Investment Company Act of 1940. The consolidated statement will factor in the financial performance of S3 subsidiaries SINO UJE, Ltd. and Redwood Capital, Inc., both of which primarily do business in the China market.

"Due to our settlement with La Jolla Cove, we expect to complete the 10-KSB filing by the first of next week and have our stock symbol restored shortly thereafter. Management has never been more confident in the potential of S3, and we look forward to fully disclosing the reasons for our growing optimism to our shareholders in the coming weeks," added Mr. Bickel.

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About S3 Investment Company

S3 Investment Company, Inc. (http://www.s3investments.com) is a holding 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. SINO UJE has been granted exclusive distribution rights in China to medical and industrial products manufactured by leading companies in Europe, North America and Japan. These products are marketed to end-users, including major Chinese hospitals and private companies in a variety of fields, as well as original equipment manufacturers (OEMs), such as Phillips, Siemens and GE, that package the products with their technologies.

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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