SOURCE: S3 Investment Company

September 19, 2006 09:20 ET

S3 Investment Company CEO Discusses Upcoming Annual Report and Progress of Subsidiary Operations

TEMECULA, CA -- (MARKET WIRE) -- September 19, 2006 -- S3 Investment Company, Inc. (OTCBB: SEIH) chief executive officer Jim Bickel today commented on the company's upcoming 10K-SB annual report, which will include consolidated financial information on S3 including the audited financial statements of its subsidiaries. This report will be the first to provide details on the financial performance of S3 subsidiaries SINO UJE, Ltd. and Redwood Capital, Inc., both of which primarily do business in the China market.

"We are pleased to be preparing the annual report, which will demonstrate that the support of S3 has allowed SINO UJE and Redwood Capital to develop into solid companies that are positioned for even further growth in the massive China market," said Mr. Bickel. "SINO UJE, who does business as a distributor of western products into China, continues to add new industry leading supplier companies to its product catalogue and is taking an increasing number of orders through its distribution network. Redwood Capital is expanding to accommodate a larger number of private Chinese companies that it can assist through the process of entry into the U.S. capital markets."

"From a review of the information that has been compiled thus far, it is clear that SINO UJE's growth will be demonstrated in our first consolidated financial statement, especially in the anticipated gross revenue and net profit numbers. We also expect that the value of the stock that Redwood Capital received from its first client will be recorded as a significant asset on its books and that anticipated future transactions will only increase the assets value carried by Redwood," stated Mr. Bickel.

S3 was unable to present consolidated financial information for its subsidiaries on previous financial statements due to its status as a business development company, regulated by the Investment Company Act of 1940, which prohibits investment companies from consolidating the financials of its portfolio investments. With shareholder approval, S3 withdrew its business development company election in April of 2006.

"The ability to show the increasing value of our subsidiaries is a critical element in the growth strategy of S3 Investment Company. It is our intent to build S3 well beyond its current status, and to achieve our long-term goals, we expect to utilize the expanding operations of our subsidiary companies to raise S3's profile both in China and in the U.S. capital markets. This process is currently underway, and we hope to share several significant milestones in the very near future. Until then, we can all look forward to the release of our annual report and the first consolidated financial statements for S3," 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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