SOURCE: Xtreme Motorsports of California, Inc.

December 15, 2006 16:42 ET

Xtreme Motorsports Initiates Steps to Develop Breakthrough Transmission System; New Transmissions to Increase Quality and Reduce Costs, Manufacturing Time

BAKERSFIELD, CA -- (MARKET WIRE) -- December 15, 2006 -- Xtreme Motorsports of California, Inc. (PINKSHEETS: XTMS) ("Xtreme"), a manufacturer of extreme long travel sandrails, desert and dual sport racecars, has entered into discussions with several firms to produce an advanced line of sandcar transmission systems. The new systems are intended to benefit Xtreme by reducing delivery times, providing a 60% reduction in procurement costs and allowing the company to become a reseller of transmissions to other sandcar manufacturers and customers in need of replacement units. The company expects to formalize the relationships with contractors in the first quarter of 2007.

In the past, manufacturing transmission systems for sandcars and dual sport racecars has been a lengthy process, requiring off-the-shelf parts to be re-manufactured into a single system onsite, depending on frame and engine selection by the customer. Now, Xtreme will stock several lines of transmissions with plug-and-play components and mounting solutions to fit any combination of frame and engine.

"The development of proprietary transmission systems is one of several key strategic initiatives we are implementing to ensure rapid growth in 2007," commented Alan McCaa, CEO of Xtreme Motorsports. "The current time from order to delivery of a transmission averages 6-8 months and represents the number one determinant of delivery time to the customer. Now, we will be able to meet customer demand on a timely basis while improving quality, and our top and bottom lines."

To ensure the efficient internalization of transmission system manufacturing, Xtreme has entered into discussions with an engineering project management firm to oversee processes such as engineering, manufacturing, importing, shipment and marketing of the systems.

In addition, the company has tapped a computer-aided design expert to work with the Xtreme Team and the engineering firm to design the transmissions to the company's specifications based on years of management and staff experience.

Finally, Xtreme has entered into discussions with a Chinese company, with current transmission customers such as Nissan, Mitsubishi and Toyota, to build the units.

The Company intends to update shareholders on the progress of formalized relationships with the aforementioned contractors after the first of the year.

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

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.

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