SOURCE: Xtreme Motorsports of California, Inc.

March 12, 2007 07:45 ET

Xtreme Motorsports Secures Cancellation of Approximately 47% of Issued and Outstanding Common Stock

BAKERSFIELD, CA -- (MARKET WIRE) -- March 12, 2007 -- Xtreme Motorsports of California, Inc. (PINKSHEETS: XTMS) ("Xtreme" or the "Company"), in response to shareholder concerns related to dilution, has secured the cancellation of approximately 394 million of the 839 million shares of common stock issued and outstanding. The majority of the cancellations were effectuated on March 9, 2007. Currently, the number of issued and outstanding shares of common stock of the company amounts to approximately 445 million, and is structured as follows:

   --  Total: 445 million
       --  Free-trading, Certificated: 330 million
       --  Free-trading, Electronic (the "Float"): 115 million
The Company will be working over the next several weeks to secure cancellation of additional shares as part of its efforts to improve the quoted price per share of Xtreme's common stock.

"While we have identified at least four market makers perpetrating significant shorting of our stock, our efforts to cause these groups to cover and improve our quoted price per shares through the issuance of dividends have not had the desired effect," stated Alan McCaa, President and CEO of Xtreme. "By way of this immediate cancellation of a substantial number of our outstanding shares, we are bringing an immediate benefit to shareholders who have purchased stock in the open market -- each now owns 47% more of the company.

"As part of this cancellation initiative, I have canceled all of my restricted common stock, amounting to approximately 254 million shares, and now only hold preferred stock in our company. I hope this is indicative of my concern for shareholders, my belief in the operational success of Xtreme and in our future prospects for significant revenues and profitability.

"We will continue update shareholders regarding the status of this recapitalization effort, as well as any developments in our naked short selling forensic investigation," McCaa continued. "We also wish to assure shareholders that the company has no plans to further dilute shareholders, other than the distribution of dividends which will take place as previously announced, or increase our authorized capital."

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.

Contact Information

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