PowerSki EPA Certification Status

Business Wire-April 7, 2007- San Clemente, Ca. PowerSki International Corp. has signed a Limited Licensing Agreement with All American; manufacturing company located in Washington State, to assemble and mass produce the PowerSki Jetboard™. All American has a $5,000,000 line of credit available to purchase parts. All American is preparing to purchase a first phase of parts for PowerSki Jetboard™ production. Per PowerSki's Limited License Agreement, they have been negotiating in recent weeks with all of PowerSki's A, B, and C level vendors.

On the manufacturing front, PowerSki has a two-stage plan to lower the PowerSki Jetboard™'s cost of goods through tooling changes and large quantity parts orders. To date PowerSki has shipped to water sports enthusiasts worldwide over 200 of its patented PowerSki Jetboards™.

PowerSki recently informed its domestic dealers that PowerSki's SuperTorqueXT™ engine is currently being tested at Olson Ecologic Labs to acquire EPA certification. PowerSki reported this proprietary good news from its contractor who has fabricated and tested a catalytic converter prototype. Our contractor claims that the PowerSki SuperTorqueXT™ marine engine will meet EPA's emission standards.

(The following statement is from an e-mail received on 11/22/2006 from PowerSki International Corp.'s contractor):

"After pitting in pause air and catalytic converter, the SuperTorque XT™ engine runs very clean. We did several emission tests, and the level of HC and CO is below the standard by a large margin. Next week we will take the engine to Olson Ecologic to perform certification tests. From the testing results we achieved here at our own lab, we believe it will pass all certification tests. "

PowerSki's patented SuperTorqueXT™ engine has been at Olson Ecologic lab for several months waiting in line to be tested. PowerSki International received the green light from Olson Ecologic Lab to begin the certification process. PowerSki anticipates receiving positive results soon from the Olson Ecologic Lab for EPA certification of the SuperTorqueXT™ engine.

(The following quote is from an email sent to Bjorn Elvin, VP of Engine Division PowerSki International Corp. from Paula Sister from the Olson Ecologic Lab on 3/12/2007):

"Hello Bjorn,

I am writing to acknowledge, and confirm, that we have had your engine since December 2006 and, as I told your consultant, we were not able to test it until March 2007. There were three other engines scheduled for testing ahead of your engine, all performing full EPA certification programs with up to 500 hours of durability. I know you are concerned, and have visited our lab several times for updates on the engine to try to get the schedule expedited, but as I have told you in the past, we test the engines as quickly as possible, but March was the soonest we could test anything. Unfortunately, there has been a high demand for this type of testing in recent months and the lead-time has been lengthy. We are now ready (as of last week) to begin installation and testing of your engine, however we are waiting on the test plan (protocol) from Mr. Zheng. We cannot test this engine without the test protocol being provided to us in writing.

Please feel free to contact me if you will have any questions. We appreciate your business.

Best regards,

Paula Sister
Olson-Ecologic Engine Testing Laboratories"

After receiving EPA certification, the next step is to make sure that the exhaust system with the catalytic converter fits properly inside the Jetboard, to fabricate tooling for exhaust system with the catalytic converter, and test it for end-consumers' use, and then to also get the production components EPA certified. It might take approximately 3 to 5 months, or more, to develop the production tooling and parts, such as the catalytic converter, exhaust manifold, and expansion chamber and this may cause delays in purchasing the production parts and final set-up of PowerSki's production line for assembly.

After implementing the catalytic converter and having the SuperTorque XT™ engine EPA Certified, PowerSki plans to complete the 2nd, and 3rd design stage with Orbital Fuel Injection. PowerSki teamed with Orbital Corporation from Australia to design a digitally-controlled, air-assisted, direct fuel injection system that includes such technological improvements as an electronic throttle, separate oil injection, and crankshaft-driven air compressor. Similar air-assisted, 2-stroke direct fuel injection technology is being successfully used and sold around the world by many other marine engine manufacturers, like Evinrude (E-Tec) and Mercury Marine.

More information and updates can be found on www.powerski.com

PowerSki International Corp., is Proudly Sponsored by: Hewlett-Packard, PTC, and Adobe