XLPI Xcelplus International Inc (CE)

XcelPlus International Inc. (PINK SHEETS:XLPI) (www.xcelplus.com) today announced updates on several operational and corporate developments on which the company has been focused for the past several months. On February 15, 2005 the company announced that it had received a commitment for $12 million in funding. It was expected that the company would issue debt or equity to the private investor providing the funding commitment. To date negotiations for the proposed transaction have not been able to proceed due to reasons beyond the control of the company. In addition, the investor providing the commitment has informed the company that the funding commitment has been reduced to approximately $3 million to $4 million. The company will begin transaction-related negotiations with the investor when the investor informs the company that he is ready and able to proceed. On March 30, 2005 the company announced that it had reached an agreement with SINOAUTO Industrial Company in Shenzhen, China in which SINOAUTO will serve as the exclusive distributor of the XcelPlus product line for autos throughout China. The company has made significant progress since the announcement, and currently the XcelPlus product line is being evaluated by government agencies and authorities in order to be approved for sale. The company believes that the product line will be approved for sale in China in the next few months and that revenues from China-related orders should total approximately $2 million in 2006. On May 20, 2005 the company announced that it received its first purchase order of products for export to Thailand. Product relating to the purchase is now ready for shipment to Thailand and will be shipped once payment terms are satisfied, which is expected shortly. The purchase orders total $50,000.00. In relation to the order, the distributor has completed a 30-minute infomercial on the product's effectiveness and currently the infomercial is in the approval process with government agencies and authorities. The company expects the infomercial to be approved, and then aired once product inventory is established by the company's distributor in Thailand. On May 27, 2005 the company announced that it will launch a new operation, XcelPlus Asia Pacific, as a joint venture in Thailand with the company's current distributor for most of Southeast Asia. The new operation will market and distribute XcelPlus products in China, Thailand, India, Malaysia, Singapore, Indonesia, Australia and the Philippines. XcelPlus will own 49% of the joint venture operation. The company currently has incorporated the new entity and is now finalizing other issues. The company expects to contribute approximately $500,000 to begin initial operations of the joint venture and is in the process of investigating methods to secure funds necessary for initial joint venture operations. Commenting on these and other recent developments, XcelPlus President and Chief Executive Officer Billy R. Smith said: "We have made significant progress in the first half of this year beginning the transformation of XcelPlus International from a development-stage company to a revenue- and earnings-driven operation. Although we have had some setbacks to date this year, I believe we remain in position to generate revenues in 2006 of $5 million to $6 million. This forecast includes the assumption that the company will not receive any funding in the near term for 1) significant expansion of domestic marketing and distribution activities, and 2) initial operations of the planned joint venture in Thailand. We simply will not be able to grow as quickly as I believe we could with full funding for those two initiatives. Nonetheless, I believe we will establish solid revenue and earnings growth in the U.S. and internationally next year. "We will continue to market our unique product line in the U.S. by utilizing effective, low-cost marketing programs to drive consumers to our website where we can capture sales. Our recent news release on fuel-savings associated with use of our Permanent Engine Protection product generated a record sales day for us in early July. Even with minimal funds expended on advertising and promotion, I believe we can generate U.S. sales in 2006 of approximately $1 million. With national advertising, I believe domestic revenues could top $10 million but we are unable to pursue such advertising at this time due to limited funds. "In addition, even if we are unable to fund the joint venture operation in Thailand in the near future, our current distributor agreements in Thailand, China and Indonesia should generate total international revenues of approximately $4 million to $5 million in 2006. Funding the joint venture, however, would allow us to increase profitability as we would have a large ownership position in the Thailand company rather than operate as we do today with a distributor agreement, which limits our profit margin. Gross profit on international revenues are below our margins on domestic revenues, and we would benefit significantly by being in business internationally with an ownership position in this joint venture operation. "As we enter into the second half of this year, I want to thank Arlene Smith for her diligence in her roles as secretary and treasurer of XcelPlus International; Larry Saunders, who recently joined us as chief operating officer; and our other employees Alexandra Kost, James Williams, Christian Sawyers, David Nelson, and Amanda Tucker. We all are dedicated to this company, its customers and its shareholders, and we are doing everything in our power to maximize the value of our shareholders' investments in XcelPlus International. Lastly, we want to thank all of our shareholders for their interest in and support of this company as we leave development stage and enter into the operating phase of our business plan," Smith said. XcelPlus International Inc. is a specialty chemicals and lubricants company focusing on the wholesale/retail distribution and sales of proprietary products that provide permanent protection and improved performance of engines and other major components in cars, trucks, vans, RVs, motorcycles, aircraft, boats, agricultural and lawn equipment, snowmobiles and ATVs, military equipment and other types of gas- or diesel-powered vehicles. XcelPlus International Inc. is a publicly-held company (OTC:XLPI) incorporated in New York with executive offices in Saluda, Va. For more information, visit the company's website at www.xcelplus.com. Forward Looking Statements This news release may contain certain forward-looking statements within the meaning of Section 27A of the Securities and Exchange Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. Investors are cautioned that all forward-looking statements involve risks and uncertainties. Although XcelPlus International Inc. believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any assumption could be inaccurate, and therefore, there can be no assurance that the forward-looking statements included in this press release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion should not be regarded as a representation by XcelPlus International Inc or any other person that the objective and plans of XcelPlus International Inc will be achieved.