NEWSCENTER

PRESS RELEASE:

POWER TECH CORPORATION INC.

POWERTECH DISCLOSES Q3 2006 FINANCIAL RESULTS

The Company records significant increase in revenues and builds promising strategic alliances

Blainville (Quebec), August 25, 2006 – PowerTech Corporation Inc. “PowerTech” (TSX-V: PWB) today disclosed its financial results for the third quarter ended June 30, 2006.

During this period, the Company recorded operating revenues of $231,477, mainly arising from the sales of PicBucket units and accessories. These revenues alone represent an increase of 65% compared to the Company’s total sales prior to the third quarter 2006. PowerTech did not record any revenues last year for the same quarter. For the nine first months of 2006, the Company’s revenues totalled $370,937, whereas there were no revenues during the first three quarters last year (which exceptionally covered a 10-month period). Furthermore, the Company recorded a gross profit of $71,300 for the last quarter, which represents a gross sales margin of 30.8%. In the future, economies of scale achieved by the sales volume and the termination of promotional sales pricing offered to the first PicBucket buyers should allow the Company to increase its profit margin substantially.

PowerTech’s net loss was $496,819 or $0.02 per share on a diluted basis for the last quarter, compared to a net loss of $511,356 or $0.02 per share for the same period last year. For the first three quarters of the current fiscal year, the Company’s net loss was $1.5 million or $0.06 per share, compared to $1.4 million or $0.06 per share for the same nine-month period of last year.

The Company’s sales and administration expenses were $440,607 for the third quarter of fiscal 2006, compared to $487,265 for the same period last year. Sales and marketing expenses amounted to $165,776 for the third quarter of 2006, whereas they reached $163,908 for the quarter ended June 30, 2005. Whereas last year these funds were mainly used for marketing and promotional material design, this year these funds were primarily allocated to business development. These business development activities were carried out by our four regional territory managers; three of whom are based in Canada and one in the United States.

Furthermore, in terms of short-term assets, cash totalled $582,422 as at June 30, 2006, compared to $1,376,376 as at September 30, 2005. The decrease in cash is the result of investments made by the Company in business development. Furthermore, PowerTech’s total assets were $2.6 million as at June 30, 2006, compared to $2.5 million as at September 30, 2005. With respect to liabilities, as at June 30, 2006, accounts payable and accrued liabilities were $277,894 $, whereas the long-term debt was $43,281. In addition, on June 22, 2006 the Company issued a promissory note of $400,000 which is due on November 30, 2006.

First-rate allies

“The growth in our revenues during the third quarter is the result of a solid initial breakthrough into our target markets. The conclusion in recent months of partnership agreements with first-rate heavy equipment distributors in Canada and the United States will certainly help us continue our momentum,” said Mr. Carol Murray, President and Chief Executive Officer of PowerTech. This past June, PowerTech announced the conclusion of a distribution agreement with the company Finning, the largest exclusive Caterpillar dealer in Western Canada, followed by two similar agreements with sister companies Low Country and Central Georgia JCB, two well established distributors in the state of Georgia in the United States.

Furthermore, last June PowerTech completed the first phase of a new financing plan which raised $760,120. The Company expects that the second phase of this financing will soon be completed. This new funding will be allocated to the Company’s commercialization efforts, as well as the development of a new product line that includes the new 1000 Series, a mini-excavator currently undergoing pre-commercialization trials and the 2000 Series DHU, a dual hydraulic cells percussion bucket for excavator used for large-scale projects.  The 1000 Series and 2000 DHU address the needs of major, rapidly growing markets.

“The development of the Canadian market, and the Northeast and Mid-Atlantic regions of the United States, are the current priorities of our business development plan. The recruitment at the end of June of a fourth regional manager for the Northeastern U.S. market will bring us valuable assistance in rolling out this business development strategy.  In the near future, we also have the goal of concluding other promising business alliances with large international heavy equipment manufacturers and their distributors,” said Mr. Murray.

Issuance of Stock Options

In addition, the board of directors of Power Tech Corporation Inc. authorized the issuance of 65,500 stock options to its directors, senior management and employees conforming to the Corporation’s Stock Option Plan approved October 27, 2004.

The members of the board of directors were issued a total of 20,000 stock options and the senior management of the Corporation received the balance of 20,000 stock options.

The exercise price of these options is fixed at $0.60 which is the closing price of the Corporation’s shares on the TSX Venture Exchange on August 24, 2006.  Senior management options were issued as per the following vesting schedule:  20% after the first year, and 10% per quarter for the 8 quarters that follow.  These options expire August 24, 2011.

About PowerTech (www.powertechci.com)
PowerTech is the only company in the world that manufactures and commercializes a percussion bucket for the construction, demolition, aluminum, mining, tunnel digging, forestry and military industries. PowerTech’s percussion bucket, commercialized under the PicBucket and PicHammer brand names, is a technological breakthrough that combines the power of a hydraulic hammer with the stripping force and maneuverability of a conventional bucket.

* The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this press release.

 

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Source:

Power Tech Corporation Inc.
www.powertechci.com

For further information:

Carol Murray
President and Chief Executive Officer
Corporation Power Tech Inc.
Tel.: (450) 963-6400
Fax: (450) 963-4411
E-mail: carol.murray@powertechci.com

Frédéric Tremblay
HKDP
Tel.: (514) 395-0375, ext. 234
ftremblay@hkdp.qc.com

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