Turbodyne Update

25 August 1999

Turbodyne Update

    WOODLAND HILLS, Calif.--August 25, 1999--Turbodyne Technologies Inc. (Easdaq:TRBD) announced today that it has issued to a private equity investor $500,000 aggregate principal amount one year 6% convertible subordinated debentures. The debentures are convertible into common stock of the Company at formula prices based on the price of the Company's stock in the period prior to the closing and the conversion. To date, the investor has converted $100,000 aggregate principal amount of the debentures into 72,727 shares of common stock. The Company also issued warrants to the investor to purchase 50,000 shares of common stock of the Company, exercisable at $1.74 per share, which represented the fair market value of the common stock on the date the warrants were issued.
    The debentures were issued in connection with a proposed financing by this investor of up to $20.0 million (announced on April 15, 1999). To date, the parties have not reached agreement on definitive purchase and sale documentation, other than with respect to the $500,000, and the parties may never reach agreement for additional financing. The Company is pursuing other financings that it believes are less costly to the Company than the terms of the financing disclosed in its press release of April 15, 1999. However, there can be no assurance that the Company will be able to complete any such financings.
    Turbodyne Systems, the Engine and Pollution Technology Division of Turbodyne, designs, develops, manufactures and markets patented pollution-reduction, fuel economy and performance enhancing products for internal combustion engines in the automotive, transportation, construction, marine, agriculture, mining, military and power generation industries.
    Turbodyne's Light Metals Division is a manufacturer of machined aluminum castings and leading supplier to the automotive industry.
    Offices and/or plants are located in Carpinteria, La Mirada, Encinitas and Woodland Hills, California; New York, New York; Ensenada and Mexico City, Mexico; Paris France; London, England; and Frankfurt, Germany.
    Turbodyne's World Wide Web address is: www.turbodyne.com.