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AutoCorp Equities Announces Recapitalization and New Business Model

10 October 2000

AutoCorp Equities, Inc. Announces Recapitalization and New Business Model

    PLANO, Texas, Oct. 6 AutoCorp Equities, Inc.
(OTC Bulletin Board: ACOR) announced today that it has reached an agreement in
principle with AutoPrime, Inc., its principal creditor, and AutoPrime's U.S.
parent company, to recapitalize AutoCorp, effective October 1.
    The recapitalization will enable AutoCorp to implement the new business
model it has recently developed.  After the recapitalization, AutoCorp will
have minimal debt and expects to have significant assets on an unaudited
basis.
    As part of the new business model, AutoCorp plans to acquire interests in
new and used car dealerships.  AutoCorp believes without assurance it can also
raise new capital from investors, obtain a line of credit from a lender and
acquire additional assets, in the implementation of the new business model.
    In the recapitalization, AutoPrime or its U.S. parent company, Pacific USA
Holdings Corp., will exchange debt owed by AutoCorp for shares of a new
AutoCorp convertible preferred stock to be held by either AutoPrime or Pacific
USA.  The preferred stock will be convertible into 25% of AutoCorp's common
stock at a future date.
    Completion of the recapitalization is subject to a due diligence review by
Pacific USA/AutoPrime, as well as preparation of definitive documents that are
subject to the review, approval and authorization of each of the parties'
boards of directors.
    AutoCorp's fiscal year ended September 30, and the parties have made the
transaction effective October 1.  The closing is expected to take place when
all formalities have been completed.
    The recapitalization includes the return to AutoCorp of the preferred and
common stock tendered to AutoPrime and other parties on December 30, 1998.
The tender has never been accepted.  In addition, the three trusts established
on that same date will also be terminated, and the remaining common shares
held by Charles Norman, as trustee of those trusts will be returned to
AutoCorp.
    Charles Norman will continue as President and Chief Executive Officer of
AutoCorp.  In addition, Mr. Norman, William O. Merritt and David Brown, will
continue as the Directors until the next annual meeting of shareholders.
    As previously reported in its last two Forms 10-QSB, AutoCorp's operations
have recently declined to such a low level that the expenses of its operation
have exceeded its revenues for a number of months.  AutoPrime has been
advancing funds to cover the shortfall.  The advances have accumulated to a
level where AutoCorp has no prospects for repaying them from that level of
operations.
    Pacific USA/AutoPrime elected to participate in the recapitalization
because Mr. Norman had developed a new business model, with the assistance of
Mr. Merritt, and also because Mr. Norman will continue as the President and
Chief Executive Officer, and a Director, of AutoCorp in implementing the new
business model.  If the recapitalization plan is finalized, the advances will
no longer be necessary.