Calnetix Announces the Acquisition of Elliott Energy Systems

November 2, 2007

California, USA – November 2, 2007 – Calnetix Inc., a global leader in high efficiency electric motors and generators, today announced the acquisition of Elliott Energy Systems, Inc.(EESI), a microturbine manufacturer, which is located in Stuart, Florida.

Calnetix has significant background and experience in the microturbine business including the manufacture and supply of products to the industry for many years. EESI is best known for its microturbine products used in distributed power generation, combined heat and power (CHP) and offshore power generation applications globally. Last month, Governor Charlie Crist of the State of Florida officially recognized EESI with a distinguished award of excellence for their work as an export manufacturer.

This acquisition brings EESI and the microturbine business under the umbrella of the Calnetix Group of companies which include, Vycon, which specializes in energy storage flywheels; Direct Drive Systems, which specializes in large motors & generators over two megawatt; TurboGenix, which specializes in waste heat recovery to electricity systems and Calnetix, which specializes in high efficiency motors & generator systems.

Brad Garner Chief Operating Officer of Calnetix said: “We are pleased to have the people and products of EESI join the Calnetix Group. We believe the global market for new and efficient power and heat generation technologies is poised for rapid growth. The addition of this microturbine capability to our group is a strategic move that will enable us to provide a more complete, value added power system solution for our global customers.”

The EESI plant in Florida will remain focused on the global microturbine market and continue to be supported by the many people and suppliers that have been instrumental in positioning EESI among the best microturbine manufacturers in the world.

Dave Dewis who has been the President of EESI in Florida will transition to a senior management role in the Calnetix Group with specific focus on new product and business development initiatives. Brad Garner will assume the role as President of EESI while retaining his current position within the Calnetix Group.

About Calnetix

Calnetix, a privately held high tech company based in Cerritos California is an industry leader in energy efficient, high performance motors, generators, magnetic bearings, and integrated drive systems. The company’s products are utilized in distributed power generation, power conditioning, gas processing, semiconductor manufacturing, medical equipment and other industries worldwide.

About Elliott Energy Systems, Inc.

Founded in 1996, Elliott Energy Systems, Inc., a wholly owned subsidiary company of Ebara Corporation of Tokyo, Japan, is a premier manufacturer of microturbines for use in distributed generation, combined heat and power (CHP), and offshore applications. A UL recognized ISO 9001:2000 company. High availability and low maintenance costs make microturbines the right choice for medium to high capacity projects. More information about EESI can be found on their website at www.elliottmicroturbines.com.