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Empower Technologies™ First Quarter Report Ended March 31, 2007

Richmond , British Columbia – May 29, 2007 – Empower Technologies Corporation (“The Company” or “Empower”) has filed financial statements for the first quarter ended March 31, 2007.

Empower is a Linux operating software developer for Linux-based embedded system technologies and solutions for the embedded computing industry. The Company was incorporated under the Company Act ( British Columbia ) on February 21, 2003. The Company operates through its wholly-owned Washington State subsidiary, Empower Technologies, Inc. (“Empower US”), and indirectly; Empower Technologies ( Canada ) Inc. (“Empower Canada ”) and Empower Technologies ( Shanghai ) Inc. (“Empower Shanghai”). The Company trades on the TSX Venture Exchange under the symbol EPT.

Highlights of the first quarter ended March 31, 2007:

  • On January 15, the Company announced a new Digital Media Tablet (DMT) reference design platform using Empower's LEOs Digital Media Edition software development suite and Texas Instruments Incorporated's (TI) latest DaVinci processor DM6441 for portable video and audio applications.
  • On February 22, the Company completed a fully subscribed brokered private placement of units (the “Units”) with Union Securities Ltd in Toronto (“the Agent”) originally announced on January 29, 2007. This Brokered Private Placement of up to 1,700,000 Units (the “Offering”) is priced at $0.90 per Unit for total proceed $1,530,000. Each Unit consists of one common share and one-half a common share purchase warrant. Each whole warrant has an exercise price of $1.25 with a 12 month expiry date from the date of closing.
  • On March 27, the Company announced that Mr. Lee Faulk has joined Empower's team as Director of Sales and Marketing for embedded system technologies at the Company's U.S. subsidiary in Redmond , Washington . Mr. Faulk will be taking over the sales and marketing of Empower's core embedded technology LEOs (Linux-based Embedded Operating software) from the outgoing VP of Sales and Marketing, Mr. Alex Romanov .

Significant projects

LEOs III (LinuxDA Embedded O/S III)
Empower US has commenced work on the next version of LEOs for Texas Instruments' (TI) latest DA VINCI dual-core microprocessor – DM6441.

LDK6441 Development Kit
Empower US has commenced work on LEOs III for TI DM6441 Development Kit (LDK6441). This will be a brand new kit made specifically for TI's new DA VINCI family of dual-core microprocessor.

Osaka Technology
With CD, DVD, MP3, user programming and PC connectivity capabilities, the Osaka Technology (formerly “Osaka Project”) is a compact, all-digital intelligent audio/video reference design platform. Supporting a wide range of audio and video functions, it integrates all the elements of personal computer and home audio/video, in addition to a PDA with QVGA display. Powered by LEOs for the TI OMAP591x dual core processor. The Company targeted the audio video developers, designers and manufacturers to use the “Osaka Technology” to fast track their AV product development.

PowerPlay iH
This mobile data terminal model is near the end of development. It was previously named “PowerPlay 1x”. The letters “iH” stands for “industrial Handheld”. The Company is working on the industrial design of the housing of the unit. Besides the regular PDA functions, this new model will have wireless communication capability. The “PowerPlay iH” is targeted toward the industrial control market.

Results of Operations

    Revenues
    Presently the Company's activities has shifted from primarily the development of the Company's LEOs operating software for Texas Instruments embedded processors, the engineering of reference designs using LEOs, LDK5910 and LDK5912 Development Kit, and filing patents for embedded systems and technologies, to commercialize the sales and marketing of LEOs, LDKxxxx development platform and the reference designs using LEOs. Revenues generated for the three months ended March 31, 2007 were $16,936 compared with $14,009 for the three months ended March 31, 2006. This increase is attributed to the successful execution of the Company's decision to change the sales focus from distributed products and end of life products to sales and market the Company's core enabling embedded technology LEOs (LunuxDA Embedded O/S) and LDK591x.

    The Company anticipates revenue to continue to improve through its new sales and marketing strategies Empower has devised during the course of transition:

    • Create an efficient sales network that will consist of manufacturer's representatives and major electronics and technologies distributors to market and to sell LEOs and LDKxxxx platform development kits among developers, manufacturers, value-added resellers, and system integrators.
    • Widen the focus of the Company's sales and marketing efforts from the consumer electronics market to the broader embedded-system market, which includes the automotive, RFID, industrial control, and medical devices sectors.
    • Accelerate the process of turning Empower customer Design Wins into engineered products and purchase LEC (LEOs Enabling Chip) when they are ready to go into production.

    General and Administrative
    General and administrative expenses without stock-based compensation and R&D costs for the three months ended March 31, 2007 decreased to $500,298 (2006 - $581,777) due to reduction in the number of administration staff. Advertising and promotion decreased to $61,778 (2006 - $116,647). Rent decreased to $12,462 (2006 - $13,444) due to closing down our shanghai office. Consulting fees increased to $153,000 (2006 - $63,702) due to the Company's effort to search for new executives and new business opportunities.

    Research and Development
    Research and Development costs (“R&D costs”) relating to the development of LEOs, the LDK591x and LDK6441 Development Kit, and new reference designs using LEOs are expensed as incurred. R&D costs for the period ended March 31, 2007 were $290,546 compared to $367,698 for the period ended March 31, 2006.

    The R&D cost leveled off is due to the Company successfully developed its core technology, LEOs operating software and LDK591x. From here on, it is regular maintenance, improvement and upgrade to the core technology LEOs and adding new embedded CPU platforms such as TI's DM6441.

    Capital Resources
    The authorized capital of the Company consists of unlimited common shares without par value. As at March 31, 2007, there are 36,545,654 common shares issued and outstanding.

    The company has 1,593,185 warrants from a Prospectus Offering (“Offering”) outstanding. Each Offering warrant entitles the holder to purchase a common share of the Company at a price of $2.50 at any time on or before June 20, 2007. In February, 2007, the TSX Venture Exchange has approved the repricing of its 1,593,185 share purchase warrants (the”Warrants”) from an exercise price of $2.50 each to the reduced exercise price of $1.25 per share. Expiring date remains at June 20, 2007. TSX Venture Exchange requires that the repriced Warrants, the exercise period must be amended to be shortened to a period of 30 days if, for 10 consecutive trading days, the closing price of the Company's shares exceeds $1.50 per share.

    The company also has 895,000 warrants from a brokered private placement outstanding. Each warrant entitles the holder to purchase one share of the Company at a price of $1.25 at any time on or before February 20, 2008.

    These warrants represent a source of new equity capital for the company in the event that market conditions lead to their being exercised.

About Empower Technologies™

Founded in 2000, Empower Technologies (TSX.V: EPT) is an innovative company that brings the power and flexibility of the LEOs® (LinuxDA™ Embedded Operating System) to the dynamic Consumer Electronics Industry and the emerging Intelligent Appliance Market, through their development of Linux-based operating software, embedded system technologies and solutions.

The products and services that form the base of its business activities include an embedded system development platform for LEOs®, based on Texas Instruments™ embedded CPU platform, that fulfill the needs, demands of developers and the Consumer Electronics Industry. Empower is continuing to develop LEOs® and newer versions of embedded CPUs in line with Texas Instruments™.

By uniting top professionals from within the computer industry and developing quality partnerships and strategic alliances, Empower is committed to being the leading developer of Linux-based operating software and embedded system technologies and solutions for consumer electronics manufacturers and developers.

Empower's brands are “LEOs®”, “LinuxDA™”, Linux-based embedded operating systems and “PowerPlay™”, smart consumer electronics.

Contact Information:

Media Enquiries:
Paul Leung – Chairman, President and CEO: pcleung@empowertechnologies.com or via Tel @ (604) 278-3100
Investor Relations: investorline@empowertechnologies.com
More Information on Empower Technologies: www.empowertechnologies.com
Sales Enquiries: sales@empowertechnologies.com or via Tel @ (604) 278-3100

Paul Leung
Chairman, President and CEO

Empower Technologies Corporation
# 405-5600 Parkwood Way
Crestwood Commerce Centre
Richmond , BC , Canada V6V 2M2

The statements contained in this news release that are not historical facts are forward looking statements.  Such statements are based on management's estimates, assumptions and projections using available information.  The company cautions that actual financial results could differ materially from the current expectations due to a number of factors.

The TSX Venture Exchange has in no way passed upon the merits of the proposed transactions and has neither approved nor disapproved the contents of this press release.

Empower Technologies, LEOs , PowerPlay and LinuxDA are the trademarks of Empower Technologies, Inc. All other brands are trademarks of their respective owners.


© 2007 Empower Technologies