S3 Investment Company CEO Updates Shareholders on Status of Portfolio Investments and Proxy Statement; October 2005 Newsletter is Added to Website

Business Wire, Oct 26, 2005

TEMECULA, Calif. -- S3 Investment Company, Inc. (OTCBB:SEIH) chairman and chief executive officer Chris Bickel today provided an update on the status of the company's 14A Proxy Statement and its operating portfolio investments, SINO UJE, Ltd. and Redwood Capital, Inc.

Mr. Bickel first addressed the status of the Preliminary Proxy Statement filed by the company, which includes a proposal under which S3 would withdraw its election to be treated as a business development company.

"We have not yet received final approval on our 14A Preliminary Proxy Statement, but we ask shareholders to look for a future announcement of the filing of a Definite Proxy Statement, which will also be mailed to stockholders of record and will include a date, time and location for a Special Meeting of Shareholders. It is extremely important that as many shareholders as possible take part in this process, so that the company's future direction can be decided," said Mr. Bickel.

"The Redwood Capital business is growing steadily and we expect our first client to have their transaction closed within a month. Additionally, we have two additional clients that are in process with several more in our pipeline.

"SINO UJE revenues have been solid over the last several months, and we intend to release some specific financial information on SINO's revenues during this period. An important focus of the last several months has also been to increase the purchasing power of SINO UJE, so that the company can increase the flow of suppliers' products into China without an additional financial burden on SINO UJE. This effort has been quite successful and we expect that SINO UJE will have access to banking instruments that will give it greater flexibility in purchasing products for re-sale into China.

"Even as these two investments grow, we will continue to focus on strategies to further increase the value of our portfolio companies, and management will explore all options that will allow S3 shareholders to benefit more directly from the growth of SINO UJE and Redwood Capital," stated Mr. Bickel.

S3 Investments has posted the October issue of its re-designed monthly newsletter on the company's website at www.s3investments.com/newsletter.asp. A text-only version will be sent out electronically to those subscribed to the company's email alert system.

Mr. Bickel, who addresses a number of issues related to the company in the October newsletter, added, "We are pleased to have improved both the design and the scope of our monthly newsletter and invite our shareholders to submit questions by email to investors@s3investments.com so that we can address issues that may be of interest to a large number of shareholders in upcoming newsletters."

To sign up to receive information by email directly from S3 Investment Company when new press releases, investor newsletters, SEC filings or other information is disclosed, please visit http://www.s3investments.com/ealert.asp.> About The Company

S3 Investment Company, Inc. (http://www.s3investments.com) is a Business Development Company regulated by the Investment Company Act of 1940. Its first operating subsidiary, Securesoft Systems Inc. (http://www.securesoftsystems.com), was acquired in April 2003. S3 Investments has subsequently acquired 100% of Redwood Capital (http://www.redwoodcapinc.com) to participate in the fast-growing investment banking market in China and 51% of SINO UJE (http://www.sinouje.com), a non-stocking distributor of medical and industrial high-tech products to markets throughout China. S3 is currently focused on increasing the value of its investment portfolio and returning value to its shareholders.

Any statements contained herein related to future events are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on forward-looking statements. S3 Investment Company, Inc. undertakes no obligation to update any such statements to reflect actual events.