Turbo Power Systems Amended Loan Agreement

28 November 2013

Turbo Power Systems Inc.("TPS" or the "Company")

Amended Loan Agreement

Further to the expectation set out in its third quarter report of 4 November 2013, TPS, the innovative electrical machines and electronic systems provider, announces an extension to its existing loan agreement with TAO Sustainable Power Solutions (UK) Limited ("Tao") (the "Existing Debt").

Extension Loan

TPS' wholly owned UK subsidiary, Turbo Power Systems Limited ("TPSL"), has today entered into an agreement to extend the Existing Debt provided by Tao to TPS by a total of £0.90 million (the "Extension Loan"), bringing the total value of the TPSL's borrowings from Tao to £9.49 million. The Extension Loan will be drawn down in tranches during November and December 2013. Neither TPS nor TPSL have any borrowings other than those from Tao.

Notwithstanding improved market conditions and the Company's trading prospects, TPS continues at present to require working capital support from Tao. The Company carefully monitors its future working capital requirements and is mindful that further extension or extensions may be sought in the current or following financial years.

The Extension Loan represents an amendment to the agreement in respect of the Existing Debt and accordingly, the terms of the Extension Loan mirror those of the Existing Debt notably that it will be repayable on 1 April 2014, carries an annual interest rate of 6.0%, payable quarterly in arrears and be secured on the assets of TPSL.

The Company remains in discussions with Tao regarding alternatives available to the Company when its borrowings from Tao become repayable, and continue to consider a range of further options to address the Company's financing requirements.

Related Party Transaction

Tao holds 89.4% of the issued share capital of the Company, and is therefore a related party for the purposes of the AIM Rules for Companies ("AIM Rules"). Accordingly, the entry into the agreement with Tao as set out above constitutes a related party transaction for the purpose of the AIM Rules.

The Company's independent directors consider, having consulted with finnCap Ltd, the Company's nominated adviser, that the terms of the transaction set out above are fair and reasonable insofar as the Company's shareholders are concerned.

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