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Megawheels Reports 2004 Third Quarter Operating Results.

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M2 PRESSWIRE-29 July 2004-MegaWheels Technologies Inc.: Megawheels Reports 2004 Third Quarter Operating Results(C)1994-2004 M2 COMMUNICATIONS LTD

RDATE:07282004

Calgary, Alberta CANADA, /FSC/ - MegaWheels Technologies Inc. (MWT - TSX Venture), today announced financial results for the quarter ended May 31, 2004.

3 months 3 months 9 months 9 months Mar/04 to Mar/03 to Sep/03 to Sep/02 to May/04 May/03 May/04 May/03

Net Income (Loss) ($102,245) ($357,463) 71% ($544,102) ($1,266,325) 57% Net Loss per Share

Basic and Diluted ($0.004) ($0.017) 76% ($0.022) ($0.061) 64% EBITDA ($50,433) ($209,901) 76% ($374,848) ($874,387) 57% Cash Used in

Operations ($122,056) ($528,295) 77% ($409,418) ($1,549,082) 74%

* During the third fiscal quarter of 2004, there was a 57% improvement in the sequential quarterly EBITDA loss to ($50,433) from ($116,101) in Q2 2004.

Operational EBITDA, defined as EBITDA less R&D, improved to $47,394 from $936, thus maintaining a breakeven threshold for sustainable profitability of the underlying business of Megawheels, as net of discretionary R&D investment. Q3 2004 operating results also evidenced a 2% increase in sequential quarterly cash burn to ($122,056) from ($119,120) in Q2 2004.

The term EBITDA is not a standard measure under Canadian generally accepted accounting principles. EBITDA, as presented in this document may not be comparable to similar measures presented by other companies. Management believes that in addition to net income, EBITDA is a supplemental measure that may assist investors in determining possible future performance...