XerTech CEO Cathi Lamberti Releases Letter to Shareholders

Discussion Updates Shareholders, Speaks to Application of Innovative Turn-Key Fitness Systems and Growth Initiatives Going Forward

• Press Release
• Source: XerTech Inc.
• On 4:01 pm EDT, Friday September 25, 2009

VENTURA, Calif.--(BUSINESS WIRE)--XerTech Inc. (OTCBB: XTCH - News), a leading manufacturer, seller, and distributor of cutting-edge, interactive fitness systems, today releases a letter to shareholders from Cathi Lamberti, Chief Executive Officer, providing investors with management’s vision for the company for the remainder of 2009 and beyond.

Fellow Shareholders:

As Founder and CEO of XerTech, I thank you for taking a moment of your time to read our first Letter to Shareholders. Our intent is to regularly inform current and potential investors of our progress and potential as we build the Company and achieve our mandate to consistently deliver exceptional shareholder value.

We believe that XerTech is uniquely positioned to continue to gain global market share in the fitness market as we revolutionize the industry with our innovative programs that deliver rapid results because they are based on play and active engagement of the mind. In effect, our products are based on what people WANT to do – to have FUN and to connect socially with others. By combining entertainment with exercise, XerTech aims to effectively bridge the gap to the mainstream population and thereby contribute to the growth of the industry.

Recent studies and consequential media reporting are turning the focus from obesity to its cause – inactivity. It is estimated that 40% of the premature deaths the United States are tied to three leading indicators: smoking, obesity, and inactivity⁽¹⁾. In addition to being a primary contributor to obesity and diabetes, studies are now linking inactivity to low academic performance, and behavioral issues in schools⁽²⁾.

One of the primary tenets of the health and fitness industries is the difference between calories consumed and calories burned will produce a net weight gain or loss. The global trend towards weight gain is inextricably tied to this imbalance and a major solution lies in providing activities that people WANT to do. We believe that XerTech’s competitive edge lies in the fact that our equipment and fitness programs transform an unpleasant chore into an engaging activity that is FUN and keeps people FIT.

XerTech realized from the very beginning that we had to deliver a powerful attraction for most kids and adults to participate in exercise. Our key to achieving this is utilizing ingredients found in computer games. However, instead of letting the hands or fingers do all the work, we put the whole body to work by creating a terrific play-based workout where the focus of the individual is on the game and not repetitive exercise.

XerTech has been a successful innovator in the fitness equipment industry over the years, which despite the recession is expected to grow at an annual compounded rate of approximately 2% between 2008 and 2013⁽³⁾. Not only was XerTech a pioneer at the beginning of the interactive fitness industry, we are an ongoing leader in providing the most advanced equipment and programs to satisfy the ever increasing demand for interactive products at fitness centers, physical therapy clinics, educational institutions and nonprofit organizations like community recreation facilities and YMCAs.

As we have worked to become a leading innovator in the industry, we have accumulated a diverse set of drivers that are actively fueling our growth initiatives going forward:

• High demand for XerTech products by fitness organizations; products are cost effective, lead to higher user to staff ratios, and can provide sizable ROI.
• Broad install base; present in over 1,500 facilities and 32 countries throughout the world.
• Extensive assortment of patented and patent pending equipment.
• Provide fully turnkey commercial systems; no competitor offers fully turnkey commercial systems including programming and complete curricula.
• Expanding in both domestic and international markets, by providing an engaging activity that stimulates both the body and mind.
• Reputation for high quality products and exceptional customer service constitutes what we perceive to be a pivotal competitive advantage.
• Certified/preferred provider to major customer organizations, including YMCA, Jewish Community Centers, military bases through the GSA and many school districts and Park Districts across the country.

While we feel XerTech’s growth to date has been impressive, the future looks outstanding. As we continue to build the Company, our primary focus will be to utilize our current infrastructure to penetrate highly lucrative opportunities in new verticals, including the multi-billion dollar high performance athletic and medical rehabilitation/prevention markets. While our focus will continue to be delivering products and programs that are FUN and keep people FIT, we are equally focused on maintaining a robust technical backbone that has the ability to hold its own under the most stringent requirements – those being in the athletic and medical markets.

We see XerTech’s core strength in purpose driven exercises that allow participants to engage their bodies in a natural, functional way. The net affect is that the exercises, which are done at a higher level of intensity and focus produce a neurological response that translates to improved motor coordination and neurological efficiency, in addition to providing benefits of a high impact cardiovascular workout. We believe the added component of the MIND in our innovative programs and equipment will provide our upcoming initiatives in high performance athletics and medical rehabilitation, with a critical edge that will quickly gain traction in their respective industries in the new year.

I thank you for your support and continued interest in XerTech. For further and ongoing information, please visit our website at www.xergames.com. For access to our latest Investor Fact Sheet, as well as future interviews and industry information, go to www.trilogy-capital.com/autoir/xtch_autoir.html.

I look forward to communicating with you again soon.

Best Regards,

Cathi Lamberti

Chief Executive Officer

XerTech, Inc.

⁽¹⁾ Dr. Toby Cosgrove, as stated on the PBS’s “Charlie Rose Show.” June 16, 2009

⁽²⁾ FITNESSGRAM® statewide Texas assessment study, administered by Dr. Kenneth Cooper, results announced March 9, 2009

⁽³⁾ “Industry Profile: Fitness Equipment.” First Research, July 13, 2009.

About XerTech Inc.

XerTech Inc., (OTCBB: XTCH - News) manufactures, markets, distributes and sells high performance training equipment and programs based on a new paradigm that marries computer game technology with conventional exercise to achieve greater brain/body stimulus and interaction. We believe that we are the only company to manufacture, sell, and support fully turnkey commercial systems to the health, fitness and education industries. We seek to capitalize on two basic economic and social trends, (i) the growth and success of interactive computer games and (ii) the recognized need in the industry for fitness systems that will attract the mainstream population by supplying FUN products that make people FIT.

XerTech Inc. has developed and patented the Sportwall Performance PT®, Sportwall® Training Stations, XerTrainer™, XerPro™, the XerPlay™ Interactive Playgrounds, and the XerDance® multi-player dance game system. In addition to manufacturing and marketing its own product lines, the Company distributes Trazer® by Cybex®, Trixter® Interactive Spinning Bike and the Makoto Arena®.

For additional information, please visit XerTech’s corporate website: www.xergames.com

This press release contains certain "forward-looking" statements, as defined in the United States Private Securities Litigation Reform Act of 1995 that involve a number of risks and uncertainties. Statements, which are not historical facts, are forward-looking statements. The Company, through its management, makes forward-looking public statements concerning its expected future operations, performance and other developments. Such forward-looking statements are necessarily estimates reflecting the Company's best judgment based upon current information and involve a number of risks and uncertainties, and there can be no assurance that other factors will not affect the accuracy of such forward-looking statements. It is impossible to identify all the factors that could cause actual results to differ materially from those estimated by the Company. Such factors include, but are not limited to, the Company's ability to maintain operations, the Company's ability to compete in the health, fitness and education markets and serve its customers, the Company's access to future capital, the successful integration of the acquired companies, government regulation, managing and maintaining growth, the effect of adverse publicity, litigation, competition, and sales, as well as other factors that may be identified from time to time in the Company's public announcements. For a more detailed discussion of the risks and uncertainties of XerTech's business, please refer to the Company's Current Report on SEC Form 8-K filed with the Securities and Exchange Commission on July 2, 2009, and as subsequently amended. The company assumes no obligation to update any forward-looking statement contained in this press release or with respect to the announcements described herein.

XerTech Inc.
Cathi Lamberti, Chief Executive Officer
Toll-free: 800-695-5056
cathi.lamberti.ceo@XerGames.com
or
Trilogy Capital Partners
Financial Communications
Darren Minton, Vice President
800-592-6067
info@trilogy-capital.com