AUSTIN, TX, Aug. 10 /PRNewswire-FirstCall/ -- Xplore Technologies Corp. (TSX: XPL) ("Xplore" "the Company"), a leading rugged mobile computer provider, reported its financial results today for the first quarter ended June 30, 2006, including record revenues of $9.2 million, which increased approximately 50% over the prior year period. Xplore also announced the closing of a private placement in which the Company raised gross proceeds of approximately $3.4 million by issuing 9,988,513 Series B Preferred Shares. The financial results announced are in thousands of United States dollars, except for percentage and per share amounts.

Mark Holleran, President and Chief Operating Officer, indicated "Our execution resulted in the best quarter of the Company's history. We not only had record revenues, but this was our seventh consecutive quarter of revenue growth. This demonstrates the favorable acceptance of our Centrino-based tablet, especially on a global scale, as non-U.S. markets accounted for more than 50% of our revenue. We believe we have the best rugged mobile computer in the marketplace and our customers have embraced that value."

"We are pleased with the closing of the private placement of Series B Preferred Shares" stated Philip Sassower, Chairman of the Board of Directors of Xplore and Chief Executive Officer. "Through the recent Series A and Series B Preferred Share issuances, a total of approximately $7.1 million of additional capital has been raised. These new funds, together with the conversion of approximately $18.9 million of debt into equity, substantially complete our financial recapitalization. We believe that, with a greatly improved balance sheet showing approximately $2.9 million of positive shareholders' equity, Xplore can move forward with its plans to improve the feature sets of its award winning rugged tablet PC, develop a broader product line of other rugged mobile/wireless devices, such as a rugged notebook, and complete the Company's planned corporate migration to the United States" he added.

Financial Results of Operations -------------------------------

Revenue for the quarter ended June 30, 2006 was $9,179 compared to $6,125 for the first quarter of the prior year. This is the Company's seventh consecutive quarter of revenue growth. The revenue increase was primarily attributable to a slightly larger sales force that continued our greater focus on Fortune 500/Global 2000 companies and to increasing demand for our product outside of the United States.

Gross profit for the quarters ended June 30, 2006 and 2005 was $2,508 and $1,429, respectively, and gross profit as a percent of revenue for those periods was 27.3% and 23.3%, respectively. The current year improvement in the gross profit percentage is attributable to the increase in revenue, the related favorable impact of fixed manufacturing costs on a higher level of sales and the product mix being primarily Centrino-based.

Operating expenses were approximately $2,974 and $2,666 for the three months ended June 30, 2006 and 2005, respectively. The increase in costs consists of increased investments in our sales force and the development activities related to our recently announced third generation iX104. These increases were offset by a reduction in our general and administration expenses as the prior year quarter included $425 of non-recurring costs related to the restatement of certain of our prior years' financial statements.

The Company's loss from operations declined from $1,237 for the three months ended June 30, 2005 to $466 for the three months ended June 30, 2006. The net losses were $1,735 and $1,844 for the three months ended June 30, 2006 and 2005, respectively. Net loss per share was $0.03 for both three month periods.

Series B Funding ----------------

The Series B Preferred Shares issued in this private placement have similar rights and preferences as the Series A Preferred Shares previously issued by the Company. The Series B Preferred Shares are convertible initially on a one-for-one basis into common shares of the Company at any time at the option of the holder, subject to adjustment for stock dividends, splits, combinations and similar events. The Series B Preferred Shares carry a cumulative 5% dividend that may be paid in stock, contain voting rights consistent with the Company's common shares, and have certain protective provisions, liquidation preferences and conversion features.

The securities offered and any securities issuable on conversion thereof have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.

About Xplore Technologies(R)

Xplore Technologies Corp, founded in 1996, is an innovative leader in the rugged PC industry. Xplore, whose common shares are listed for trading on the Toronto Stock Exchange under the symbol XPL, has offices in Austin Texas and Helsinki Finland. Its rugged iX104TM family of hardware solutions incorporate leading-edge technology, and are designed based on years of customer design input. Xplore's diverse customer base comes from the public safety, retail and wholesale warehousing, utility, military, field service and transportation industries. Xplore hardware solutions are available from Xplore or one of its authorized channel partners, for more information, visit http://www.xploretech.com/. Xplore Contact Information:

The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.

Xplore Technologies is a registered trademark of Xplore Technologies Corporation of America. iX104, iX104R, iX104T, Renegade, All Terrain, iX104C2 are trademarks of Xplore Technologies Corporation of America. All other tradenames, marked or not, are the sole property of their respective owners.

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This news release contains forward-looking statements that involve risks and uncertainties, which may cause actual results to differ materially from the statements made. When used in this document, the words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions are intended to identify forward-looking statements. Such statements reflect Xplore's current views with respect to future events and are subject to such risks and uncertainties. Many factors could cause actual results to differ materially from the statements made including those factors detailed from time to time in filings made by Xplore with securities regulatory authorities. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated or expected. Xplore does not intend and does not assume any obligation to update these forward-looking statements.

------------------------------------------------------------------------- - See Attached Financial Statements - XPLORE TECHNOLOGIES CORP. Consolidated Balance Sheets (in thousands of United States dollars) ------------------------------------------------------------------------- UNAUDITED AUDITED --------------- --------------- June 30, 2006 March, 31, 2006 --------------- --------------- ASSETS ------ CURRENT ASSETS: Cash and cash equivalents $ 691 $ 56 Accounts receivable, net 5,702 4,613 Inventory 3,850 3,713 Prepaid expenses and other current assets 400 826 --------------- ---------------- Total current assets 10,643 9,208 --------------- ---------------- Fixed assets, net 581 597 Deferred charges 76 1,419 --------------- ---------------- $ 11,300 $ 11,224 --------------- ---------------- --------------- ---------------- LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY) ------------------------------------------------- CURRENT LIABILITIES: Bank indebtedness $ 1,911 $ 1,672 Accounts payable and accrued liabilities 6,273 7,042 Short-term debentures - 5,000 --------------- ---------------- Total current liabilities 8,184 13,714 --------------- ---------------- Debentures 250 12,005 --------------- ---------------- 8,434 25,719 --------------- ---------------- Commitments and contingencies SHAREHOLDERS' EQUITY (DEFICIENCY): Series A Preferred Shares 18,889 - Share capital 64,027 63,834 Contributed surplus 1,400 1,340 Warrants 2,273 2,319 Deficit (83,723) (81,988) --------------- ---------------- 2,866 (14,495) --------------- ---------------- $ 11,300 $ 11,224 --------------- ---------------- --------------- ---------------- XPLORE TECHNOLOGIES CORP. Consolidated Statements of Loss - Unaudited (in thousands of US dollars, except loss per common share) ------------------------------------------------------------------------- Three Months Ended ------------------------------------ June 30, 2006 June 30, 2005 --------------- ---------------- (Restated) Revenue $ 9,179 $ 6,125 Cost of revenue 6,671 4,696 --------------- ---------------- Gross profit 2,508 1,429 --------------- ---------------- Expenses: Sales, marketing and support 1,574 1,119 Product research, development and engineering 600 334 General and administration 800 1,213 --------------- ---------------- 2,974 2,666 --------------- ---------------- Loss from operations (466) (1,237) --------------- ---------------- Other expense: Interest expense (1,267) (586) Other (2) (21) --------------- ---------------- (1,269) (607) --------------- ---------------- Net loss $ (1,735) $ (1,844) --------------- ---------------- --------------- ---------------- Loss per common share (2005 Restated) $ (0.03) $ (0.03) --------------- ---------------- --------------- ---------------- Weighted average number of common shares outstanding (2005 Restated) 57,855 54,986 --------------- ---------------- --------------- ----------------

CONTACT: Xplore: For Media or U.S. Investor Information Contact: Martin
Janis & Company, Inc., Beverly Jedynak, Tel: (312) 943-1100, Email:
b.jedynak-janispr@worldnet.att.net