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EarthShell Manufacturing Expansion Enabled by Equipment Guarantees

EarthShell Manufacturing Expansion Enabled by Equipment Guarantees

Published 05-24-02

Submitted by EarthShell Corporation

SANTA BARBARA, California - EarthShell(R) Corporation (NASDAQ: ERTH), innovators of food service packaging designed with the environment in mind, today announced that its manufacturing partners will receive equipment performance guarantees from certified equipment vendors, thus enabling rapid expansion of production capacity for foam laminate plates, bowls, hinged-lid containers and cups.

Four leading equipment manufacturers have submitted bids to build EarthShell production lines, and each has agreed to provide guaranteed performance levels. One of the equipment vendors, Detroit Tool and Engineering, Lebanon, MO (NASDAQ: DTII) is the first to be under contract to build five turnkey manufacturing lines with guaranteed equipment performance. This is an important step in transitioning production of EarthShell foam laminate products to manufacturing partners, including Sweetheart Cup Company, Inc., Green Earth Packaging, Inc. and Huhtamaki Oyj, each with protected market areas.

"Detroit Tool and Engineering is a certified builder, currently building fully automated and integrated manufacturing systems for the production of EarthShell foam laminate products," said Ken Cook, Vice President, Sales and Marketing, Detroit Tool and Engineering. "DTE will work directly with EarthShell manufacturing partners and guarantee high levels of equipment performance."

The combined capacity of the four equipment vendors that have submitted proposals, if approved by the manufacturing partner, would be approximately 100 lines per year, with each line capable of generating $5-6 million of EarthShell foam laminate product sales annually. EarthShell Corporation royalties are based on the output from each operating manufacturing line. The first six production lines are under construction and scheduled for delivery by the end of the next quarter.

Last week, EarthShell Corporation signed a letter of intent with Sweetheart Cup Company providing the basis for Sweetheart to be the primary supplier of EarthShell foam laminate products in North America, with a target of $500 million, or approximately five percent of the $10 billion U.S. food service disposables market. Concurrent with this activity, the Huhtamaki Oyj /EarthShell Joint Venture in Europe is assuming full responsibility for EarthShell manufacturing operations in Germany, while Green Earth Packaging, Inc. will be responsible for manufacturing operations in Utah and Malaysia.

"Guaranteed equipment performance has been one of our primary objectives as part of transferring operations to our manufacturing partners which will expand production capacity for EarthShell products," said Simon Hodson, chief executive officer of EarthShell Corporation.

EarthShell sandwich containers, plates and bowls are designed with the environment in mind. Developed over many years using a "life cycle inventory" and in consultation with leading environmental experts, EarthShell products reduce the environmental burdens of rigid food service packaging through the careful selection of raw materials, processes and suppliers. The products are made primarily from natural limestone and potato starch. The new packaging poses substantially fewer risks to wildlife than polystyrene foam packaging because it biodegrades when exposed to moisture in nature, physically disintegrates in water when crushed or broken, and can be composted in a commercial facility (where available) or in your backyard. In addition, the company has recently introduced flexible packaging in the form of sandwich wraps that also have been developed using a "life cycle inventory." Like EarthShell's rigid packaging, the wraps also biodegrade when exposed to moisture in nature and can be composted in a commercial facility (where available) or in your backyard.

EarthShell Corporation is engaged in the licensing and commercialization of proprietary composite material technology for the manufacture of foodservice disposable packaging, including cups, plates, bowls, hinged-lid containers, and sandwich wraps. In addition to certain environmental characteristics, EarthShell Packaging is designed to be cost and performance competitive compared to other foodservice packaging materials.

For more information, please visit our website www.earthshell.com.

This press release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties of other factors which may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in the Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's most recent Form 10-K and other documents filed by the Company with the Securities and Exchange Commission.

EarthShell Corporation

EarthShell Corporation

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