Morrow Snowboards Inc.
Releases 8K, Including Announcement of New Proposed Financing for Westbeach Brand

5/5/99

SALEM, Ore., May 4 -- Morrow Snowboards, Inc. (Nasdaq: MRRWE) ("Morrow" or the "Company") filed an 8-K today ("Form 8-K") with the SEC covering the following:

As of the close of business on April 26, 1999, Morrow Snowboards, Inc. was delisted from the Nasdaq National Market System. Because Morrow is not current in its filings under the Securities Exchange Act of 1934, trading in the Company's securities will be reported in the pink sheets until the Company has filed its Annual Report on Form 10-K for the 1998 fiscal year. The delay in filing reflects the additional time needed to restate prior years financials following the sale of Morrow's snowboard assets in March 1999. Morrow anticipates it will file the 10-K on or about May 10, 1999 and be listed on the OTC Bulletin Board shortly thereafter.

Morrow also reported an out-of-court settlement with certain trade creditors who had previously filed an involuntary petition for relief under Chapter 7 of the United States Bankruptcy Code. Under the settlement, Morrow's creditors' claims would be secured by a lien against Morrow's real property in Salem, Oregon, subject to the existing Foothill Capital Corporation loan ("Foothill loan") and a limited senior lien to secure additional financing. Under the settlement, at Morrow's option, such creditors will receive payments of 85% of the amount of their claims, in full satisfaction, if paid within 60 days after an order dismissing the involuntary petition becomes final. Morrow has listed the Salem real estate for sale. Morrow's agreement to make such payments and to grant such a lien is conditioned upon Bankruptcy Court approval and approval of Morrow's creditors, including at least 90% in dollar value of creditors holding claims in excess of $10,000 agreeing to settle their claims on these terms.

To allow Morrow and the petitioning creditors time to document the settlement, as well as to provide other creditors time to review and agree to the settlement terms, Morrow and the petitioning creditors filed a Stipulation for Order Extending Time to Respond to Involuntary Petition. The deadline for Morrow to respond to the involuntary petition has been extended to July 2, 1999. Once the settlement is finalized and submitted to the Bankruptcy Court, obtaining the required approvals and the passage of any appeal periods is expected to take approximately 40 to 45 days.

Morrow also announced a binding Memorandum of Understanding ("Memorandum") with Capitol Bay Management, Inc. to provide Morrow with additional financing to be used as working capital. Under the Memorandum, Capitol Bay will acquire the Foothill loan and related security interests in Company assets. Capitol Bay is also obligated to obtain and fund a loan to be secured by Morrow's real estate. As outlined in the Form 8-K, Capital Bay's obligations and conversion rights outlined below are subject to a number of conditions. Upon the Chapter 7 dismissal of the involuntary bankruptcy petition, and for a period of 12 months thereafter, Capitol Bay may elect to convert $500,000 of the Foothill loan into 2,000,000 shares of Morrow Common Stock.

In the Form 8-K, Morrow also reported that Marmot Mountain Ltd. has filed suit against Morrow, alleging breach of a contract where Marmot had agreed to provide Morrow with design, manufacturing and merchandising services related to snowboard apparel and seeking $130,000, plus interest and attorney's fees. In general, all litigation against Morrow is currently stayed pending resolution of the involuntary bankruptcy petition. Should proceedings commence, Morrow intends to negotiate a settlement on the basis that Morrow believes its liability under the contract is limited to a lesser amount.

A more detailed discussion of the above matters and other matters, together with a copy of the Company's agreement with Capital Bay Securities is contained in the Company's 8-K filed May 4, l999.

This press release contains forward-looking statements which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including, without limitation, the continuing cooperation of Morrow's secured lender, Foothill, the adequacy of available working capital, the effect of the bankruptcy filing and Morrow's ability to continue operations in designing and distributing Westbeach brand apparel.

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