EarthShell Corporation (Nasdaq: ERTH), innovators of patented, environmentally preferable foodservice packaging, announced today that the company has been in discussions to develop a more traditional arrangement to supply EarthShell containers for Big Mac sandwiches in the U.S. McDonald's system. Additionally, it has been agreed that EarthShell is free to market its products to other customers even before the conclusion of the validation testing process with McDonald's. "This will not reduce our commitment to meet the production demand for EarthShell Big Mac sandwich containers," said Simon Hodson, Chief Executive Officer of EarthShell Corporation. While there may not be specific annual purchase commitments going forward with this new arrangement, once approved, the EarthShell containers are still intended to be used in the U.S. McDonald's system based on the success of continued validation testing results. EarthShell containers have been in daily use in 128 McDonald's stores since late April, and the company continues to believe it will meet all of the validation criteria for approval for future expansion to supply Big Mac containers within the U.S. McDonald's system.

"This new arrangement will enable us to begin further business development by immediately marketing our line of environmentally preferable products to other customers," said Mr. Hodson. "We appreciate McDonald's recognition of our need to develop other customers even before validation is complete. Additional capacity is currently under design," Hodson added.

The Company also reported that, at McDonald's request, the in-store validation program will now use EarthShell containers with FDA-compliant post consumer waste ("PCW") recycled fiber in place of virgin fiber. EarthShell sandwich containers are made primarily from natural limestone and potato starch to achieve their performance and environmental characteristics. The addition of a small percentage of PCW recycled fiber enhances the product's already strong environmental profile.

Due to the recent unavailability of FDA-compliant PCW fiber, EarthShell began using FDA-compliant virgin fiber and began developing alternative commercial sources of FDA-compliant PCW fiber from school milk cartons and juice boxes. The development of new PCW sources has now been completed and the validation program is being extended while the new PCW fiber supply is integrated into inventory and all other validation criteria and specifications are measured. Recycled fiber from the new source has been used in production for four weeks at EarthShell's first manufacturing facility, and initial quality and efficiency data are comparable to virgin fiber.

EarthShell Packaging is considered an environmentally preferable alternative made from new-to-the world composite material, which consists primarily of abundant limestone and starch. It uses less total energy and results in low greenhouse gas emissions when compared to traditional packaging. EarthShell Packaging is strong and provides good insulation. It biodegrades in marine and composting environments, and is recyclable through composting.

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.