PVAXX Ltd. Responds to Third Party Tender Offer

(i) a $50.00 transfer fee charged by PVAXX's transfer agent, Butterfield Fund Services (Bermuda) Ltd., Hamilton, Bermuda for each transfer; and

(ii) the amount of any cash distributions made or declared on or after August 18, 2003 from the expiration date of the Offer to the date of payment.

The Board of Directors of PVAXX have evaluated the terms of the Offer and determined that it is making no recommendation as to whether shareholders should accept or reject the Offer and is remaining neutral with respect to the Offer. The Board of Directors recommends that PVAXX shareholders consider the following in making their own decision about whether to accept or reject the Offer:

(i) The Board of Directors of PVAXX has not received a fairness opinion regarding the consideration to be received in connection with the Offer price made by Varity to be fair to shareholders from a financial point of view;

(ii) The Board of Directors of PVAXX believes that the general worldwide economic conditions are currently at a relatively low point in the cycle and expects that the market will improve over the next few years, although the timing and extent of any such recovery is uncertain;

(iii) There can be no assurance that a better offer for the purchase of Common Shares will not be available now or in the future. Additionally, the Board of Directors of PVAXX can provide no assurance that the per share cash consideration that may be received by the shareholders, including any potential cash distribution made in connection with any sale or refinancing transaction, will not differ significantly from the Offer price;

(iv) Varity is making the Offer for investment purposes based on its expectation that there may be underlying value in the PVAXX business. PVAXX Shareholders who tender their Common Shares will surrender their right to participate in any future benefits from ownership of the Common Shares;

(v) Although the Common Shares are currently traded on the Bermuda Stock Exchange ("BSX"), this does not guarantee that an ascertainable and readily available public market for the Common Shares will exist, and it is not known whether a liquid public market for the Common Shares will develop;

(vi) Varity has not engaged a depositary for the Offer. As a result, there is no independent third party holding funds of Varity for payment of the Offer price that can verify independently that such funds are available for payment; and

(vii) The Offer to purchase will not include statements regarding the net worth of Varity but will specify that adequate liquid assets will be available to fund payment to tendering PVAXX shareholders on the Offer Closing Date. More detailed financial information relating to Varity is not publicly available. Consequently, any statements regarding the ability of Varity to fund the Offer are not verifiable by the PVAXX Board of Directors.

More detailed information regarding the Board of Director's position with respect to the Varity Offer is contained in the PVAXX Solicitation/Recommendation Statement that is being made part of the offering materials that are to be mailed to PVAXX shareholders prior to the Closing Date of the Offer, such date scheduled to be September 15, 2003. The Offer by Varity has resulted from the completion of due diligence by PVAXX Industries, LLC and its affiliates. Spokesmen for Varity have advised "Our conclusive meetings with the management of PVAXX Ltd. led our group to determine that our collective interests are best served by pursuing the ultimate business goals and objectives of the Company as one, cohesive Board and management team. Although we anticipate our primary manufacturing and production operations will still be located in Bahrain, we believe it will be of optimal value to both parties to forge ahead under the same corporate infrastructure. If we are successful in completing this Offer, both sides feel that the ramp-up of our operations will be expedited and adequate working capital will be available immediately. We are extremely excited about the future and look forward to a long and prosperous relationship with PVAXX Ltd."

AS A RESULT OF THIS UNSOLICITED OFFER, THE COMPANY HAS REQUESTED THAT TRADING IN THE COMPANY'S COMMON SHARES ON THE BSX BE HALTED IMMEDATELY, UNTIL SUCH TIME AS WE CAN DETERMINE WHETHER THE TENDER OFFER WILL BE

SUCCESSFULLY COMPLETED.

About PVAXX Ltd.€”

Our Company is a commercial materials science company delivering cost effective solutions which are able to be utilized on standard equipment and also must have a beneficial effect on the environment. We have successfully developed (and "applied for" or been "granted" patents on a global basis,) UnifiersÔ, which have enabled the production of:

· P2 BioCompostableÔ (biodegradable, compostable and soluble) materials that are not toxic to the environment and used in plastics and packaging manufacturing processes. P2 has been designed to be an "environmentally friendly" substitute for traditional plastics.

· Recycled Bulk Material ("RBM") that converts industrial by-products (such as pulverized fuel ash, tyre granulate and agricultural biomass) into versatile materials. RBM is suitable for the manufacture of a variety of extruded and injection moulded products for use as a replacement for timber and plastic.

· Virgin Bulk Material ("VBM") that convert low value materials (such as sand, salt and silt) into versatile materials. VBM is suitable for the manufacture of a variety of extruded and injection moulded products for use as a replacement for timber and plastic.

· SoftCapÔ pharmaceutical encapsulate, a calcium carbonate pharmaceutical capsule, which does not require the use of animal derivatives (pork and beef gelatine) Soft CapÔ is suitable for replacing gelatine and cellulose hard capsules.

This press release may include forward-looking statements about the Company's revenues and earnings and future plans and objectives. Any such statements are subject to risks and uncertainties that could cause the actual results to vary materially. These risks are discussed in the Company's BSX Listing Memorandum that may be found posted on the Company's website at www.pvaxx.com.

For more information about PVAXX LTD., headquartered in Hamilton, Bermuda, please see:

www.pvaxx.com.

For international investor relations' matters, please contact:

investorrelations@pvaxx.com