UK Taxi Funding Grant Awarded to KleenAir

    FULLERTON, Calif.--Aug. 28, 2001--KleenAir Systems Inc., (OTCBB:KAIR) through its UK affiliate NOxMaster Ltd., as a result of KleenAir's previous tests being achieved with dramatically greater than required reduction in particulates, KleenAir has been awarded a major grant under a UK government funded program to complete the final phase of its London Taxi Emission Testing Demonstration Project. The purpose of the project is to reduce NOx and Particulates from taxicab exhaust. London taxis are a major contributor of pollution to the London environment and a priority target for the UK Government.
    The Company will equip several London Taxicabs with its NOxMaster(R) combination SCR/DOC system. The Taxicabs will be used for several months in-service in London. This is a cost-effective retrofit program that the Company believes will demonstrate the viability, durability and safety of its system for use on light-duty passenger vehicles. KleenAir anticipates approval of the Public Carriage Office (PCO) and subsequent certification by the Vehicle Certification Authority (VCA).
    KleenAir owns the patented and unique computer controlled ammonia system, the NOxMaster(R), which, when injected into the exhaust stream, interacts with NOx produced during combustion. The result converts environmentally hazardous NOx into harmless nitrogen and water. In addition, the Company's exclusive and unique converters significantly reduce particulates as well as hydrocarbons (HC) and carbon monoxide (CO). These pollutants have been shown to be a major contributor to heart and lung disease.
    Successful demonstration of the system's effectiveness, as indicated in previous tests, could lead to subsequent equipping of a significant portion of the UK fleet numbering some 40,000 vehicles, with the possibility of a UK Government subsidy to facilitate the program for the cab owners. Cost of the system, on a per vehicle basis, is anticipated to be approximately $750.
    Furthermore, KleenAir's patented and unique system would be the first successful demonstration of a low-cost retrofit combination NOx and particulate reduction system for small passenger diesel vehicles. To evaluate the potential market penetration, one must realize that 5 million such vehicles are manufactured in Europe each year and there are currently over 40 million such vehicles currently in service throughout Europe. KleenAir believes that successful application of its products in this market could generate significant future revenues and bring to fruition, the substantial valuation of $165 million as assessed for KleenAir by Valuations Consultants of London.