Kleenair Systems (kair)

[onewon]

KleenAir Announces Significant Revenue Increase

(KAIR)-KleenAir-Irvine-Aug 15, 2003-in filing its second quarter 10QSB has revealed an increase in first half revenue as compared with the same period last year. While still modest at $238,000 gross revenue for the 6 month period, this compares to $25,000 for the same period in 2002 and a cumulative $175,000 over the previous 7 years as the Company was developing and perfecting its NOxMaster(R) NOx Reduction System.

"These results reflect the Company's move from being a purely R & D Company to the beginning of commercialization of its technology, initially in the European market, as we have been predicting for the past year," said Lionel Simons, President, "and we expect the current upward trend to continue and gather speed over the months and years ahead."

The 10Q reveals that during 2002 almost $1 million was raised through the sale of equity. During 2003 no equity was sold to support further growth, and activities have been financed by officer loans and sales activity.

The Company felt that, for a variety of reasons, KleenAir stock has been significantly undervalued, and the decision was made to avoid raising capital by selling shares at current prices because of the dilution impact for existing shareholders. Instead the Company decided to borrow funds from officers, which would be effectively subordinated to other debt, thus avoiding some financial risk. This policy reflects the high level of confidence by the officers and directors in the future of the Company.

During this year a $100,000 loan to Extengine Transport Systems LLC, a licensee, were written off due to non-payment, in addition to $120,000 of loans defaulted by Extengine and its officers during 2002. Furthermore, Extengine and its associates have sold into the market their shareholding of close to 1,400,000 shares resulting in constant downward pressure on the stock.

KleenAir is at the cutting edge of Selective Catalytic Reduction (SCR) technology that significantly reduces nitrogen oxides. 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.

--30--EC/la*

CONTACT: KleenAir Systems Inc., Irvine
Lionel Simons, 949-955-3492
(Business Wire)