KleenAir Announces Significant Private Equity Placement by Prudent Bear Fund

    FULLERTON, Calif.--Feb. 6, 2002--KleenAir Systems Inc. (OTCBB:KAIR), announced a significant equity purchase of KAIR stock by the Prudent Bear Fund in a recently concluded private placement of close to $1 million.
    KleenAir is nearing the end of its R & D stage as its NOxMaster(R) NOx Reduction System is now being tested and evaluated in a variety of field trials here and abroad. Since product performance has consistently exceeded expectations, it is anticipated that sales contracts will emerge from these trials.
    The principal use of funds will be to secure EPA and California Air Resource Board (CARB) Retrofit Verification. David Tice, a Dallas money manager, who heads the $200 million Prudent Bear mutual fund largely dedicated to short-selling, said: "While my main goal is the acquisition and short-selling of overvalued stock, I do have an interest in a number of undervalued longs in products and industries that are bound to grow dramatically.
    "I believe KAIR is positioned in the environment industry to take full advantage of ever tightening government regulations on NOx and particulate reduction." Tice's fund was up 7.4% last year even as the broad market plunged.
    KleenAir has a patented 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 catalytic converters and Oxidizing Particulate Traps (OPT) significantly reduce particulates, as well as hydrocarbons (HC) and carbon monoxide (CO).
    "We are excited by the confidence shown in the company by such a shrewd and successful investor as David Tice," said Lionel Simons, president of KleenAir. "These funds will enable us to meet the significant expense associated with applying for EPA and CARB certifications necessary to bring the product to market in California and elsewhere."
    CARB retrofit device verification will certify a specific level of NOx and particulate reduction which can then be used by local Air Quality Management Districts to award NOx emission trading credits. These credits contribute toward the cost of equipment and vehicle operation.

    Safe Harbor Act Disclaimer

    The statements contained in this release and statements that the company may make orally in connection with this release are not historical fact and are forward-looking statements within the meaning of the private securities Litigation Reform Act of 1995. Actual results may differ materially from those forward-looking statements, as such statements involve risks and uncertainties that could significantly impact the company's business and the actual outcome and results may differ materially.