KleenAir Announces $2 Million Sale of Zero-Coupon Convertible Preferred Stock

IRVINE, Calif.--April 21, 2004--KleenAir Systems Inc. (OTCBB:KAIR) announced an institutional financing for $2 million has been agreed with a London-based investment company.

The investment is in the form of zero-coupon, restricted non-voting convertible preferred stock with a minimum 2-year period before conversion rights can be exercised. Payment is in the form of $2 million of free trading stock.

The transaction adds $2 million to the company's balance sheet as a current asset and helps improve the liquidity of the company. It will provide cash-flow opportunity as required to meet operating expenses of the company and will be particularly helpful in meeting the upcoming costs of EPA and CARB Retrofit Verification testing.

"This new demonstration of confidence in the growing prospects of KleenAir Systems as it prepares to commercialize its NOx reduction technology is very gratifying," said Lionel Simons, president, "and provides the resources to move the company through its takeoff period."

KleenAir is at the cutting edge of automotive emission reduction technology including Selective Catalytic Reduction (SCR), Diesel Particulate Filters, Diesel Oxidizing Catalysts and advanced catalytic technology that significantly reduces nitrogen oxides, carbon monoxide, hydrocarbon and particulates. These pollutants have been shown to be a major contributor to heart and lung disease.

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.