KleenAir $2 Million Financing Deal

IRVINE, Calif.--July 28, 2004--KleenAir Systems Inc. (OTCBB:KAIR) announces another institutional financing for $2 million has been agreed with a second London, UK based investment company.

The Company is preparing for major testing programs to certify its products and qualify for emission trading credits. Retrofit Verification has been applied for from both the Environmental Protection Agency (EPA) and the California Air Resource Board (CARB). In order to qualify for a variety of different medium and heavy duty vehicles, significant working capital will be necessary. This funding provides additional resources to meet this challenge.

"This new financing is a further demonstration of confidence in the growing prospects of KleenAir Systems as it prepares to commercialize its NOx reduction technology," said Lionel Simons, President, "especially in view of the depressing effect on our stock price of the recent unauthorized Berlin Stock Exchange listing."

The transaction exchanges $2 million of a quoted London Stock Exchange investment trust equity for an equal value of KAIR stock. This helps improve the balance sheet and liquidity of the company.

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.