KleenAir Systems Inc. Affiliate to Receive $2.25 Million in Funding

IRVINE, Calif.--Sept. 8, 2004--KleenAir Systems Inc. (OTCBB:KAIR) announced today that their U.K. affiliate has signed a contract for a pre-IPO equity funding of $2.25 million with Hoodless Brennan, a London corporate broker and major fund-raiser active on the Alternative Investment Market (AIM).

KleenAir Systems Inc. owns 30 percent of KleenAir Systems International Plc. The licensing agreement between the companies calls for KleenAir Systems Inc. to receive an 8 percent royalty on gross sales of KleenAir Systems International Plc, which plans to apply for a listing on the Alternative Investment Market (AIM) on the London Stock Exchange.

KleenAir Systems International Plc has license rights for diesel emission reduction systems for Europe and Asia. Currently, almost 50 percent of auto market in Europe is diesel-powered compared to under 5 percent in the United States. KleenAir Systems International Plc, through its wholly owned subsidiary KleenAir Systems Ltd, along with their strategic partner Dinex A/S, have been approved for the CleanUp Register of the Energy Savings Trust (EST) for a variety of vehicles ranging from the London Taxicab to buses. Ongoing trials with another major NYSE company are expected to result in additional product certifications in the near future.

"As the time approaches for the Public Carriage Office (PCO) and Transport for London (TfL) to finalize plans and policies for the upgrade of public transport fleets to meet current emission standards, we need to raise the working capital to meet the market requirement and secure an early and definitive lead in market share for technology that combines NOx and Particulate reduction," said Lionel Simons, chairman of KleenAir Systems International Plc.

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.