KleenAir Systems Inc. Closes $2 Million Financing Agreement with Private U.K. Investment Fund

IRVINE, Calif.--Oct. 5, 2004--KleenAir Systems Inc. (OTCBB:KAIR) is pleased to announce that they have closed an agreement for institutional financing for approximately $2 million with a London-based private investment fund. This fund has now been admitted to the London Stock Exchange and will begin trading on Oct. 7, 2004.

This investment fund has entered into a "lock-up" agreement with KleenAir Systems Inc. pursuant to which it has agreed not to trade KAIR shares it has received for a period of 2 years.

The final valuation of the shares was approximately $0.168 and 10 million shares were issued valued at $1,680,000. Fifty percent of these shares are immediately free-trading on the London Stock Exchange, the company having agreed to "lock-up" the balance for a period of 2 years.

"This financial transaction provides us with both a degree of liquidity and a significant improvement in our balance sheet. Sales of the stock are anticipated from time to time in order to support the company's working capital requirements as it moves forward with its EPA Retrofit Verification Program," stated Lionel Simons, president of KleenAir Systems Inc.

About KleenAir Systems Inc.

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.