KleenAir Announces $1.5 Million Successful Equity Funding by U.K. Affiliate

IRVINE, Calif.--Dec. 2, 20041, 2004--KleenAir Systems Inc. (OTCBB:KAIR) confirms today that a previously announced pre-AIM private funding raise by its U.K. affiliate KleenAir Systems International plc (KSIP) has closed. It generated considerable investor interest. At closing the company received in excess of $1,500,000 from private investors in London.

The funding was secured by the Private Equity Division of U.K. investment broker, Hoodless Brennan plc, under the direction of Marcus Barrett, head of the division.

This funding will provide the initial working capital necessary to meet the challenge of coping with the expected systems sales that will result in the first half of 2005 from the announcement yesterday, by Mayor Ken Livingstone, of a mandate to upgrade London's Taxicabs to current Euro 3 emission standards. It is expected that KSIP will seek an AIM flotation during 2005 to raise the much more substantial funds that will be needed to deal with a large number of systems for taxis, "white vans" and heavy duty vehicles that are expected to be upgraded by 2007 under the mayor's overall Low Emission Zone strategy for improving air quality in London.

It is expected that over 17,000 taxis will eventually fit particulate and NOx reduction devices or convert from diesel to liquid petroleum gas (LPG). KleenAir's NOxMaster and the DINOX emission control system of KleenAir's strategic partner, Dinex Exhaust Systems Ltd., are currently approved by the Energy Savings Trust (EST) Clean-Up Register for fitting to the London taxicabs, light commercial vehicles, heavy duty goods vehicles, buses and refuse collection vehicles.

"A new era in emission control technology is beginning for the retrofit market, given that 90% of pollution is contributed by the existing on-road vehicles," said Lionel Simons, president of Kleenair Systems Inc., "and together with our strategic partner, Dinex Exhaust Ltd., we expect to advance the cause of public health, not only in London, but throughout Europe."

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.