City Engines Formed - hydrogen/natural gas

RENO, Nev.--April 11, 2005--Collier Technologies Inc. (CTI) announced today the formation of a new low-emissions U.S. OEM heavy-duty engine manufacturer, City Engines Inc. CTI has licensed City Engines with their patented hydrogen/natural gas (HCNG)-related technologies that have demonstrated capabilities of meeting the upcoming California 2007 heavy-duty emissions standard with less than 0.2 g/hp hr of NOx. CTI is also a 20% initial shareholder in City Engines, as well as having a seat on the board of directors. Jerry Jones and Neal Mulligan, the past president and the past chief operating officer of CTI, have joined City Engines as their new president and COO, respectively. Dr. Kirk Collier has assumed the duties of president of CTI.

Collier said, "This step is in keeping with our objectives of finding large manufacturers that can utilize our technologies to have significant impact on reducing harmful emissions in the atmosphere." He further stated, "We will continue CTI's transition to licensing and supporting licensees around the world, taking advantage of the significant results obtained from our research, development, and demonstration activities."

The new OEM has distribution agreements with Daewoo Heavy Industries (DHI) for their heavy-duty gas engines. The initial engine offered will be the base DHI 11-liter platform, outfitted with CTI-designed cylinder heads that will be manufactured in the United States. The initial sales targets are the metropolitan transit authorities in the United States, where demonstrations of the engines in bus platforms are already under way. The new engines will require California Air Resource Board (CARB) emissions certification. These certifications will be conducted over the next six to 12 months for CNG fuels to meet the existing 2004 CARB Standard as well as with a 30% HCNG blend to meet the upcoming 2007 Standard. Future engine and cylinder head combinations are planned for the DHI 8-liter and 5.9-liter engines as well. It is anticipated that City Engines will both fill the need for certified CNG engines, for which there is a shortage in the United States, as well as providing assurances to transit authorities that low-emissions engines will be economically available in 2007.