KleenAir Systems Inc. Sells Intellectual Property Rights to U.K. Company

ALISO VIEJO, Calif.--Sept. 1, 2005--KleenAir Systems Inc. (OTCBB:KAIR) is pleased to announce that they have signed an agreement with KleenAir Systems International plc (KSIP) of the U.K., for the acquisition of its NOxMaster(R) Intellectual Property rights. It has also signed an exclusive manufacturing and distribution license for this technology for North America.

As a part of this agreement, there will be a cash payment as well as a payment annually of 8 percent of revenue generated by the commercialization of this intellectual property.

In Europe, annual production of diesel-powered vehicles has now topped 50 percent compared to just 3 percent in the U.S. For NOxMaster(R) NOx reduction technology, which is focused on diesel emissions, this market holds great commercial promise. KAIR will continue its process of EPA and CARB Retrofit Verification and launch its products in the U.S. market when that process is completed. Product improvements and application engineering solutions generated by KSIP will be made available to KAIR.

"Apart from securing significant financial benefits, this transfer of IP will enable more resources to be brought to bear in the development of engineering solutions and a variety of different product formats to meet the European and U.S. requirements," said Lionel Simons, president, "and as such will be a significant benefit to the company."

About KleenAir

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.