Sonex Signs Letter of Intent for UAV Heavy Fuel Engine Technology License

ANNAPOLIS, Md., June 22 -- SONEX RESEARCH, INC. , a leader in the field of combustion technology, announced that it has signed a Letter of Intent (LOI) with a producer of unmanned aerial vehicles (UAVs) pursuant to which the parties have expressed an intention to complete negotiations for and conclude a technology licensing agreement by the end of the summer. The LOI contemplates an exclusive license for a part of the patented Sonex Combustion System (SCS) heavy fuel engine (HFE) technology applicable to a certain size range of small engines. While Sonex must caution that the definitive licensing agreement has not yet been finalized, it has received a non-refundable deposit of $25,000 towards future royalties as part of the LOI. The LOI contains confidentiality provisions that preclude the disclosure of the customer's name and further details of the relationship at this time. Both parties will release a joint statement upon completion of the agreement including the terms of the joint activities.

The Department of Defense (DoD) now requires engines used in UAVs and other military applications for which gasoline storage and use are undesirable, to operate on less volatile, heavy fuels to reduce the hazard associated with gasoline. Sonex has established a viable HFE technology baseline by applying its patented SCS modified combustion chamber design and proprietary starting system to the conversion of lightweight, spark-ignited (SI), two-stroke gasoline engines for use in military applications such as UAVs to start and operate with reduced fuel consumption and low smoke on kerosene-based heavy fuels JP-5, JP-8 and D-2 diesel (with lubricant additive) while retaining the ignition precision of the SI process. The SCS process for two-stroke engines achieves in-cylinder control of ignition and combustion through the chemical/turbulent enhancement of combustion via combustion chamber modifications that change the chemical characteristics and fuel disbursement characteristics within the combustion chamber.

Sonex has previously announced two agreements with this unnamed customer, the first in October 2005 worth approximately $113,000 to develop a combustion system to convert the small, two-stroke, SI gasoline engine used in one of the customer's production UAVs to heavy fuel operation. Following the successful demonstration to the customer in February 2006 of a "Proof of Concept" laboratory SCS HFE(TM) prototype operating on JP-5 heavy fuel, the Company announced the award in March 2006 of a follow-on Phase 2 project worth approximately $235,000 to develop, fabricate and qualify pre-production, flight ready SCS HFEs(TM). Phase 2 is expected to be completed this summer, following which the parties plan to undertake additional phases for SCS HFE(TM) flight certification testing and production introduction.

About Sonex

Sonex Research, Inc., a leader in the field of combustion technology, is developing its patented Sonex Combustion System (SCS) piston-based technology for in-cylinder control of ignition and combustion, designed to increase fuel mileage and reduce emissions of internal combustion engines. Sonex plans to complete development, commercialize and market its Sonex Controlled Auto Ignition (SCAI) combustion process to the automotive industry to improve fuel efficiency of gasoline powered vehicles. Additionally, independent third- party testing has confirmed the potential of the SCS application for direct- injected diesel engines to significantly reduce harmful soot in-cylinder without increasing fuel consumption. Other SCS designs are being used to convert gasoline engines of various sizes to operate on safer, diesel-type "heavy fuels" for use in military and commercial applications requiring light weight and safe handling and storage of fuel, such as in UAVs (unmanned aerial vehicles).