Hydrogen Installation System For Transit Buses CONFIDENTIAL PRESENTATION August 2011

2 INDEX: 1. Operating principles and basic set up in the bus 2. Benefits 3. Safety 4. Maintenance requirements 5. Bus testing - before and after 6. Presenting Innovative Hydrogen Solutions 7. Field experience of IHS 8. Response of Engine manufacturers 9. Proposed Test Plan CONFIDENTIAL Hydrogen System Presentation - Index

3 Hydrogen System Operating Principles Combustion Enhancement Principle: Electrolysis cell produces Hydrogen and Oxygen gases from water Output is constant providing the engine is in operation These gases are added to the existing air intake manifold of the engine Both gases enhance the combustion process through – faster flame spread leads to a more complete burn of all the fuel – cleaner combustion process results in less soot production – increased engine power due to force of hydrogen combustion Engine will be cleaned over time from carbon deposits Reduction of most Carbon and NOX emissions in exhaust fumes

4 Hydrogen System Operating Principles Basic set up in the Bus: Electrolysis cell is located in a cavity near the engine (approx. 1.5 cuft) The cell receives power from the bus (20 amps) Distilled water needs to be replenished in a dedicated reservoir Installation takes place in existing engine set up Electronic controls are limited given the simplicity of the system

5 Hydrogen System - Benefits 1. More complete burning of all the fuel that enters the combustion chamber: Increased engine power with same amount of fuel, i.e. same engine output - less fuel Less residual fuel in exhaust fumes and oil 2. Impact of Hydrogen on the combustion: Cleaning of old Carbon deposits within the engine 3. Less Soot in the combustion process Reduced contamination of engine oils Reduced soot in the exhaust fumes Reduced EGR Replacement Reduced DPF Replacement and Maintenance Regeneration Cycle moved out 4. Other aspects to be investigated: Engine temperature impact (temperature at tailpipe about 65 degrees cooler) Longer engine life expectancy Maintenance requirements of the Hydrogen unit CONFIDENTIAL

6 Hydrogen System - Safety 1.Combustion nature of Hydrogen: Hydrogen must be 4% by volume to be explosive; Bus System only produces less than 1% Hydrogen by volume, as part of the air/fuel mixture Fire testing completed by Wardop Engineering 2. Hydrogen: is 14 times lighter than air and dissipates fast burns 9 times quicker than gasoline, propane or methane is a colorless, odorless, tasteless and non-toxic gas 3. System controls: Electrolysis Cell will only operate if engine is running; if it shuts off, it will vent the left over gasses Fluid level sensor will shut down the unit, if water is low Pressure check valve in unit will vent if 5 lbs. pressure builds up System is independently fused to protect the bus from any possible failure All electrical components are contained in a safety-rated box CONFIDENTIAL

7 Hydrogen System - Maintenance Requirements 1. Replenishment of the water Usage of water is 47 ml. per hour of operation of the unit Storage volume for Distilled water to be sized to monthly maintenance cycles 2. Electrolytic plates Do not require maintenance; life expectancy to be 10 years/ operating hours 3. Validation of the unit Weekly visual inspection of all components Validation of the operation of the unit completed by Wardrop Engineering and Clean Air Technologies Inc. CONFIDENTIAL

8 Hydrogen System - Bus Testing: Before and After 1. Bus is to be tested during its actual in-service operation bench or dynamometer is not representative of the duty cycle changes relative large variation in the field between duty cycles in different cities, results in varying levels of benefits engine age, model and type create other variables, as do buses within the same delivery 2. IHS uses CARB approved mobile exhaust fumes tester [PEMS] Proof is in the pudding I.e. exhaust No Bus Fuel measuring required as residual fuel in exhaust is measured Measuring takes place during a standard test at idle and takes a total of 1 hr 3. Improvements over time As the carbon deposits in the engine are being burned off, the engine performance increases and the exhaust fumes become cleaner This timeframe is determined by the age and condition of the engine, and its daily duty cycle, but the average clean up time is expected to be 4 months CONFIDENTIAL

9 Presenting: Innovative Hydrogen Solutions (IHS) 1. Company profile IHS: Founded in 2004 in Winnipeg, Manitoba, Canada Full time employees with over 100 years of Combustion Enhancement Technology experience 2005 Independent testing and validation of technology by Wardrop Engineering 2006 Commenced 2 year Reliability Test with Manitoba Hydro 2008/2009 moving from Laboratory phase to Commercialization 2010/2011 start of installations in Commercial Vehicles 2010 Province of Ontario recognizes Hydrogen Fuel Injection as a Dedicated Alternative Fuel Source and approves I.H.S. Technology as the only Hydrogen Fuel Injection in North America to meet its Green Commercial Vehicle Programs Criteria for Provincial Grant 2010 completed SAE –J1321 Type 2 Weighted Fuel Test at Auburn University CONFIDENTIAL

10 Hydrogen System - Field Experience of IHS 1. Independent testing to date: Wardrop Engineering Clean Air Technology Inc Carbon plan verification ISO Part 2 by Mech and Associates Green Print Assessment completed by Jomini Environmental SAE-J-1321 Type 2 Fuel Testing at Auburn University successfully completed FP Innovations presently conducting SAE-J-1321 Type 2 Fuel Testing and EPA Certification in Montreal /2011 fleet installations: 3. Test programs currently being set up with Transit Systems in Southern Ontario Calais Columbia and Manila in the Philippines 4. Stewardship Ontario is conducting Field Trials with two Ontario Municipalities on Their Blue Box Recycled Trucks. Stewardship Ontario has accepted I.H.S. as a Priority Prospect for CONFIDENTIAL

11 Hydrogen System - Response of Engine Manufacturers Neither approves nor disapproves CONFIDENTIAL

Miles Ahead.