Hydrogen Installation System For Transit Buses CONFIDENTIAL PRESENTATION August 2011

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INDEX:

1. Operating principles and basic set up in the bus2. Benefits3. Safety4. Maintenance requirements5. Bus testing - before and after6. Presenting Innovative Hydrogen Solutions7. Field experience of IHS8. Response of Engine manufacturers9. Proposed Test Plan

CONFIDENTIAL

Hydrogen System Presentation - Index

*Hydrogen System Operating Principles

Combustion Enhancement Principle:

Electrolysis cell produces Hydrogen and Oxygen gases from waterOutput is constant providing the engine is in operationThese gases are added to the existing air intake manifold of the engineBoth gases enhance the combustion process throughfaster flame spread leads to a more complete burn of all the fuelcleaner combustion process results in less soot productionincreased engine power due to force of hydrogen combustionEngine will be cleaned over time from carbon depositsReduction of most Carbon and NOX emissions in exhaust fumes

*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 reservoirInstallation takes place in existing engine set upElectronic controls are limited given the simplicity of the system

*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 fuelLess 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 processReduced contamination of engine oilsReduced soot in the exhaust fumesReduced EGR Replacement Reduced DPF Replacement and MaintenanceRegeneration 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

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*Hydrogen System - Safety

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 mixtureFire testing completed by Wardop Engineering

2. Hydrogen:is 14 times lighter than air and dissipates fastburns 9 times quicker than gasoline, propane or methaneis 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 gassesFluid level sensor will shut down the unit, if water is lowPressure check valve in unit will vent if 5 lbs. pressure builds upSystem is independently fused to protect the bus from any possible failureAll electrical components are contained in a safety-rated box

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*Hydrogen System - Maintenance Requirements

1. Replenishment of the waterUsage of water is 47 ml. per hour of operation of the unitStorage volume for Distilled water to be sized to monthly maintenance cycles

2. Electrolytic platesDo not require maintenance; life expectancy to be 10 years/ operating hours

3. Validation of the unitWeekly visual inspection of all componentsValidation of the operation of the unit completed by Wardrop Engineering and Clean Air Technologies Inc.

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*Hydrogen System - Bus Testing: Before and After

1. Bus is to be tested during its actual in-service operationbench or dynamometer is not representative of the duty cycle changesrelative large variation in the field between duty cycles in different cities, results in varying levels of benefitsengine 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. exhaustNo Bus Fuel measuring required as residual fuel in exhaust is measuredMeasuring takes place during a standard test at idle and takes a total of 1 hr

3. Improvements over timeAs the carbon deposits in the engine are being burned off, the engine performance increases and the exhaust fumes become cleanerThis 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

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*Presenting: Innovative Hydrogen Solutions (IHS)

1. Company profile IHS:Founded in 2004 in Winnipeg, Manitoba, CanadaFull time employees with over 100 years of Combustion Enhancement Technology experience2005 Independent testing and validation of technology by Wardrop Engineering2006 Commenced 2 year Reliability Test with Manitoba Hydro 2008/2009 moving from Laboratory phase to Commercialization2010/2011 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

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Hydrogen System - Field Experience of IHS

1. Independent testing to date:Wardrop EngineeringClean Air Technology IncCarbon plan verification ISO-14064 Part 2 by Mech and AssociatesGreen Print Assessment completed by Jomini EnvironmentalSAE-J-1321 Type 2 Fuel Testing at Auburn University successfully completedFP Innovations presently conducting SAE-J-1321 Type 2 Fuel Testing and EPA Certification in Montreal

2. 2009/2011 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 2012.

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*Hydrogen System - Response of Engine Manufacturers

Neither approves nor disapproves

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Miles Ahead.

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