Page 1 of 19 H ydrogen P ower S ystems Reducing Emissions and Fuel Expense with Oxy-Hydrogen Gas December 2008© 2008 Hydrogen Power Systems All Rights Reserved Generators for: Commercial Trucks Construction Equipment Farm Equipment Marine Engines Stationary Engines Personal Vehicles Introducing the HPS Series of fully assembled Hydrogen Enhanced Combustion (HEC) Green Technology

Page 2 of 19 H ydrogen P ower S ystems Reducing Emissions and Fuel Expense with Oxy-Hydrogen Gas December 2008© 2008 Hydrogen Power Systems All Rights Reserved Whats The Bottom Line? How Will This Product Benefit My Trucks And My Business? Four Ways: 1.Better Mileage 10% to 20% improvement (or more). 2.Lower Emissions (as mandated by new California Air Resource Board (CARB) regulations). 3.Can be reinstalled on replacement vehicles. 4.Most (if not all) of the purchase price can be recovered by taking advantage of Federal Tax Credits and State Incentives for green and hybrid fuel conversions.

Page 3 of 19 H ydrogen P ower S ystems Reducing Emissions and Fuel Expense with Oxy-Hydrogen Gas December 2008© 2008 Hydrogen Power Systems All Rights Reserved Hydrogen Fuel Cell Electric Motor Powered Vehicle Hydrogen Powered Vehicle Modified Internal Combustion Engine Hydrogen Enhanced Combustion (HEC) Unmodified Internal Combustion Engine Needs a complex tank on the car to hold compressed Hydrogen. Needs an electric motor instead of a gas or diesel engine. Feeds Hydrogen into a Fuel Cell. Fuel Cell combines Hydrogen and Oxygen to create electricity. Electricity powers the car's motor. Requires a network of Hydrogen "Gas Stations to be built across the nation to be feasible. This technology is 20 to 30 years down the road. Needs a complex tank on the car to hold compressed Hydrogen. Heavily modified gas or diesel engine to run just on Hydrogen, not gas or diesel. The exhaust is plain water. Requires a network of Hydrogen "Gas Stations to be built across the nation to be feasible. This technology is 20 to 30 years down the road. Needs a 3 gallon tank to hold water and a small amount of Electrolyte. No engine modifications needed, works on existing cars and trucks. Needs a HOD generator and 9 to 30 amps from cars battery to operate. Generates Hydrogen and Oxygen vapor that is combined with the normal air and fuel mix. This new mix burns more completely, reducing emissions and fuel expense. Must add 2 gallons of water every 1,000 miles. This technology is here today. Whats the difference between a Fuel Cell vehicle, a Hydrogen Powered vehicle and a vehicle using Hydrogen Enhanced Combustion (HEC)?

Page 4 of 19 H ydrogen P ower S ystems Reducing Emissions and Fuel Expense with Oxy-Hydrogen Gas December 2008© 2008 Hydrogen Power Systems All Rights Reserved So what will this cost me? The government wants this technology implemented, so our products are priced to take maximum advantage of existing tax credits and other Green Technology incentives. In many cases the final cost to you is zero, or close to zero. Your up front costs will range from $1,500 to $30,000 per vehicle*, depending on the size of your vehicle. This price includes: Assistance from our tax team that guarantees you will recoup the full purchase price via your earned tax credits, or a rebate from us for a portion of the purchase price not recovered. Installation by factory technicians and training for maintenance personnel, (Includes full maintenance and operator manuals). A mileage improvement guarantee of at least 10% on each installed vehicle. (Determined by a previously established base line for each vehicle). Substantial and measurable emissions reductions. (Numbers will vary based on age and condition of each vehicle) One year replacement warranty on all components and a five year pro-rated warranty on all components. * Certain products and customers may qualify for lease or lease / purchase programs.

Page 5 of 19 H ydrogen P ower S ystems Reducing Emissions and Fuel Expense with Oxy-Hydrogen Gas December 2008© 2008 Hydrogen Power Systems All Rights Reserved California Corporation based in Escondido, California. Founded by local businessmen to create local jobs. Build products generating Oxy-Hydrogen Gas. Design, test and manufacture products in Escondido using American-made components. Founder & Inventor: Richard Connors Accounting: Scott Peck – Dunlap, Dunlap & Peck Legal: Carl Skaja – Skaja, Daniels & Lister Electronic Specialist: Robert Rowley Automotive Specialist: Andrew Estrada Marketing & Public Relations: Don Darrock Industry Liaison & Marketing: Al Trevisan What (and who) Is Hydrogen Power Systems ?

Page 6 of 19 H ydrogen P ower S ystems Reducing Emissions and Fuel Expense with Oxy-Hydrogen Gas December 2008© 2008 Hydrogen Power Systems All Rights Reserved What Is Oxy-Hydrogen Gas? A combination of Hydrogen and Oxygen. Generated through Electrolysis. I Know About Oxygen, But What Exactly Is Hydrogen Gas? Simplest, most common element in the universe. 15 times lighter than air. Clear, odorless, non-toxic. Its the Hydro in Hydrocarbon, the part of gasoline and diesel we burn that powers our cars and trucks. Hydrogen bubbles Oxygen bubbles 2 atoms of H + 1 atom of O = HOH (Oxy-Hydrogen Gas) Electrolysis converts water (H 2 O) into HOH

Page 7 of 19 H ydrogen P ower S ystems Reducing Emissions and Fuel Expense with Oxy-Hydrogen Gas December 2008© 2008 Hydrogen Power Systems All Rights Reserved So How Does It Work? The Hydrogen Power Systems device contains water, metal plates and a chemical (Electrolyte). The cars battery sends electricity through the water. Electricity breaks the water down into Oxygen and Hydrogen (Oxy-Hydrogen Gas). Oxy-Hydrogen is piped to the engine, where it mixes with the fuel, causing the gasoline (or diesel) to burn faster and more completely. This improved combustion is how we reduce emissions and improve fuel economy. Image Source: Page 10-3, A Practical Guide to Free Energy Devices by Patrick J. Kelly

Page 8 of 19 H ydrogen P ower S ystems Reducing Emissions and Fuel Expense with Oxy-Hydrogen Gas December 2008© 2008 Hydrogen Power Systems All Rights Reserved So, Is Oxy-Hydrogen A Fuel? Not exactly. Because it takes just a tiny amount to make diesel or gasoline burn more completely, Oxy-Hydrogen is more accurately considered a Reactant. In Chemistry, a Reactant is a substance that participates in a chemical reaction, causing something else to happen faster. Even though Oxy-Hydrogen burns with the diesel or gasoline, its real purpose is to make the diesel or gasoline burn more completely. This improved combustion is how we reduce emissions and improve fuel economy. + Oxy-Hydrogen = Fuel (Diesel or Gasoline) Better Mileage Lower Emissions More Torque & Power

Page 9 of 19 H ydrogen P ower S ystems Reducing Emissions and Fuel Expense with Oxy-Hydrogen Gas December 2008© 2008 Hydrogen Power Systems All Rights Reserved Yes. It is safe because: It dissipates very quickly. It does not puddle on the ground like diesel or gasoline. It does not give off toxic or carcinogenic fumes. It turns back into pure water. Oxy-Hydrogen Gas is generated on demand just before it is used. It is not stored on the vehicle. Because only a few ounces are present at any given time, there is virtually Zero chance of explosion or fire… Image Source: DOT Guidelines for Use of Hydrogen Fuel in Commercial Vehicles - Final Report November 2007 Is Oxy-Hydrogen safe?

Page 10 of 19 H ydrogen P ower S ystems Reducing Emissions and Fuel Expense with Oxy-Hydrogen Gas December 2008© 2008 Hydrogen Power Systems All Rights Reserved Is This A New Discovery? No. The earliest attempt at developing a hydrogen engine was reported by Reverend W. Cecil in Cecil presented his work before the Cambridge Philosophical Society in a paper entitled On the Application of Hydrogen Gas to Produce Moving Power in Machinery. Hydrogen (and peanut oil !) were among the first fuels to power horseless buggys, but Gasoline and Diesel won out over steam, electric and hydrogen because it was plentiful and cheap, and the engines were easier to build. Amazingly, one of the first patents for a Hydro- Oxygen Generator was granted to Mr. Charles H. Fraser of Columbus Ohio in 1918 ! Since then, dozens of patents and processes have been devised revolving around this technology.

Page 11 of 19 H ydrogen P ower S ystems Reducing Emissions and Fuel Expense with Oxy-Hydrogen Gas December 2008© 2008 Hydrogen Power Systems All Rights Reserved If Oxy-Hydrogen is so great and been around for so long, why havent the car companies, oil companies and government promoted it? THAT is the question we are all asking. Some say oil companies dont want a technology that would reduce their revenues by 25% or more. Some say auto companies only innovate when forced, as evidenced by Detroits late adoption of hybrid-electric cars to compete with Honda and Toyota. Still others say big companies dont want technology they cant control. Government Is Taking Action The Feds provide tax incentives to fleets that convert to some form of hybrid, Hydrogen / Green fuel technology: an-fuel_vehicles_and_certain_refueling_property an-fuel_vehicles_and_certain_refueling_property Up to $5K tax credit for private vehicles. Up to $30K tax credit for large diesel trucks, construction equipment, etc. California and other states have programs to encourage retrofitting existing vehicles to Hydrogen / Green technology: CA/0 CA/0 The Federal Government actively promotes Hydrogen technology research:

Page 12 of 19 H ydrogen P ower S ystems Reducing Emissions and Fuel Expense with Oxy-Hydrogen Gas December 2008© 2008 Hydrogen Power Systems All Rights Reserved T hat may explain the big companies. But why arent other companies selling the Oxy-Hydrogen solution? THERE ARE, but none are big enough to advertise nationally, and virtually all do business via the internet and E-Bay. All sell kits the customer must assemble and install. We are not aware of ANY other company that provides a fully assembled, simple, dependable, integrated, warranted, bolt-on system.

Page 13 of 19 H ydrogen P ower S ystems Reducing Emissions and Fuel Expense with Oxy-Hydrogen Gas December 2008© 2008 Hydrogen Power Systems All Rights Reserved Are There Any Government Or Independent Tests That Indicate Oxy-Hydrogen Gas Works? YES. Here are a few of the better tests and studies: 2007 Purdue University: Hydrogen Assist On a John Deer 4.5 Liter Diesel Engine Department of Transportation: Guidelines for Use of Hydrogen Fuel in Commercial Vehicles technology/report/Guidelines-H2-Fuel-in-CMVs-Nov2007.pdf technology/report/Guidelines-H2-Fuel-in-CMVs-Nov2007.pdf Department of Energy: Hydrogen/CNG Blended Fuels Performance Testing in a Ford F _30percentf_noattachments.pdf 150_30percentf_noattachments.pdf Has Hydrogen Power Systems Conducted Tests On HPS Products? YES. In a November 2008 test, we demonstrated a 13.6% fuel improvement on a standard 5.2 liter fuel injected Dodge gasoline engine. In November 2008 we achieved significant emission reductions on the same 5.2 liter gasoline engine and a 6.2 liter Chevrolet diesel engine. Our tests prove our system delivers significant, measurable reductions in fuel consumption and emissions on both gasoline and diesel engines. More tests and independent certifications are in the works…

Page 14 of 19 H ydrogen P ower S ystems Reducing Emissions and Fuel Expense with Oxy-Hydrogen Gas December 2008© 2008 Hydrogen Power Systems All Rights Reserved Trucking consumes 19% of all U.S. petroleum. Industry spent $141 billion in 2008, up $27 billion from Diesel fuel is becoming the largest operating expense, surpassing labor. In 2008 Diesel fuel in California topped $5.00 per gallon. Down now, it will inevitably rise as the economy improves. Annual fuel cost increases $1,000 for each 5 cent price increase. (Source: American Transportation Research Institute) A Typical 18 Wheel Truck Will Spend $86, On Diesel Next Year* * (assumes 100,000 miles per year, $4.75 per gallon at 5.5 mpg.) Reduce diesel fuel consumption between 10 and 20% (or more). Reduce emissions. Reduce carbon build up, thus extending engine life. Boost horsepower and torque. (data & tests results for all claims on file) The Technology And Designs Used In Hydrogen Power Systems Products Have Been Proven To:

Page 15 of 19 H ydrogen P ower S ystems Reducing Emissions and Fuel Expense with Oxy-Hydrogen Gas December 2008© 2008 Hydrogen Power Systems All Rights Reserved Increasing fuel economy by just 2 miles per gallon saved more than 45%. (Results from an actual garbage truck in stop & go city operating conditions) What did fuel cost for a trash collection truck logging 20,000 miles a year, initially averaging only 2.25 Mpg. and paying $4.72 per gallon of Diesel? $41,956 What did fuel cost when that same truck increased fuel economy by just 2 Mpg? $22,212 $19,744

Page 16 of 19 H ydrogen P ower S ystems Reducing Emissions and Fuel Expense with Oxy-Hydrogen Gas December 2008© 2008 Hydrogen Power Systems All Rights Reserved Whats The Technology In The Hydrogen Power Systems Device? All components in a tamper-proof 18 x 18 x 20 (or smaller) toolbox that bolts to the vehicle. Stainless steel plates, bolts and connectors. High-temperature, transparent acrylic Plexiglas and tubing. Three electronic sensors, no pumps, no moving parts. Fewer parts, simple design means less to maintain and repair. HPS designed and manufactured gauges, electronic controls & monitoring components. Can be reinstalled from old trucks to replacement trucks.

Page 17 of 19 H ydrogen P ower S ystems Reducing Emissions and Fuel Expense with Oxy-Hydrogen Gas December 2008© 2008 Hydrogen Power Systems All Rights Reserved Is the electrolyte dangerous? Will it damage my vehicle or void my warranty? The electrolyte is distilled water and a small amount of Sodium Hydroxide. It is so dilute you can wash your hands with it. See the two bubblers? The smaller one contains common vinegar. This removes any trace of Sodium Hydroxide from the Oxy-Hydrogen gas before it is piped to the engine. Our device is an after-market product in full compliance with the Magnuson-Moss Warranty Act, so our generators will neither harm your vehicle nor void your vehicle warranty.

Page 18 of 19 H ydrogen P ower S ystems Reducing Emissions and Fuel Expense with Oxy-Hydrogen Gas December 2008© 2008 Hydrogen Power Systems All Rights Reserved Particulates are reduced 5 to 50%. CO is reduced 15 to 80%. CO 2 is reduced 10 to 80%. NO x is reduced 5 to 30%. Hydrocarbons are reduced 20 to 90%. (Data & test results on file) What About Emissions? Independent tests and reports from actual users indicate that, depending on the age and condition of a particular truck,

Page 19 of 19 H ydrogen P ower S ystems Reducing Emissions and Fuel Expense with Oxy-Hydrogen Gas December 2008© 2008 Hydrogen Power Systems All Rights Reserved For Additional Information Contact: Richard Connors Al Trevisan: Carl Skaja: Thank You For Your Interest In H ydrogen P ower S ystems Reducing Emissions and Fuel Expense with Oxy-Hydrogen Gas