The H2 NGen

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The H2 N-Gen
P r e s e n t s

• Lets Clear The Air

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Presentation Overview

• Hydrogen Overview
• Environmental Industry Trends
• I.H.S. Product and Company Overview

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Hydrogen Overview
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Hydrogen The Ultimate Fuel Source

• Hydrogen is the fuel of the future
• The large automotive OEMs have mandated hydrogen
  research as a primary corporate objective
• Ballard Power systems, Stuart Energy, PowerNova
  are examples of high profile companies that are
  currently working on Hydrogen fuel applications

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Hydrogen The Ultimate Fuel Source

• Moving from carbon-based fuel supplies to a much
  cleaner hydrogen-based alternatives
• Companies are working on pure hydrogen
  applications i.e. Fuel Cell Technology Hydried
  tanks
• Will not be market ready in a cost effective
  manner for another 20 years
• Today we need a hybrid solution that bridges
  todays problems with tomorrows solutions

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Benefits Of Fractional Amounts Of Hydrogen

• Introducing fractional amounts of hydrogen to
  gaseous or liquid hydrocarbon fuels enhances
  combustion characteristics
• The lean flammability limit of the carbon-based
  fuel is significantly extended achieving greater
  thermo efficiency and a more complete burn
• This results in decreased emissions and increased
  fuel mileage
• There have been many independent tests that have
  shown the same results

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Environmental And Industrial Trends
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Environmental Initiatives

• Kyoto Accord mandates member countries to
  reduce Greenhouse Gas (GHG) output to 6 below
  1990 levels during the years 2008-2012
• This objective results in an effective 25
  decrease in GHG output over forecasted levels
• Incentive and deterrent programs are being
  developed by member countries
• Kyoto has followed EPA CARB initiatives by
  developing a credit system to reward pollution
  reducing technologies
• These credits are called Carbon Credits

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Greenhouse Gas Emissions
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Impact on the Industry

• Strict environmental legislation hurts heavy
  polluters
• Transport industry, specifically the Heavy Goods
  Vehicle Market (HGV) are responsible for 20 of
  global GHG output
• Roadside checks will result in fines and downtime
  unless acceptable emission levels are met

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Impact on the Industry

• Decreased Profitability for the HGV industry
• Escalating fuel prices (account for 10-20 of
  trucking companys total expenses)
• Newer vehicles meeting the emission regulations
  are higher priced and less efficient
• Low US Dollar reduces margins for Canadian
  companies with US contracts
• Low net profit of only 4.5 BEFORE these recent
  changes

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Window of Opportunity

• The HGV industry needs
• Lower emissions
• Increased fuel efficiency
• Higher profitability
• This is an opportunity for companies that can
  provide a product that solves these problems

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The question has been how to deliver the
hydrogen safely efficiently
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I.H.SProduct And Company Overview
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The H2 N-GenTM

• Hydrogen introduced into the combustion chamber
• Efficiency of the fuel burning engine process is
  improved
• H2 N-GenTM is an aftermarket retrofit device that
  is designed to work on any internal combustion
  engine
• First developed for the HGV market
• Operates on demand only when the engine is
  running

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The H2 N-GenTM

• The technology uses electrolysis to separate
  hydrogen and oxygen gases from water

H2O (Water)
Electrolysis

• Theses gases travel through a delivery hose to
  the air intake of the vehicle where the gases are
  mixed in with the air mixture prior to combustion

H2 and O2 (Hydrogen and Oxygen)
Combustion
H2O (Water)
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H2 N-GenTM - Benefits

• Lower Emissions (CO, CO2, HC, Opacity gt50
  NOXgt20)
• Reduces Fuel Consumption (10-40)
• Higher Horsepower and Torque (8-10)
• Longer Engine Life

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H2 N-GenTM - Benefits

• Reduced Maintenance Costs (less frequent oil
  filter changes)
• Easy retrofit to any internal combustion engine
• 100 ROI estimated within 6-12 months for
  long-haul vehicles

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H2 N-GenTM - Safety

• Safe technology by eliminating the need for
  on-board hydrogen storage
• Oil pressure sensor assures gases are only
  produced when engine running
• Solenoid activates upon unit shutdown to vent any
  remaining hydrogen and oxygen

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H2 N-GenTM - Safety

• Normal operating pressure lt 1PSI
• Mechanical rupture disc deactivates unit if
  pressure exceeds 20PSI
• Less than 1 of hydrogen gases by volume
  introduced into air intake
• Hydrogen never under significant pressure at any
  time
• Hydrogen never stored

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Innovative Hydrogen Solutions Inc.

• Canadian federally incorporated in 2004
• Canadian, US and PCT patents pending for H2
  N-GenTM
• Headquarters in Winnipeg, MB
• RD and administration on site
• 10 fulltime employees with over 70 years combined
  experience working on this technology

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Innovative Hydrogen Solutions Inc.

• To date solely operated as RD company
• Developing the H2 N-GenTM for the HGV market
• Wardrop Engineering awards Proof of Concept
  September 9, 2005
• Expected to have H2 N-GenTM market ready by March
  2006

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Quantification, Verification, Certification

• Major focus to
• Validate test data
• Government acceptance
• Financial support
• Qualify for Green Credits
• Quantification Clean Air Technologies, an EPA
  certified organization is coordinating the
  on-site emissions testing
• Verification Bodycote (formally Ortec).
• Certification Environmental Technology
  Verification Board (ETV)

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Green Credits

• IHS is formulating with Canadian government a
  system for trading Green Credits
• Alternative sources for sale of Credits have been
  identified
• Traded on Chicago Mercantile Exchange or European
  Climate Exchange
• Predicted to generate Green Credit revenue of
  up to 7,500 per HGV/year

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Other Markets

• Locomotive
• Gen-Set
• Automotive consumers
• Marine
• Mining
• Only slight design modifications needed

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Market Strategy

• Identify Truck Dealerships and Repair Centres as
  distribution channels
• Conference of the Parties to the Climate Change
  Convention COP 11 as platform for mass exposure
• Field Studies

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Strategic Alliances

• Wardrop Engineering Product Development
• Clean Air Technologies Emission Testing
  Consultants
• ETV Canada Certification Entity
• Y2Marketing Marketing Consultants
• Aikins, MacAuley, Corporate
  Law Firm
• Thorvaldson
• Ade Company Patent Law Firm
• Bell Green Accounting Firm

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Future Direction

• Focus on market launch in early 2006
• Continuous improvement
• License or Joint Venture with OEMs and
  aftermarket levels
• Pursue HGV markets outside Canada/USA
• IPO once all short-medium milestones are achieved

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Summary Of Todays Presentation

• Hydrogen Overview
• Environmental Industrial Trends
• I.H.S. Product Company Overview

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Thank You