Kittyhawk

2.2 MW Facility, Vista California

This Facility is in construction at the Company headquarters in Vista, California. Full commercial operation is scheduled to begin spring 2008.

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The Facility is located adjacent to the Company offices in Vista, California. The Facility is planned to process approximately 630 tons per week (only six trucks per day) of biomass to produce approximately 20 tons of mineral ash materials per week. The mineral ash materials will be comprised primarily of calcium, silicon, magnesium, phosphorus and potassium oxides.

The Company anticipates that the electricity produced at the Facility will be used to operate some of the ceramic curing ovens and other manufacturing equipment, with the surplus sold to the Utility on an "as available" basis. This allows the use of the Facility as a true "cogeneration" unit for the manufacturing of ceramics for other combustion units, at effectively one-third the cost for electricity. The Facility is designed to export to the local service (12 KV) grid approximately 1.5 MW on a continuous basis with only minor down time (95% uptime). The Kittyhawk Renewable Energy Facility is also certified under the State of California's Renewable Portfolio Standard.

The Facility is being constructed in one half of the Company's 42,000 square foot industrial location in Vista, California. The City of Vista issued a special use permit for the commercial operation of the Facility (selling electricity to SDG&E), with the manufacturing and construction of the system as an allowed use under the existing industrial zoning codes.

All fuel for the Facility is expected to come from a radius of less than 20 miles. The Company believes that approximately 60,000 tons of suitable fuel material will be available for the Facility each year in this small radius. This fuel is typically from tree trimmings and clean wood sources. Kittyhawk is not permitted to run on grass clippings. The fuel material can be delivered to the Facility as opposed to the surrounding landfills, allowing existing landfill space to be utilized for materials that are truly not recyclable, thereby extending the life of the landfills.