SOURCE: American Power Group Corporation

American Power Group Corporation

December 09, 2014 09:00 ET

American Power Group Announces Major Breakthrough With Its First EPA Intermediate Useful Life ("IUL") Approvals

28 Volvo/Mack Engine Families Include First Conversion of Selective Catalyst Reduction Engines; Provides Path to Access Larger National and Regional Fleets Operating Newer Engines

LYNNFIELD, MA--(Marketwired - Dec 9, 2014) - American Power Group Corporation (OTCQB: APGI) announced today that its subsidiary, American Power Group Inc. ("APG") has received online notification from the U.S. Environmental Protection Agency ("EPA") that its recent Clean Alternative Fuel Vehicle and Engine Conversion Submission has been approved for the following Intermediate Useful Life ("IUL") engines:

Volvo/Mack
D12, D13, E7, MP8
11.9L to 12.8L
(2012 to 2004)

The submission utilized APG's latest V5000 Dual Fuel Turbocharged Natural Gas® technology which is required to meet specific design, componentry and emission compliance criteria per the EPA Final Rule 40CFR Parts 85 and 86. These 28 IUL approvals include APG's first dual fuel conversion approval of the Selective Catalyst Reduction ("SCR") engine technology which meets or exceeds the current stringent EPA OEM certified engine emission criteria (2010 and newer). These IUL approvals are in addition to APG's industry leading 456 EPA approvals already received for Outside Useful Life ("OUL") engines covering six of the top seven OEM engine platforms for model years from 2009 to the mid 1990's.

Lyle Jensen, American Power Group Corporation's President and Chief Executive Officer stated, "The magnitude and strategic importance of this first series of IUL approvals marks another important milestone for APG and has multiple value-add implications:

"The IUL addressable market is strategically important because it allows APG access to the medium to large fleet owners who operate 300+ vehicles and keep their trucks 4-5 years. Our WheelTime partners, as well as our new natural gas supply partners, have told us obtaining IUL approval is critical to getting in front of these larger national and regional fleet operators. We estimate another 600,000 - 700,000 Class 8 trucks fall into the IUL designation. We now have a verified and repeatable process which, in conjunction with last week's capital raise, will allow us to accelerate additional IUL testing in calendar year 2015 for the remaining four to five targeted IUL OEM engine family models.

"APG's approved Volvo/Mack IUL engine models are typically utilized in trucks with "return to base" route profiles which we believe make them an ideal candidate for natural gas conversion. We have secured a list from R.L. Polk of approximately 11,000 U.S. registered Volvo/Mack owners representing over 72,000 trucks for model years between 2010 and 2013. We have several companies that have been waiting for our Volvo/Mack.

"IUL approvals and additionally will be launching an APG dual fuel awareness campaign to advise other Volvo/Mack fleet owners of our IUL approvals and the significant competitive advantage our V5000 Dual Fuel Turbocharged Natural Gas® solution provides.

"A significant environmental benefit of our dual fuel solution that was validated during our IUL testing was our ability to measurably reduce nitrous oxides ("NOx") below the current EPA national emissions standards. There is an increased interest level in technologies that reduce diesel-related NOx emissions as evidenced by our recent press release where the Texas Commission on Environmental Quality deemed APG's current 456 OUL engine families eligible for grant application under the Texas Emissions Reduction Program ("TERP"). APG will be submitting these additional 28 IUL approvals for inclusion in the TERP grant program. We believe an OEM SCR engine operating in APG's dual fuel mode produces some of the lowest NOx readings in the industry and will become eligible for additional Federal, State, and Corporate emission reduction consideration."

"Mr. Jensen concluded, "The EPA regulations restrict conversion of model years that are two years or newer unless compliance demonstration and engine certification is obtained which we believe is not economically viable. However, we recently received EPA clarification that the definition of two model years or newer for conversions will be based on the engine model year not the vehicle model year. This is extremely significant because new Class 8 vehicles typically operate with OEM certified engines that are one model year older than the chassis. Therefore, with additional planned IUL approvals in calendar 2015, we will be able to sell APG's dual fuel system to owners of 2014 tractors with IUL approved 2013 model year engines. This will provide customers the ability to install and realize our dual fuel benefits one year earlier than previously thought and improve the total cost of ownership by one year which is important for the larger fleets who keep their tractors for 4-5 years."

About American Power Group Corporation
American Power Group's alternative energy subsidiary, American Power Group, Inc., provides a cost-effective patented Turbocharged Natural Gas® conversion technology for vehicular, stationary and off-road mobile diesel engines. American Power Group's dual fuel technology is a unique non-invasive energy enhancement system that converts existing diesel engines into more efficient and environmentally friendly engines that have the flexibility to run on: (1) diesel fuel and liquefied natural gas; (2) diesel fuel and compressed natural gas; (3) diesel fuel and pipeline or well-head gas; and (4) diesel fuel and bio-methane, with the flexibility to return to 100% diesel fuel operation at any time. The proprietary technology seamlessly displaces up to 75% of the normal diesel fuel consumption with the average displacement ranging from 40% to 65%. The energized fuel balance is maintained with a proprietary read-only electronic controller system ensuring the engines operate at original equipment manufacturers' specified temperatures and pressures. Installation on a wide variety of engine models and end-market applications require no engine modifications unlike the more expensive invasive fuel-injected systems in the market. See additional information at: www.americanpowergroupinc.com.

Caution Regarding Forward-Looking Statements and Opinions
With the exception of the historical information contained in this release, the matters described herein contain forward-looking statements and opinions, including, but not limited to, statements relating to new markets, development and introduction of new products, and financial and operating projections. These forward-looking statements and opinions are neither promises nor guarantees, but involve risk and uncertainties that may individually or mutually impact the matters herein, and cause actual results, events and performance to differ materially from such forward-looking statements and opinions. These risk factors include, but are not limited to, the fact that our dual fuel conversion business has lost money in the last five consecutive fiscal years, the risk that we may require additional financing to grow our business, the fact that we rely on third parties to manufacture, distribute and install our products, we may encounter difficulties or delays in developing or introducing new products and keeping them on the market, we may encounter lack of product demand and market acceptance for current and future products, we may encounter adverse events economic conditions, we operate in a competitive market and may experience pricing and other competitive pressures, we are dependent on governmental regulations with respect to emissions, including whether EPA approval will be obtained for future products and additional applications, the risk that we may not be able to protect our intellectual property rights, factors affecting the Company's future income, the fact that our stock is thinly traded and our stock price may be volatile, the fact that we have preferred stock outstanding with substantial preferences over our common stock, the fact that the conversion of the preferred stock and the exercise of stock options and warrants will cause dilution to our shareholders, the fact that we incur substantial costs to operate as a public reporting company and other factors that are detailed from time to time in the Company's SEC reports, including the report on Form 10-K for the year ended September 30, 2013 and the Company's quarterly reports on Form 10-Q. Readers are cautioned not to place undue reliance on these forward-looking statements and opinions, which speak only as of the date hereof. The Company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements and opinions that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Contact Information

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