October 22, 2009 08:15 ET

STWA CEO Issues Shareholder Update Letter

SANTA BARBARA, CA--(Marketwire - October 22, 2009) - Save The World Air, Inc. (OTCBB: ZERO) issued the following letter to its shareholders:

TO OUR SHAREHOLDERS:

Save The World Air, Inc. (OTCBB: ZERO) is an innovative pioneer in the clean technology industry focused on energy efficiency and air quality issues. Our ELEKTRA™ technology has delivered repeatable and measurable results that reduce the viscosity of crude oil and has shown improvement in energy efficiency for a diesel engine. Our MAGChargr™ line of products has received its California Air Resource Board (CARB) EO number and has shown improvements in air quality and power in several classes of internal combustion engines.

As Chairman, CEO and an investor in STWA it is appropriate at this time to provide a broad-strokes overview in response to various inquiries from shareholders and media alike as to where we are here at STWA and where we are going in the immediate and near future:

1. Where is STWA headed at this time, and where are your efforts focused?

As is readily apparent from the current state of public awareness, people everywhere are focused on energy efficiency and "Green Technology." STWA is uniquely positioned at this time to have unprecedented opportunities and support from the public sector, in addition to serious inquiries from business and industry alike. Our technology is being demonstrated and optimized at this time to quickly and easily provide immediate benefits for an attractive ROI, to enable industry to operate more efficiently and realize environmental benefits. Due to our international patents on some of our technologies and our position with Temple University we can do this in any country in the world with a very attractive economic model and easily implemented, reliable solutions.

Last year, the State of California unanimously approved legislation that will require the retrofitting of more than 230,000 diesel rigs beginning in 2011. The Air Resources Board stated that the health benefits outweigh the potential financial implications for trucking company owners and operators. Air Resource Board Chairman Mary Nichols said, "This regulation will save more than 9,000 lives and reduce the toxic emissions that cause cancer and birth defects. According to the State, the regulation is expected to cost trucking companies and independent operators approximately $5.5 billion. California will offer about $1 billion in subsidies, but those subsidies will come with conditions and restrictions."

We believe that our company's products will be in great demand to address these current and pressing issues, as we provide economically competitive, viable solutions for trucking companies to comply with these new legislative mandates. We are developing solutions based on our ELEKTRA™ technology to solve this $5 billion problem. The company is in discussions with potential partners that assist us as we look to deliver our solution to the market.

2. What are the company's core products?

STWA has 3 main product lines. Our first product, Applied Oil Technology or "AOT" for short, is a licensable technology which reduces the operating costs of crude oil and heavy fluid transport. Our second product, ELEKTRA™, is a device which increases fuel economy and reduces emissions in diesel engines. The third product, MAGChargr™, is a device designed to enable your engine to burn its fuel more completely and cleanly. Each of our products is designed to supplement the efforts in bridging the gap from today's realities to tomorrow's sustainability.

3. What has STWA accomplished recently?

Our company has been intensively engaged in extensive research and development of our core technologies as applied to the ELEKTRA™ and AOT product suites in order to have repeatable, consistent, scientifically proven results in controlled laboratory conditions. We have recently developed for the first time an engineering video, which will help demonstrate our technology, enhancing the existing knowledge base, bringing greater alignment and union to strategic relationships.

4. What is the current status with strategic partnerships and alliances?

The Company engaged an East Coast based business-consulting firm to assist with marketing services connected with its ELEKTRA™-based technology as it applies to tractor-trailer truck and other heavy diesel truck operators.

The firm will arrange presentations, set up meetings and assist in executing deals for STWA with potential customers who operate large fleets of diesel trucks. The Agreement initially targets 5 accounts that represent over 41,000 trucks. In addition, it covers one of North America's largest employee unions, with nearly 1,900 affiliates and 1.4 million members throughout the U.S., Canada and Puerto Rico. To that end, they will work to introduce the product to the Union's independent trucking operators to support the implementation and purchase of STWA's Products.

We have had discussions and entered into a mutual non-disclosure agreement with Melton Mowbray, Leicestershire based Pera Innovation Limited, one of Europe's leading innovation and business support organizations with a presence in eight European countries. We have also entered into a similar agreement with one of the largest oil companies in the world. As we move forward we will look to pursue these relationships to the benefit of our company and its shareholders.

5. With regard to STWA's work with Dr. Ronjia Tao, Doug Bell and Dr. Luke Turgeon, have there been any recent developments?

Absolutely, over the past few months, we have been designing, calculating, testing and optimizing our ELEKTRA™ technology as applied to crude oil and diesel fuel, and have been gathering crucially important data. With this data, we are able to isolate certain design characteristics and sensitive variables, in order to more accurately adjust them for various types of fuel, temperatures, flow-rates and presence of contaminants. This is an extremely delicate, labor- and capital-intensive process and takes time. Our systems for evaluation and data collection, however, are demonstrating our technology successfully and repeatedly, and will be the basis for our value propositions throughout the foreseeable future. This is a critically important step, and it is going in the right direction steadily. In a recent press release, Dr. Rongjia Tao commented, "In a series of recent side by side comparisons, we ran crude oil through an apparatus that applied the electric field to half of the flow of crude oil, but left the other half of the flow unaffected. We captured six test runs on video. We found that in this series of six test runs that the flow with the electric field applied ran up to 30% faster than the flow without the electric field." These results are repeatable and material. This we feel is a very significant development that is starting to stimulate activity from some key national and multinational players.

6. STWA appears to be surviving despite the severe recession in the USA. How is STWA positioning itself to succeed in the face of this macroeconomic turmoil?

As the saying goes, "When the going gets tough, the tough get tougher," and that is precisely what we have been doing. We have dropped our burn rate dramatically, consolidated our efforts, and have become a much leaner, more focused company. We have been focused on our technology and its applications, and quietly building a solid internal corporate architecture, systems and controls to remain lean and incredibly efficient as a corporate entity.

As another saying goes, "There is a silver lining to every cloud," and that surely holds true for us as well. When situations get critical, people pay attention to things that they otherwise have let slide in easy times. Especially in this recession, it becomes glaringly obvious to everyone that in order to be competitive as a corporate entity, each and every facet of the business is to be optimized to run as leanly as possible. Our technology is designed to do just that. We are racing as fast as possible to provide easily implementable, permanent solutions to enable everyone to benefit from reducing their fuel costs.

7. Is STWA seeking additional capital at this time?

Yes. Since Spring 2009, we have salvaged third-party fundraising efforts, and have successfully closed on $467,500, which were the monies that carried the company month by month to our current position which overlaps on our current fundraising efforts of an additional half-million. Our senior raise efforts' focuses have changed in the past few months as our position has become stronger with our recent successes, coupled with the increase in attention and demand for clean technology investments.

8. How is STWA intending to address and service the potential need for its products and services?

Given the current and future macroeconomic landscape, in addition to governmental legislation on the table and/or in the pipeline for future release, we stand to have demand for our technology exceed our available resources. Despite our lean burn rate and efficient internal architectural efforts and achievements, we will invariably hit a point of explosive growth and need to expand rapidly. Our most efficient and effective means by which to generate revenue with our technology is through licensing fees of our Applied Oil Technology, as it is revenue without significant PP&E capital expenditures, inventory and all of the traditional brick and mortar risks. Hence, our fervent efforts have been in the laboratory, validating our technology with repeatable and consistent data collection, generating a solid value proposition and strong economic business case.

We here at STWA are extremely optimistic about our future and opportunities. For the first time in our ten-year corporate history, there is public outcry and demand for products such as ours in both developed and developing nations, and we are positioning ourselves to fill that demand.

Thank you for your ongoing support of STWA and our team.

Sincerely,

Cecil Bond Kyte

Chairman and CEO.