Presentation Air Car Factories

1 Creation of the company Air Car Factories S.A.
Summary
1.1 An ambitious project in accordance with market needs

2 Who are we?

2.1 Background

3 Why ecological vehicles?

3.1 History of compressed air vehicles

3.2 The beginnings of electric vehicles

4 Objectives and development of the project

4.1 Eureka Electric Cycles

4.2 Products. Creation and design of our own vehicles

for the global distribution

4.3 Country license: Master

4.4 Manufacturing license

4.5 Dealership license

5 Shares and assets of the company

6 Contact information

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1. Creation of the company Air Car
Factories S.A
1.1 An ambitious project in accor-
dance with market needs.

The aspiration of Air Car Factories S.A is to
offer non polluting vehicles in order to meet
public expectations regarding gas emissions
and environment.

We are creating a business on a global scale
in order to provide the market with environ-
mentally friendly vehicles. Our activities are
aimed to positively impact both the environ-
ment, by reducing gas emissions, as well as
the economy by cutting transportation costs. With these market characteristics and a lack
The growth and the profitability of the automo- of real and available alternatives, as well as a
tive market during the past decades have decrease of the production costs because of
proven that we can not get rid of the use of new materials and technologies, we have
car. identified the automotive industry as a very
interesting business opportunity.
Moreover, it is now obvious that we have to
transform the final product in order to lower its
negative impact on the economy and the
environment. This can already be seen in the
new technologies developed by car manufac-
turers: the new standards for cars are less con-
taminating and fuel-efficiency.

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duction area, ensuring a degree of flexibility
and pragmatism in our outsourcing efforts.
This way, the company will experiment a rapid
development and a sustainable growth, for
example thanks to our franchising system,
which enables the participation of independ-
ent industrial partners without previous back-
ground in the franchising area.

2. Who are we? The philosophy of the Air Car
Factories S.A is based on collabo-
2.1. Background rating and associating with rec-
The Air Car Factories S.A is composed of a ognized partners active in various
multitalented team of 25 people working in industrial sectors
different fields such as management, market-
ing, international trade and mechanical engi-
neering.
Regarding the shares of the company, we
The company benefits from a large back- already have more than 60 partners involved
ground in the automotive industry as Mr. both in a professional as well as an emotional
Miguel Celades Rex has been working in this way. Because of the attractive nature of this
field for 9 years. During this period we had the project, new collaborators are joining us
opportunity to establish serious business rela- every day.
tionships with partners in different areas such
as communication, commerce and the auto- Another notable cornerstone of the company
motive industry. These partners support us is based on our extensive background in the
today in the expansion process of our activities. communication area. The contacts and expe-
rience in this area facilitate the communica-
The philosophy of the Air Car Factories S.A is tion with various media outlets and journalists
based on collaborating and associating with worldwide who are all very enthusiastic about
recognized partners active in various industri- the project and follow the evolution of the
al sectors. This allows us to expand our activi- project with much interest.
ties in both the technical as well as the pro-

4

promoted, but one out of five would refuse to
use their car less in exchange for better pub-
lic transport.

Although three quarters of the European citi-
zens are aware of the negative impact that
driving has on the environment, cars remain
the most popular choice of transportation for
51% of the people surveyed for the Euro
3. Why ecological vehicles? barometer survey, published July 26th.

The market of ecological vehicles is rapidly
increasing and fulfils an important demand.
The generation and storage of
Apart from these reasons this market also sat-
isfies our will of distributing products that renewable energy will be the
improve the quality of the air in our big cities. fastest growing sector in energy
The report "Going Green; Sustainable Growth
market over the next 20 years
Strategies¨ Published by Price Waterhouse
Cooper in 2008 describes an increase in the
number of consumers, governments, regula-
tors and businesses that turn to green technol- The survey further shows that using more fuel-
ogy. The motives for this change differentiate. efficient vehicles is not only seen as a means
Some are developing a greener footprint of cutting fuel bills but as the most efficient
because they believe it's the right thing to do. means of reversing the rise in carbon dioxide
But the strongest driver is economic. On the emissions from road transport. Indeed, 35% of
revenue side, a majority of technology execu- citizens said that the best way to reduce CO²
tives maintain that the growing demand for emissions would be to prohibit the sale of
green products creates significant market more polluting vehicles.
opportunities.
3.1 History of compressed air vehicles
The climate change, combined with the likely
arrival of carbon taxes, has focused attention It cannot be claimed that compressed air as
on technologies, services and business mod- an energy and locomotion vector is precisely
els that help us use energy more efficiently, recent technology. In fact at the end of the
promote the conservation of resources, 19th century the first approximations to what
reduce waste and lower emissions of green- could one day become a compressed air driv-
house gases in a way that's good for both the en vehicle already existed, through the arrival
bottom line and the planet. of the first pneumatic locomotives. Yet even
two centuries before that Dennis Papin appar-
The generation and storage of renewable ently came up with the idea of using com-
energy will be the fastest growing sector in pressed air (Royal Society London, 1687).
energy market over the next 20 years, says a
recent report from Helmut Kaiser Consultancy In 1872 the Mekarski air engine was used for
of Zurich. street transit, consisting of a single-stage
engine. It represented an extremely important
According to an E.U. opinion poll a majority of advance in terms of pneumatic engines, due
the citizens believe that the use of less pollut- to its forward thinking use of thermodynamics,
ing vehicles and public transport should be ensuring that the air was heated, by passing it

5

Porter Company of Pittsburgh sold hundreds
of these vehicles to the mining industry in the
eastern United States, due to the safety that
this method of propulsion represented for the
mining sector. Later on, in 1912 the
American's method was improved by
Europeans, adding a further expansion stage
to the engine (3 stages).

In January 1932 what appears to be the first
journalistic article ever written about a car
driven by compressed air was published.

The first hybrid diesel and compressed air
through tanks of boiling water, also increasing locomotive appeared in 1930, in Germany.
its range between fill-ups. Numerous locomo- The pressures brought to bear by the oil indus-
tives were manufactured and a number of try in the transport sector were ever greater
regular lines were even opened up (the first in and the truth of the matter is that they man-
Nantes in 1879). In 1892, Robert Hardie intro- aged to block investigation in this field. After
duced a new method of heating that at the the Second World War the term "air engine"
same time served to increase the range of the was never again used in textbooks referring to
engine. compressed air or pneumatic locomotives
and, whenever they were mentioned the arti-
cle would go on to state that these engines
were of little use or efficiency.

However, the first urban transport locomotive
was not introduced until 1898, by Hoadley
and Knight, and was based on the principle
that the longer the air is kept in the engine the
more heat it absorbs and the greater its
range. As a result they introduced a two stage
engine.
In 1979, Terry Miller decided that compressed
Charles B. Hodges will always be remem- air was the perfect medium for storing energy.
bered as the true father of the compressed air He developed Air Car One, which he built for
concept applied to cars, being the first per- $ 1,500. Terry's engines showed that it was fea-
son, not only to invent a car driven by a com- sible to manufacture a car that could run on
pressed air engine but also to have consider- compressed air. He patented his method in
able commercial success with it. The H.K. 1983 (US4370857).

6

outsold gasoline cars ten to one in the late
1890´s. Until 1899, electric cars held the land
speed record. The first speeding ticket ever

Electric cars started to become
popular because they were qui-
eter and ran more smoothly than
other cars.

3.2 The beginnings of electric vehicles was earned with an electric vehicle in 1899 for
driving at the "breakneck" speed of 20 Km/h
Between 1832 and 1839, Professor Stratingh of (12mph).
Groningen, The Netherlands, invented the first
electric carriage, powered by non-recharge-
able Primary cells. In 1838, a Scotsman
named Robert Anderson built an electric loco-
motive that attained a speed of six kilometers
an hour (4 mph.).

Electric cars started to become popular
because they were quieter and ran more
smoothly than other cars.

After improvements to storage batteries, elec-
tric cars started to flourish. However, these
were mainly in Europe. It was not until 1890
that America paid any attention to the grow-
ing technology. However, by 1910 gasoline powered cars
could be produced with a motorized assem-
bly line, which represented a big advantage
over electric cars that still had to be made by
hand. Another reason for the diminish of the
electric car was the low price and the easy
availability of fuel. The infrastructure for elec-
tricity was almost non-existent outside of city
boundaries, limiting electric cars to city-only
travel.

The 1960's and 1970's saw a need for alterna-
tive fueled vehicles to reduce the problems of
exhaust emissions from internal combustion
Today, few people realize that successful engines and to reduce the dependency on
electric automobiles were being produced as imported foreign crude oil. Many attempts to
early as the 1880's. For over 20 years, electric produce practical electric vehicles occurred
cars were commercially produced, and even during the years from 1960 to the present.

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The first step was the creation of an
4. Objectives and develop- attractive and significant brand,
essential for the representation of the
ment of the project company
on the glob-
According to the statutory company act, Air al scale.
Car Factories S.A. establishes its social objec- Relying on
tive in the following sectors: the involve-
• Research, application and distribution of ment of a
equipments related to renewable energies. designer,
• Transportation of energy. who is also
• Promotion and sales of patents from part- one of our
ners. shareholders, we have developed a corpo-
• Research and commercializing new rate image and graphical standards for the
patents in the sectors of energy and the different applications.
automotive industry. Our philosophy is to find new solutions for
• Importing, manufacturing and distributing transport and environment, providing prod-
of our vehicles as well as vehicles from our ucts that reduce gas emissions in our cities.
partners. That is why we created a second brand called
• Allocation of manufacturing license and "Eureka Electric Cycles", in order to distribute
distribution of know-how. electric scooters and electric bikes.
• Improvement of the use of different forms of
energy and existing means of transporta- 4.1 Eureka Electric Cycles
tion.
• Research and development of propulsion The brand Eureka electric Cycles is a branch
systems. of Air Car Factories S.A. Our objective is to
In order to reach our objectives, we have cre- facilitate the introduction of ecological vehi-
ated a detailed agenda of simultaneous cles to the final public. For this reason we
activities in order to decrease the time need- have developed a franchise system with an
ed for the launch of Air Car Eureka products entrance fee of 10.000€ to be paid before the
on the market. start up of the activities. The franchise has an
The activities that began when the company indefinite character and no additional
act was established are already mentioned in expenses have to be paid (no royalties).
the advancements of the company, as Eureka Electric Cycles focuses on the distribu-
explained next. tion and the technical support for electric

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scooters and electric bicycles destined for acquire an area destined to the rental of elec-
sale or rental purposes. tric bicycles. The advantage of these franchis-
Scooters and motorbikes (whether 2-stroke or es is that one will not need to set up a store,
4-stroke) give off 16 times more hydrocarbons resulting in low fixed costs. The duration of the
than cars, three times more carbon monoxide corner franchise has a minumum of three
and a significantly high quantity of other types months.
of polluting gases.
In terms of savings, electric scooters and 4.2 The products. Creation and design of
motorcycles have our own vehicles to start global distribu-
a significant com- tion.
petitive
advantage over To reach the objective of cutting logistical
conventional mod- costs while accelerating the development of
els. Charging costs the company, we decided to set up a fran-
are around EUR chising system that can easily be adapted in
0.20 to EUR 0.30, accordance to the country of implementa-
and a full charge tion.
which will give you
an average range
of between 40-50 Scooters and motorbikes
kilometers, making (whether 2-stroke or 4-stroke)
them an ideal form
give off 16 times more hydrocar-
of transport for
short journeys or bons than cars
use in towns and
cities. Average The traditional production system consists of a
daily journeys with major manufacturing plant supplying all the
a scooter or motor- distributors. This way of producing results in
bike are not usually increased transportation costs and CO2 emis-
more than 20-30 sions.
km, placing our scooters in a position of utility The expansion system of the manufacturing
that is perfectly compatible with the average plants of Air Car Factories S.A. consists of set-
requirements of most scooter and motorbike ting up assembly plants that also serve as
users. retail outlets. The assembling plants produce
For businesses with seasonal activities, for according to the demand in their geographi-
example campings, we offer the possibility to cal area.

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We have recently finalized the design of our first cars. Because the motor
functioning on compressed air is still under development we have decid-
ed to start production of our first model functioning with an electric motor
of 25 Hp, able to reach a speed of around 100 Km/h and with a minimal
range of 150 km.

10

We carried out a profound study of the market based on economical, production and sale indi-
cators. The aim of this study was to exactly define the market possibilities in every area. We
also used these indicators to determine the price of the production and dealership licenses.
This expansion system has a lot of advantages over the one mentioned before. Major differ-
ences can be noticed in the setting-up costs of the manufacturing plants and the costs
involved with future performances.
In the traditional system of production the costs involved with logistics represent 15% of the final
price of the vehicle. With the franchising system of Air Car Factories S.A the final cost of the
product will be more competitive and less CO2 will be emitted.

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rication licenses in the zones included in
4.3 The Country Master License the licensed country for a profitable price.
• One would receive between 7 and 10 per
Our production concept is based on establish- cent of the royalties contributed by the fac-
ing manufacturing plants with a size and pro- tories to the company.
duction level that is suiting to the reality of • One would be able to manage political
each zone. In those countries that, for their pacts and subventions in the licensed
size or the amount of cars sold, need more country.
than one production plant we offer a license • One would be able to have a warehouse in
for the whole country, the MASTER LICENSE. case necessary for logistics.
The master license brings with it a number of • One would be in charge of organizing all
obligations and of course also a number of marketing and communication efforts in
advantages: the licensed country.
• One would be the exclusive representative • One would be able to exploit all the periph-
for the company in the licensed country. erals included in the fabrication together
• One would be able to mediate in the sales with the production plants. For example the
of big fleets to organizations. recharging and storage systems for com-
• One would be able to sell the different fab- pressed air.

4.4 The Manufacturing
License for Geographic
Areas

The method chosen for the man-
ufacturing of our future cars,
including other possible
products of third parties com-
mercialized in exclusive right, is
based on small manufacturing
and assembling plants where
only a small part of the product is actually the product. They also have the opportunity to
produced. The other elements of the product sell licenses to dealers and distributors in their
are supplied by local manufacturers. To mini- zone. The money earned with the selling of the
mize logistic expenses the manufacturing licenses to the dealers and distributors will
plants are located close to city centers where make the initial investments profitable.
the demand is generated. The acquisition of all the materials needed is
The licenses are established by regions or nat- done through a common purchasing center.
ural area's, considering mercantile habits and Here all license holders are able to introduce
geographical and political divisions. the suppliers in their country able to give
The manufacturers rely on the license holder good service and provide to all the members
of their country for marketing, brand image of the organization. The common purchasing
and logistical efforts. The profit for the manu- center is developed to not make any profit on
facturers of the air car will come from the the sale of spare parts. The purchasing deci-
manufacturing margins, which correspond to sions will be made by consensus between all
approximately 20 % of the final sale price of the license holders.

12

The price of the license is calculated accord-
4.5 The Dealership License ing to the market characteristics in the
defined geographic area. We take into
The official dealers of the Air Car are the account the number of cars we expect to dis-
exclusive sales point for vehicles of the Air Car tribute each year in order to find the best
in their particular zone. This includes products agreement between sales forecasting and
manufactured by ourselves or products of objectives.
third parties. With the aim to start production as soon as
With a dealership license one can make a possible we are looking for brands that
profit on the sale of: already have a production line set up to asso-
• Spare parts ciate ourselves with this brand and start pro-
• Repair shops ducing the first units of our electric cars. At the
• After-sales service same time we are deciding on the com-
• Financing plans pressed air motor to be used in our vehicles.
• Insurances

OTHER ACTIVITIES OF AIR CAR FACTORIES S.A.

Our ambition to contribute to the improvement of present transportation systems impels us to
the search and investigation of new projects.
We know that very interesting alternatives exist but they have not had the sufficient resources
to be introduced to the market.
Part of our philosophy is to welcome and promote these projects that correspond with our
ideas and to introduce them to the market.

13

For the first time you are offered
the chance to join a car brand
from the first stages of its creation

5 Shares and assets of When establishing single enormous produc-
tion plants in each territory or country they
the company face a significant risk when the market quota
is decreasing, the material prices are increas-
ing or the worldwide economy is changing.
Aside from the obvious advantages in com- It is calculated that a ten percent decrease of
parison with an ordinary combustion motor results entails the disappearance of the
there are also other financial advantages in macro production plant, or will at least result
comparison with the major car producers. in significant losses.
Because we use an industrial franchising con-
cept, implicating that funding is not the In the case of Air Car Factories S.A. this
owner's, the risks concerned with economic decrease could reach 60% without causing
changes or a negative business cycle in the bankruptcy. The reason for this resistance is
world are lower compared to the risks of other the industrial franchising system: the risk on
producers. the company capital is significantly reduced,
and manufacturing plants are long-lasting,
The major car brands most of the time devel- they are able to support changes in the mar-
op their projects with the help of funds sup- ket in a better way.
plied by multinationals, this affects them in
various manners:

14

This argument, combined with a variety of
activities and the sales channel of the other
ecological vehicles, assures the financial
security of the company. It is almost impossi-
ble that Air Car Factories S.A. disappears
once the production is started.

The acquisition of shares of Air Car Factories
S.A. represents a unique opportunity: for the
first time you are offered the chance to join a
car brand from the first stages of its creation.
Our shareholders are given the opportunity to
join this extensive and ambitious forthcoming
project corresponding to the needs of both
the transportation and the energy sector.

The shares offered by Air Car Factories S.A.
are anonymous. This is done to facilitate their
functioning on the market. This also means
that the physical possession of the shares rep-
resents the ownership and the shares repre-
sent their market value. For this reason a
change of hands of the shares to third parties
must always be communicated to administra-
tion to change the registration in the register
of shareholders.

The acquisition of shares form Air Car
Factories SA offers you the opportunity to take
part in the annual meeting of shareholders
where the state of the company and our activ-
ities are explained in detail. The acquisition of
shares does not impose you responsibility
regarding the situation of the company.

15

In Italian:
www.aircarfactories.com/italiano

In Catalan:
www.aircar.cat

In Dutch:
WEBPAGES OWNED BY www.deluchtauto.com

AIR CAR FACTORIES S.A.
For different communities:
www.aircarcanarias.com (Spanish)
In Spanish: www.aircarfrance.com (French)
www.cochesdeaire.com www.aircardeutschland.com (German)
www.aircar.com.es www.aircarinusa.com (English)
www.aircarfactories.es www.aircarinuk.com (English)
www.motordeaire.net www.aircarmexico.com (Spanish)
www.motordeaire.org
www.motores-neumaticos.com

In English:
www.aircarfactories.com
www.nopollutioncars.com
www.aircarfactories.info
www.aircarfactories.biz
www.aircarfactories.net
www.aircarfactories.org
www.theaircar.es For Eureka Electric Cycles:
www.eecycles.com (spanish)
www.eurekacycles.net (Spanish)
www.motos-electricas.com (Spanish)
In French:
www.voitureaair.com

In German:
www.fahrenmitluft.com
www.dasaircar.com

In Portuguese:
www.motoraar.com

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Information about
Air Car Factories, S.A:

5.2 Company Information

Air Car Factories S.A.
CIF: A-64772650
Founded in 2008 - Initial Capital 100.000 Euros
Travessera de Gracia 15
08021 Barcelona (Spain)
Public Limited Company, constituted in public
writing by Notary Mr. Carlos Mateo and Mr.
Martínez de Bartolomé on the fifteenth of
January 2008, and inscribed in the
Commercial Register of Barcelona on
February the 28th of 2008 in volume 40.286,
document 12, page B362270, first inscription.
60 Shareholders (on the 28th of May, 2008 )

CONTACT INFORMATION:
Air Car Factories S.A., (head office) Eureka Electric Cycles (retail outlet)
rex@aircarfactories.com rex@aircarfactories.com
Travessera de Gracia 15, 6º 1ª Alfonso XII 39-41
08021 Barcelona (Spain) 08006 Barcelona (Spain)
Tel: 00 34 - 93 362 37 00 Tel: 00 34 - 93 362 00 71
Fax: 00 34 - 93 362 37 01 Fax: 00 34 - 93 200 38 77
Office hours: Opening hours:
09:00 - 14:00, 16:00 - 19:00 (GMT + 1) 09:00 - 14:00, 16:00 - 20:00 (GMT + 1)

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