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<SEC-DOCUMENT>0000950148-06-000104.txt : 20060901
<SEC-HEADER>0000950148-06-000104.hdr.sgml : 20060901
<ACCEPTANCE-DATETIME>20060901172539
ACCESSION NUMBER:		0000950148-06-000104
CONFORMED SUBMISSION TYPE:	S-8
PUBLIC DOCUMENT COUNT:		5
FILED AS OF DATE:		20060901
DATE AS OF CHANGE:		20060901
EFFECTIVENESS DATE:		20060901

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SAVE THE WORLD AIR INC
		CENTRAL INDEX KEY:			0001103795
		STANDARD INDUSTRIAL CLASSIFICATION:	WHOLESALE-HARDWARE & PLUMBING & HEATING EQUIPMENT & SUPPLIES [5070]
		IRS NUMBER:				522088326
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		S-8
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-137094
		FILM NUMBER:		061072311

	BUSINESS ADDRESS:	
		STREET 1:		5125 LANKERSHIM BOULEVARD
		CITY:			NORTH HOLLYWOOD
		STATE:			CA
		ZIP:			91601
		BUSINESS PHONE:		818-487-8000

	MAIL ADDRESS:	
		STREET 1:		5125 LANKERSHIM BOULEVARD
		CITY:			NORTH HOLLYWOOD
		STATE:			CA
		ZIP:			91601
</SEC-HEADER>
<DOCUMENT>
<TYPE>S-8
<SEQUENCE>1
<FILENAME>v23407sv8.htm
<DESCRIPTION>FORM S-8
<TEXT>
<HTML>
<HEAD>
<TITLE>sv8</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Registration No.&nbsp;333-</B><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</DIV>


<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt ; margin-top: 3pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>




<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM S-8</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>REGISTRATION STATEMENT<BR>
Under<BR>
THE SECURITIES ACT OF 1933</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></B>
</DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>Save the World Air, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt"><B>(Exact name of registrant as specified in its charter)</B></DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>Nevada</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>52-2088326</B></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><I>(State or Other Jurisdiction of</I>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><I>(I.R.S. Employer</I></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><I>Incorporation or Organization)</I>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><I>Identification No.)</I></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>5125 Lankershim Boulevard<BR>
North Hollywood, California 91601<BR>
(818)&nbsp;487-8000</B><BR>
<I>(Address and Telephone Number of Principal Executive Offices and Principal Place of Business)</I></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Save the World Air, Inc.<BR>
2004 Stock Option Plan<BR>
(Full title of the plan)</B></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Eugene E. Eichler<BR>
Chief Executive Officer<BR>
5125 Lankershim Boulevard<BR>
North Hollywood, California 91601<BR>
(818)&nbsp;487-8000</B><BR>
<I>(Name, Address and Telephone Number of Agent For Service)</I></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B><I>Copy to:</I></B></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Lance Jon Kimmel, Esq.<BR>
SEC Law Firm<BR>
11693 San Vicente Boulevard, Suite&nbsp;357<BR>
Los Angeles, California 90049<BR>
(310)&nbsp;557-3059</B></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">CALCULATION OF REGISTRATION FEE</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="54%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>

    <TD width="1%">&nbsp;</TD>
</TR><TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="19" style="border-bottom: 3px double #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD nowrap align="center"><B>Title of</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Amount</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Proposed Maximum</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Proposed Maximum</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD nowrap align="center"><B>Securities to be</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>to be</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Offering Price</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Aggregate Offering</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amount of</B></TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD nowrap align="center"><B>Registered</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Registered</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Per Share</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Price</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Registration Fee</B></TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD width="1%" style="border-top: 1px solid #000000">&nbsp;</TD>
                    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">Common Stock,
$0.001 par value
</DIV></TD>
    <TD style="border-right: 2px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="left" valign="top" style="border-top: 1px solid #000000">7,000,000
shares
</TD>
    <TD style="border-right: 2px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="right" valign="top" style="border-top: 1px solid #000000">$</TD>
    <TD align="right" valign="top" style="border-top: 1px solid #000000">1.505</TD>
    <TD nowrap valign="top" style="border-top: 1px solid #000000">(1)</TD>
    <TD style="border-right: 2px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">$10,535,000 (1)
</TD>
    <TD style="border-right: 2px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="right" valign="top" style="border-top: 1px solid #000000">$</TD>

<TD align="right" valign="top" style="border-top: 1px solid #000000">1,127.24</TD>
    <TD nowrap valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD width="1%" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="19" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Estimated pursuant to Rule 457(c) and (h)&nbsp;under the Securities Act
of 1933, as amended, solely for the purpose of calculating the
registration and represents the average of the high and low prices
of the common stock on August&nbsp;30, 2006, as reported on the OTC
Bulletin Board.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, pursuant to Rule 416(a) under the Securities Act of 1933, this Registration
Statement also covers an indeterminate amount of additional shares of Common Stock that may be
offered or sold pursuant to the employee benefit plan described herein as a result of stock splits
or stock dividends.
</DIV>


<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>






<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PART I</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The document or documents containing the information specified in Part&nbsp;I are not required
to be filed with the Securities and Exchange Commission as part of this Form S-8 Registration
Statement.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>REOFFER PROSPECTUS<BR>
7,000,000 Shares of Common Stock</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>SAVE THE WORLD AIR, INC</B>.

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The shares of Common Stock of Save the World Air, Inc. covered by this Reoffer Prospectus (the
&#147;Shares&#148;) may be offered and sold to the public by selling shareholders of the Company named in
this Reoffer Prospectus (the &#147;Selling Shareholders&#148;). The Selling Shareholders may acquire the
Shares pursuant to the Save the World Air, Inc. 2004 Stock Option Plan (the &#147;Plan&#148;).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Selling Shareholders may be deemed to be affiliates of the Company and, as such, would be
subject to limitations on their ability to sell the Shares outside of this Reoffer Prospectus
pursuant to Rule&nbsp;144 promulgated under the Securities Act of 1933, as amended (the &#147;Act&#148;). This
Reoffer Prospectus has been prepared to allow for future sales by the Selling Shareholders to the
public without limitation.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Common Stock is quoted on the OTC Bulletin Board under the symbol &#147;ZERO.&#148; On August&nbsp;30,
2006, the closing price of one share of out Common Stock on the OTC Bulletin Board was $1.49.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Selling Shareholders may sell their Shares directly or indirectly in one or more
transactions on the OTC Bulletin Board or on any stock exchange or market on which the Shares may
be listed at the time of sale, in privately negotiated transaction, or through a combination of
such methods. These may be at fixed prices (which may be changed), at market prices prevailing at
the time of sale, at prices related to such prevailing market prices or at negotiated prices.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Selling Shareholders may sell Shares through one or more agents, brokers or dealers or
directly to purchasers in the manner described under &#147;Plan of Distribution.&#148;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company will not receive any proceeds from the sale of Shares by the Selling Shareholders.
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Investing in our Common Stock involves significant risks. See &#147;Risk Factors&#148; beginning on
page&nbsp;2.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Securities and Exchange Commission and state securities commissions have not approved or
disapproved these securities or determined if this Reoffer Prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">The date of this Reoffer Prospectus is <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2006.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<!-- TOC -->
</DIV>
<DIV align="left">
<A name="tocpage"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>TABLE OF CONTENTS</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Page</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#101">Where You Can Find More Information</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#102">Incorporation of Certain Documents by Reference</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#103">Forward Looking Statements</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#104">Risk Factors</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#105">The Company</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#106">Use of Proceeds</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#107">Selling Shareholders</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#108">Plan of Distribution</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#109">Legal Matters</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#110">Experts</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#111">Disclosure of Commission Position on Indemnification for Securities Act Liabilities</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="v23407exv4w2.htm">EXHIBIT 4.2</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="v23407exv4w3.htm">EXHIBIT 4.3</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="v23407exv5.htm">EXHIBIT 5</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="v23407exv23.htm">EXHIBIT 23</A></FONT></TD></TR>
</TABLE>
</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You should rely only on the information contained in this Reoffer Prospectus or any
supplement. We have not authorized anyone to provide you with information different from that
which is contained in or incorporated by reference in this Reoffer Prospectus. The Selling
Shareholders are offering to sell Shares and seeking offers to buy Shares only in jurisdictions
where offers and sales are permitted. The information contained in this Reoffer Prospectus is
accurate only as of the date of this Reoffer Prospectus, regardless of the time of delivery of this
Reoffer Prospectus or of any sale of the Shares.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->(i)<!-- /Folio -->
</DIV>

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<DIV align="left">
<A name="101"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>WHERE YOU CAN FIND MORE INFORMATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have filed with the Securities and Exchange Commission (the &#147;SEC&#148;) a registration statement
on Form S-8 under the Act with respect to the Shares offered hereby (the &#147;Registration Statement&#148;).
This Reoffer Prospectus does not contain all of the information set forth in the Registration
Statement and the exhibits thereto. For further information with respect to the Company and the
Shares, reference is made to the Registration Statement and the exhibits thereto.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are subject to the requirements of the Securities Exchange Act of 1934, as amended (the
&#147;Exchange Act&#148;), and, in accordance therewith, file reports and other information with the
Commission. We file annual, quarterly and current reports, proxy statements and other information
with the SEC. Our SEC filings are available to the public over the Internet at the SEC&#146;s website at
www.sec.gov. The SEC&#146;s website contains reports, proxy statements and other information regarding
issuers, such as the Company, that file electronically with the SEC. You may also read and copy any
document we file with the SEC at the SEC&#146;s Public Reference Room at 100 F Street, N.E., Washington,
D.C. 20549. You may also obtain copies of the documents at prescribed rates by writing to the SEC&#146;s
Public Reference Section at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the operation of its Public Reference Room.
</DIV>

<DIV align="left">
<A name="102"></A>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following documents filed with the SEC by the Company are hereby incorporated herein by
reference:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Company&#146;s Annual Report on Form 10-KSB for the fiscal year ended December&nbsp;31, 2005
(Commission File No.&nbsp;000-29185).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The Company&#146;s Quarterly Report on Form 10-Q for the quarterly period ended March&nbsp;31,
2006 (Commission File No.&nbsp;000-29185).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. The Company&#146;s Quarterly Report on Form 10-QSB for the quarterly period ended June&nbsp;30, 2006
(Commission File No.&nbsp;000-29185).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The description of the Company&#146;s Common Stock contained in the Company&#146;s Registration
Statement on Form 10-SB/A (Commission File No.&nbsp;001-29185) filed with the Securities and Exchange
Commission on November&nbsp;29, 2000, and any amendments or reports filed to update the description.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All documents subsequently filed by the Company pursuant to Sections&nbsp;13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of filing of this Registration Statement and prior to such
time as the Company files a post-effective amendment to this Registration Statement which indicates
that all securities offered hereby have been sold or which deregisters all securities then
remaining unsold shall be deemed to be incorporated by reference in this Registration Statement and
to be a part hereof from the date of filing of such documents.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company will provide without charge to any person to whom this Reoffer Prospectus is
delivered, on written or oral request, a copy of each document incorporated by reference in this
Reoffer Prospectus or in the Registration Statement. Requests should be directed to Eugene E.
Eichler, Chief Executive Officer and Chief Financial Officer, Save the World Air, Inc., 5125
Lankershim Boulevard, North Hollywood, California 91604. The Company&#146;s telephone number is (818)
487-8000 and its website is located at <U>www.savetheworldair.com.</U> Information on the website
is not incorporated by reference into this Reoffer Prospectus.
</DIV>


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<DIV align="left">
<A name="103"></A>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>FORWARD-LOOKING STATEMENTS</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Private Securities Litigation Reform Act of 1995 provides a &#147;safe harbor&#148; for
forward-looking statements. This document contains forward-looking statements, which reflect the
views of our management with respect to future events and financial performance. These
forward-looking statements are subject to a number of uncertainties and other factors that could
cause actual results to differ materially from such statements. Forward-looking statements are
identified by words such as &#147;anticipates,&#148; &#147;believes,&#148; &#147;estimates,&#148; &#147;expects,&#148; &#147;intends,&#148; &#147;plans,&#148;
&#147;projects,&#148; &#147;targets&#148; and similar expressions. Readers are cautioned not to place undue reliance on
these forward-looking statements, which are based on the information available to management at
this time and which speak only as of this date. We undertake no obligation to update or revise any
forward-looking statements, whether as a result of new information, future events or otherwise. For
a discussion of some of the factors that may cause actual results to differ materially from those
suggested by the forward-looking statements, please read carefully the information under &#147;Risk
Factors&#148; beginning on page&nbsp;2.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The identification in this document of factors that may affect future performance and the
accuracy of forward-looking statements is meant to be illustrative and by no means exhaustive. All
forward-looking statements should be evaluated with the understanding of their inherent
uncertainty. You may rely only on the information contained in this prospectus.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have not authorized anyone to provide information different from that contained in this
prospectus. Neither the delivery of this prospectus nor the sale of common stock means that
information contained in this prospectus is correct after the date of this prospectus. This
prospectus is not an offer to sell or solicitation of an offer to buy these securities in any
circumstances under which the offer or solicitation is unlawful.
</DIV>

<DIV align="left">
<A name="104"></A>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>RISK FACTORS</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Investing in our common stock involves a high degree of risk, and you should be able to bear
the complete loss of your investment. You should carefully consider the risks described below, the
other information in this Reoffer Prospectus, the documents incorporated by reference herein and
the risk factors discussed in our other filings with the Securities and Exchange Commission,
including our Annual Reported on Form 10-KSB for the year ended December&nbsp;31, 2005, when evaluating
our company and our business. The risks and uncertainties described below are not the only ones we
face. Additional risks and uncertainties not presently known by us or that we currently deem
immaterial also may impair our business operations. If any of the following risks actually occur,
our business could be harmed. In such case, the trading price of our common stock could decline and
investors could lose all or a part of the money paid to buy our common stock.</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>RISKS RELATED TO OUR BUSINESS</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 5%"><B><I>We have never generated any revenues, have a history of losses, and cannot assure you that
we will ever become or remain profitable. As a result, you may lose your entire investment.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have not yet generated any revenue from operations and, accordingly, we have incurred net
losses every year since our inception in 1998. For the fiscal years ended December&nbsp;31, 2005 and
2004, we had net losses of $3,115,186 and $6,803,280, respectively, and for the six-month periods
ended June&nbsp;30, 2006 and 2005, we had net losses of $5,990,330 and $1,839,573, respectively. To
date, we have dedicated most of our financial resources to research and development, general and
administrative expenses and initial sales and marketing activities. We have funded all of our
activities through sales of our securities. Although we expect to generate revenue beginning in
2006 from sales of products incorporating our ZEFS, MK IV and CAT-MATE technologies, we anticipate
net losses and negative cash flow to continue for the foreseeable future until such time as our
products are brought to market in sufficient amounts to offset operating losses. As planned, we
have significantly expanded both our research and development efforts, and our sales and marketing
efforts, during the past year. Consequently, we will need to generate
</DIV>
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">significant additional revenue to fund our operations. This has put a proportionate
corresponding demand on capital. Our ability to achieve profitability is entirely dependent upon
our research and development efforts to deliver a viable product and the company&#146;s ability to
successfully bring it to market. Although our management is optimistic that we will succeed with
marketing products incorporating our ZEFS, MK IV and CAT-MATE technologies, there can be no
assurance that we will ever generate any revenues or that any revenues that may be generated will
be sufficient for us to become profitable or thereafter maintain profitability. If we cannot
generate any revenues or become or remain profitable, we may have to cease our operations and
liquidate our business and you may lose your entire investment.
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 5%"><B><I>Our independent auditors have expressed doubt about our ability to continue as a going
concern, which may hinder our ability to obtain future financing.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In their report dated March&nbsp;22, 2006, our independent auditors stated that our financial
statements for the year ended December&nbsp;31, 2005 were prepared assuming that we would continue as a
going concern. Our ability to continue as a going concern is an issue raised as a result of our
recurring negative cash flows from operations and accumulated deficit. We had an accumulated
deficit of approximately $20,246,074 and $26,236,404 as of December&nbsp;31, 2005 and June&nbsp;30, 2006,
respectively. Our ability to continue as a going concern is subject to our ability to obtain
significant additional capital to fund our operations and to generate revenue from sales, of which
there is no assurance. The going concern qualification in the auditor&#146;s report could materially
limit our ability to raise additional capital. If we fail to raise sufficient capital, we may have
to liquidate our business and you may lose your investment.
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 5%"><B><I>We will need additional capital to meet our operating needs, and we cannot be sure that
additional financing will be available.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of June&nbsp;30, 2006 our expenses ran, and are expected to continue to run, at a &#147;burn rate&#148; of
approximately $400,000 per month. Our current capital resources will be sufficient to fund
operations only through October&nbsp;2006, and we will require additional capital in order to operate
beyond this date. Management anticipates that at least portion of our cash flow needs will be
satisfied by the exercise of outstanding warrants to purchase our common stock, at variable prices,
which are coming due at various times this year. In addition, management is actively pursuing other
financing alternatives. However, no assurance can be given at this time that any such sources of
capital will be available to us, or available to us on favorable terms. If we cannot obtain needed
capital, when and as we need it, our continuing research and development efforts, sales and
marketing plans, business and financial condition and our ability to reduce losses and generate
profits are likely to be materially and adversely affected.
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 5%"><B><I>If we obtain additional financing, you may suffer significant dilution.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any additional issuance of our common stock, or securities convertible into or exercisable for
our common stock, would dilute the percentage ownership of our existing stockholders. This dilution
could also have an adverse impact on our earnings per share, if and when we become profitable, and
reduce the price of our common stock. In addition, the new securities may have rights, preferences
or privileges senior to those of our common stock.
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 5%"><B><I>As a company with an unproven business strategy, our limited history of operations makes
evaluation of our business and prospects difficult.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our business prospects are difficult to predict because of our limited operating history,
early stage of development and unproven business strategy. Since our incorporation in 1998, we have
been and continue to be involved in development of products using our technology, establishing
manufacturing and marketing of these products to consumers and industry partners. Although we
believe our technology and products in development have significant profit potential, we may not
attain profitable operations and our management may not succeed in realizing our business
objectives.
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 5%"><B><I>If we are not able to devote adequate resources to product development and
commercialization, we may not be able to develop our products.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our business strategy is to develop, manufacture and market products incorporating our ZEFS,
MK IV and CAT-MATE technologies. We believe that our revenue growth and profitability, if any, will
substantially depend upon our ability to:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>raise additional needed capital for research and development;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>complete development of our products in development; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>successfully introduce and commercialize our new products.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain of our products are still under various stages of development. Because we have limited
resources to devote to product development and commercialization, any delay in the development of
one product or reallocation of resources to product development efforts that prove unsuccessful may
delay or jeopardize the development of other product candidates. Although our management believes
that it can finance our product development through private placements and other capital sources,
if we do not develop new products and bring them to market, our ability to generate revenues will
be adversely affected.
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 5%"><B><I>As we have not generated positive cash flow from operations, our ability to continue
operations is dependent on our ability to either begin to generate positive cash flow from
operations or our ability to raise capital from outside sources.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have not generated positive cash flow from operations and have relied on external sources
of capital to fund operations. We had $1,628,517 in cash at June&nbsp;30, 2006 and negative cash flow
from operations of $2,449,893 for the six-month period ended June&nbsp;30, 2006.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We currently do not have credit facilities available with financial institutions or other
third parties, and historically have relied upon best efforts third-party funding. Though we have
been successful at raising capital on a best efforts basis in the past, we can provide no assurance
that we will be successful in any future best-efforts financing endeavors. We may need to continue
to rely upon financing from external sources to fund our operations for the foreseeable future. If
we are unable to raise sufficient capital from external sources to fund our operations, we may need
to curtail operations.
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 5%"><B><I>The commercial viability of products incorporating our ZEFS, MK IV and CAT-MATE technologies
remains largely unproven and we may not be able to attract customers.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Despite the fact that we have entered into our first distribution agreements, and have
received our first order to ship products, to the best of our knowledge, no consumer, engine,
carburetor or automobile manufacturer has used products incorporating our ZEFS, MK IV or CAT-MATE
technologies to reduce engine emissions, enhanced performance or fuel efficiency to date.
Accordingly, the commercial viability of our products are not known at this time. If commercial
opportunities are not realized from the sale and use of products incorporating our ZEFS, MK IV and
CAT-MATE technologies, our ability to generate revenue would be adversely affected. There can be no
assurances that we will be successful in marketing our products, or that customers will ultimately
purchase our products. Failure to have commercial success from the sale of these products will
significantly and negatively impact our financial condition.
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 5%"><B><I>If our products and services do not gain market acceptance, it is unlikely that we will
become profitable.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The market for products that reduce harmful motor vehicle emissions is evolving and we have
many successful competitors. Automobile manufacturers have historically used various technologies,
including catalytic converters, to reduce exhaust emissions caused by their products. At this time,
our technology is unproven, and the use of our technology by others is limited. The commercial
success of our products will depend upon the adoption of our technologies by auto manufacturers and
consumers as an approach to reduce motor vehicle emissions. Market acceptance will depend on many
factors, including:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the willingness and ability of consumers and industry partners to adopt new technologies;</TD>
</TR>

</TABLE>
</DIV>
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<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the willingness of governments to mandate reduction of motor vehicle emissions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our ability to convince potential industry partners and consumers that our technologies
are an attractive alternative to other technologies for reduction of motor vehicle
emissions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our ability to manufacture products and provide services in sufficient quantities with
acceptable quality and at an acceptable cost; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our ability to place and service sufficient quantities of our products.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If our products do not achieve a significant level of market acceptance, demand for our
products will not develop as expected and it is unlikely that we will become profitable.
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 5%"><B><I>We need to outsource and rely on third parties for the manufacture, sales and marketing of
our products, and our future success will be dependent on the timeliness and effectiveness of
the efforts of these third parties.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We do not have the required financial and human resources or capability to manufacture, market
and sell our products. Our business model calls for the outsourcing of the manufacture, and sales
and marketing of our products in order to reduce our capital and infrastructure costs as a means of
potentially improving our financial position and the profitability of our business. Accordingly, we
must enter into agreements with other companies that can assist us and provide certain capabilities
that we do not possess. We have entered into certain distribution agreements, but we may not be
successful in entering into additional such alliances on favorable terms or at all. Even if we do
succeed in securing additional distribution agreements, we may not be able to maintain them.
Furthermore, any delay in entering into agreements could delay the development and
commercialization of our products and reduce their competitiveness even if they reach the market.
Any such delay related to our existing or future agreements could adversely affect our business.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We do not currently have an agreement in place for the manufacture of products incorporating
our ZEFS or MK IV technologies, although Quadrant Technologies Inc. has a right of first refusal
for the manufacture of such products. Although we presently intend to have products incorporating
our CAT-MATE technology manufactured by Kwong Kee (Qing Xin) Environmental Exhaust Systems Company,
Ltd. in China , we do not yet have an agreement in place for the manufacture of products
incorporating our CAT-MATE technology.
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 5%"><B><I>If any party to which we have outsourced certain functions fails to perform its obligations
under agreements with us, the development and commercialization of our products could be
delayed or curtailed.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the extent that we rely on other companies to manufacture, sell or market our products, we
will be dependent on the timeliness and effectiveness of their efforts. If any of these parties do
not perform its obligations in a timely and effective manner, the commercialization of our products
could be delayed or curtailed because we may not have sufficient financial resources or
capabilities to continue such development and commercialization on our own.
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 5%"><B><I>Any revenues that we may earn in the future are unpredictable, and our operating results
are likely to fluctuate from quarter to quarter.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe that our future operating results will fluctuate due to a variety of factors,
including:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>delays in product development;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>market acceptance of our new products;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in the demand for, and pricing, of our products;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>competition and pricing pressure from competitive products;</TD>
</TR>

</TABLE>
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>manufacturing delays; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>expenses related to, and the results of, proceedings relating to our intellectual property.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A large portion of our expenses, including expenses for our facilities, equipment and
personnel, is relatively fixed and not subject to significant reduction. In addition, we expect our
operating expenses will continue to increase significantly in 2006, as a result of our continuing
research and development efforts, and increased production, and sales and marketing activities.
Although we expect to generate revenues from sales of our products in the future, revenues may
decline or not grow as anticipated and our operating results could be substantially harmed for a
particular fiscal period. Moreover, our operating results in some quarters may not meet the
expectations of stock market analysts and investors. In that case, our stock price most likely
would decline.
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B><I>Nondisclosure agreements with employees and others may not adequately prevent disclosure of
trade secrets and other proprietary information.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order to protect our proprietary technology and processes, we rely in part on nondisclosure
agreements with our employees, licensing partners, consultants, agents and other organizations to
which we disclose our proprietary information. These agreements may not effectively prevent
disclosure of confidential information and may not provide an adequate remedy in the event of
unauthorized disclosure of confidential information. In addition, others may independently discover
trade secrets and proprietary information, and in such cases we could not assert any trade secret
rights against such parties. Costly and time-consuming litigation could be necessary to enforce and
determine the scope of our proprietary rights, and failure to obtain or maintain trade secret
protection could adversely affect our competitive business position. Since we rely on trade secrets
and nondisclosure agreements, in addition to patents, to protect some of our intellectual property,
there is a risk that third parties may obtain and improperly utilize our proprietary information to
our competitive disadvantage. We may not be able to detect unauthorized use or take appropriate and
timely steps to enforce our intellectual property rights.
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B><I>The manufacture, use or sale of our current and proposed products may infringe on the
patent rights of others, and we may be forced to litigate if an intellectual property
dispute arises.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If we infringe or are alleged to have infringed another party&#146;s patent rights, we may be
required to seek a license, defend an infringement action or challenge the validity of the patents
in court. Patent litigation is costly and time consuming. We may not have sufficient resources to
bring these actions to a successful conclusion. In addition, if we do not obtain a license, do not
successfully defend an infringement action or are unable to have infringed patents declared
invalid, we may:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>incur substantial monetary damages;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>encounter significant delays in marketing our current and proposed product candidates;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>be unable to conduct or participate in the manufacture, use or sale of product
candidates or methods of treatment requiring licenses;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>lose patent protection for our inventions and products; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>find our patents are unenforceable, invalid, or have a reduced scope of protection.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Parties making such claims may be able to obtain injunctive relief that could effectively
block the company&#146;s ability to further develop or commercialize our current and proposed product
candidates in the United States and abroad and could result in the award of substantial damages.
Defense of any lawsuit or failure to obtain any such license could substantially harm the company.
Litigation, regardless of outcome, could result in substantial cost to and a diversion of efforts
by the company.
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B><I>We may face costly intellectual property disputes.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our ability to compete effectively will depend in part on our ability to develop and maintain
proprietary aspects of our technologies and either to operate without infringing the proprietary
rights of others or to obtain rights to technology owned by third parties. Our pending patent
applications, specifically patent rights of the MK IV and CAT-MATE technologies, may not result in
the issuance of any patents or any issued patents that will offer protection against competitors
with similar technology. Patents we have received for our ZEFS technology, and which we may
receive, may be challenged, invalidated or circumvented in the future or the rights created by
those patents may not provide a competitive advantage. We also rely on trade secrets, technical
know-how and continuing invention to develop and maintain our competitive position. Others may
independently develop substantially equivalent proprietary information and techniques or otherwise
gain access to our trade secrets.
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B><I>We are involved in a patent infringement suit brought by our former sole director and
executive officer.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In April&nbsp;2005, Jeffrey A. Muller, the Company&#146;s former sole director and executive officer,
filed a complaint against us seeking declaratory and injunctive relief and alleging unfair
competition in connection with a claimed prior patent interest in the ZEFS technology. Mr.&nbsp;Muller
is seeking to have the patent rights in the ZEFS technology that were previously transferred to us
by Mr.&nbsp;Muller&#146;s bankruptcy trustee declared null and void. This is but one of several claims that
have been litigated over a number of years between Mr.&nbsp;Muller and us. While we believe that we have
valid claims and defenses, there can be no assurance that an adverse result or outcome in the
pending litigation would not have a material adverse effect on our business prospects, financial
position and cash flow.
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B><I>We may not be able to attract or retain qualified senior personnel.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe we are currently able to manage our current business with our existing management
team. However, as we expand the scope of our operations, we will need to obtain the full-time
services of additional senior management and other personnel. Competition for highly-skilled
personnel is intense, and there can be no assurance that we will be able to attract or retain
qualified senior personnel. Our failure to do so could have an adverse effect on our ability to
implement our business plan. As we add full-time senior personnel, our overhead expenses for
salaries and related items will increase from current levels and, depending upon the number of
personnel we hire and their compensation packages, these increases could be substantial.
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>If we lose our key personnel or are unable to attract and retain additional personnel, we may
be unable to achieve profitability.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our future success is substantially dependent on the efforts of our senior management,
particularly Eugene E. Eichler, Bruce H. McKinnon and John Richard Bautista III. The loss of the
services of members of our senior management may significantly delay or prevent the achievement of
product development and other business objectives. Because of the scientific nature of our
business, we depend substantially on our ability to attract and retain qualified marketing,
scientific and technical personnel. There is intense competition among specialized automotive
companies for qualified personnel in the areas of our activities. If we lose the services of, or do
not successfully recruit key marketing, scientific and technical personnel, the growth of our
business could be substantially impaired. At present, we maintain key man insurance only for Mr.
McKinnon.
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B><I>We expect to incur increased costs under the Sarbanes-Oxley Act of 2002.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a public company, we incur significant legal, accounting and other expenses. In addition,
the Sarbanes-Oxley Act of 2002, as well as related rules adopted by the Securities and Exchange
Commission, have imposed substantial requirements on public companies, including certain corporate
governance practices and requirements relating to internal control over financial reporting under
Section&nbsp;404 of the Sarbanes-Oxley Act. We expect these rules and regulations to increase our legal
and financial compliance costs and to make some activities more time-consuming and costly.
Although, under proposed rules issued by the Securities and Exchange Commission (the &#147;SEC&#148;) in July
2006, we will not be required to evaluate how to document and test our internal control procedures
under Section&nbsp;404 of the Sarbanes-Oxley Act and
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">the related rules of the SEC until our Annual Report on Form 10-KSB for the year ended
December&nbsp;31, 2007, effective disclosure controls and procedures and internal controls are necessary
for us to produce reliable financial reports and are important in helping prevent financial fraud
generally. We must begin to implement proper procedures significantly in advance of this date and
will incur significant up-front expenses to do so. If we are unable to achieve and maintain
adequate disclosure controls and procedures and internal controls, our business and operating
results could be harmed.
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B><I>Changes in stock option accounting rules may adversely affect our reported operating results,
our stock price, and our ability to attract and retain employees.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In December&nbsp;2004, the Financial Accounting Standards Board published new rules that will
require companies such as us to record all stock-based employee compensation as an expense. The new
rules apply to stock options grants, as well as a wide range of other share-based compensation
arrangements including restricted share plans, performance-based awards, share appreciation rights,
and employee share purchase plans. Large public companies have had to apply the new financial
accounting rules to the first fiscal year that began after June&nbsp;15, 2005, while small business
issuers such as this company have had to apply the new rules in their first fiscal year beginning
after December&nbsp;15, 2005. As a small company with limited financial resources, we have depended upon
compensating our officers, directors, employees and consultants with such stock based compensation
awards in the past in order to limit our cash expenditures and to attract and retain officers,
directors, employees and consultants. Accordingly, if we continue to grant stock options or other
stock based compensation awards to our officers, directors, employees, and consultants after the
new rules apply to us, our future earnings, if any, will be reduced (or our future losses will be
increased) by the expenses recorded for those grants. These compensation expenses may be larger
than the compensation expense that we would be required to record were we able to compensate these
persons with cash in lieu of securities. Since we are a small company, the expenses we may have to
record as a result of future options grants may be significant and may materially negatively affect
our reported financial results. The adverse effects that the new accounting rules may have on our
future financial statements should we continue to rely heavily on stock-based compensation may
reduce our stock price and make it more difficult for us to attract new investors. In addition,
reducing our use of stock plans as an incentive for and a reward to our officers, directors and
employees, could result in a competitive disadvantage to us in the employee marketplace.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>RISKS RELATED TO OUR COMMON STOCK</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B><I>Currently, there is only very limited trading in our stock, so you may be unable to sell
your shares at or near the quoted bid prices if you need to sell your shares.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The shares of our common stock are thinly-traded on the OTC Bulletin Board, meaning that the
number of persons interested in purchasing our common shares at or near bid prices at any given
time may be relatively small or non-existent. This situation is attributable to a number of
factors, including the fact that we are a small company engaged in a high risk business which is
relatively unknown to stock analysts, stock brokers, institutional investors and others in the
investment community that can generate or influence daily trading volume and valuation. Should we
even come to the attention of such persons, they tend to be risk-averse and would be reluctant to
follow an unproven, early stage company such as ours or purchase or recommend the purchase of our
shares until such time as we became more seasoned and viable. As a consequence, there may be
periods of several days or more when trading activity in our shares is minimal or non-existent, as
compared to a seasoned issuer which has a large and steady volume of trading activity that will
generally support continuous trading without negatively impacting our share price. We cannot give
you any assurance that a broader or more active public trading market for our common shares will
develop or be sustained. Due to these conditions, we can give you no assurance that you will be
able to sell your shares at or near bid prices or at all. As a result, you could lose all or part
of your investment.
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B><I>The market price of our stock is volatile.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The market price for our common stock has been volatile in recent months, ranging from a
closing price of $0.65 on January&nbsp;10, 2006 to a closing price of $4.74 on March&nbsp;13, 2006, and $1.49
on August&nbsp;30, 2006. Additionally, the price of our stock has been both higher and lower than those
amounts on an intra-day basis in recent months. Because our stock is thinly traded, its price can
change dramatically over short periods, even in a single day. An investment in our stock is subject
to such volatility and, consequently, is subject to significant risk. The market price of our
common stock could fluctuate widely in response to many factors, including:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>developments with respect to patents or proprietary rights;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>announcements of technological innovations by us or our competitors;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>announcements of new products or new contracts by us or our competitors;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>actual or anticipated variations in our operating results due to the level of
development expenses and other factors;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in financial estimates by securities analysts and whether any future earnings
of ours meet or exceed such estimates;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>conditions and trends in our industry;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>new accounting standards;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>general economic, political and market conditions and other factors; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the occurrence of any of the risks described in this prospectus.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B><I>Substantial sales of common stock could cause our stock price to fall.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of August&nbsp;17, 2006, we had 39,112,631 shares of common stock outstanding. In the past
year, there have been times when average daily trading volume of our common stock has been
extremely low, and there have been many days in which no shares were traded at all. At other times,
the average daily trading volume of our common stock has been high. As a result of the registration
of the shares included in this prospectus, an additional 7,000,000 shares of our common stock will
be able to be freely sold on the market, assuming all shares of common stock subject to options
under the Plan are granted, vest and are exercised. Because of the limited trading volume, the
sudden release of up to 7,000,000 additional freely trading shares included in this prospectus onto
the market, or the perception that such shares will or could come onto the market, could have an
adverse affect on the trading price of our stock. No prediction can be made as to the effect, if
any, that sales of the shares included in this prospectus, or the availability of such shares for
sale, will have on the market prices prevailing from time to time. Nevertheless, the possibility
that substantial amounts of common stock may be sold in the public market may adversely affect
prevailing market prices for our common stock and could impair our ability to raise capital through
the sale of our equity securities.
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B><I>You may have difficulty selling our shares because they are deemed &#147;penny stocks&#148;.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because our common stock is not quoted on the Nasdaq National Market or Nasdaq Capital Market
or listed on a national securities exchange, if the trading price of our common stock remains below
$5.00 per share, trading in our common stock will be subject to the requirements of certain rules
promulgated under the Securities Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;), which
require additional disclosure by broker-dealers in connection with any trades involving a stock
defined as a penny stock (generally, any non-Nasdaq equity security that has a market price of less
than $5.00 per share, subject to certain exceptions). Such rules require the delivery, prior to any
penny stock transaction, of a disclosure schedule explaining the penny stock market and the risks
associated therewith and impose various sales practice requirements on broker-dealers who sell
penny stocks to persons other than established customers and accredited investors (generally
defined as an investor with a net worth in excess of $1,000,000 or annual income exceeding $200,000
individually or $300,000 together with a spouse). For
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">these types of transactions, the broker-dealer must make a special suitability determination
for the purchaser and have received the purchaser&#146;s written consent to the transaction prior to the
sale. The broker-dealer also must disclose the commissions payable to the broker-dealer, current
bid and offer quotations for the penny stock and, if the broker-dealer is the sole market-maker,
the broker-dealer must disclose this fact and the broker-dealer&#146;s presumed control over the market.
Such information must be provided to the customer orally or in writing before or with the written
confirmation of trade sent to the customer. Monthly statements must be sent disclosing recent price
information for the penny stock held in the account and information on the limited market in penny
stocks. The additional burdens imposed upon broker-dealers by such requirements could discourage
broker-dealers from effecting transactions in our common stock, which could severely limit the
market liquidity of the common stock and the ability of holders of the common stock to sell their
shares.
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B><I>Potential issuance of additional shares of our common stock could dilute existing
stockholders.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are authorized to issue up to 200,000,000 shares of common stock. To the extent of such
authorization, our Board of Directors has the ability, without seeking stockholder approval, to
issue additional shares of common stock in the future for such consideration as the Board of
Directors may consider sufficient. The issuance of additional common stock in the future will
reduce the proportionate ownership and voting power of the common stock offered hereby.
</DIV>

<DIV align="left">
<A name="105"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>THE COMPANY</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are a development stage company that has not yet generated revenues. Historically, we
devoted the bulk of our efforts to the completion of the design, the development of our production
models and the promotion of our products in the marketplace worldwide. Our products, based on our
&#147;ZEFS&#148;, &#147;CAT-MATE&#148; and &#147;MK IV&#148; technologies, are designed to reduce harmful emissions, and improve
fuel efficiency and overall performance on equipment and vehicles driven by internal combustion
engines. We have taken actions to secure our intellectual property rights to the ZEFS and CAT-MATE
technologies.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During 2005 and continuing in 2006, we began to focus on the initial marketing of our
products. We entered into the first agreements for the distribution of our products in late 2005
and early 2006. Our first two U.S. distributorship agreements with Team Phantom of Alaska and
Motorcycle Products Consulting (&#147;MPC&#148;) of California, provides for the sale of our ZEFS and MK
IV-based products in the North American original equipment manufacturer (&#147;OEM&#148;) and after-market
for motorcycles through the distributors to certain named prospective purchasers.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In January&nbsp;2006, we entered into our first international distributorship agreement, with
Golden Allied Enterprises (Group) Co., Ltd. (&#147;GAE&#148;). The agreement provides that GAE will serve as
our exclusive distributor for our products using ZEFS, CAT-MATE and MK IV technologies in the
People&#146;s Republic of China. The agreement with GAE was conditioned upon our ZEFS-based products
achieving EURO2 standards in tests to be conducted in Shanghai. These tests were conducted and
passed in April&nbsp;2006.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In July&nbsp;2006, GAE placed its first order under the distributorship agreement, for 100,000
units, to be shipped in installments between now and July&nbsp;2007. These products are in
pre-production and we anticipate that we will begin delivering products under the agreement to GAE
commencing in September&nbsp;2006, and will begin generating revenue in late 2006.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In April&nbsp;2006, we entered into a product development agreement with Kwong Kee (Qing Xin)
Environmental Exhaust Systems Company, Ltd. in China. Kwong Kee, a manufacturer of mufflers and
catalytic converters, will collaborate with us on product development based on our CAT-MATE
technology. As part of our strategic alliance, Kwong Kee will make available its research and
development facilities, testing equipment and product design and development support team.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In July&nbsp;2006, we entered into an agreement with Quadrant Technology L.P. pursuant to which
Quadrant Technology will provide product development services for our products. Under this
agreement, Quadrant Technology was also granted a right of first refusal to manufacture our ZEFS
and other magnetic products.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->10<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Also in July&nbsp;2006, we entered into an agreement with Marketing Matters, Inc. to provide
exclusive agency services in the United States for advertising, marketing, industry and trade show
promotion, as well as packaging design services. We entered into a separate agreement with SS Sales
and Marketing Group, to provide marketing and promotional services in the western United States and
western Canada for our products.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, we are continuing our marketing efforts to international governmental entities in
cooperation with the United Nations Environmental Programme (UNEP)&nbsp;and various OEMs and the
aftermarket to sell or license products using our ZEFS and CAT-MATE technologies. We anticipate
that these efforts will continue during the remainder of 2006.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As part of our ongoing product development, we are in the process of launching two new product
lines, ECO ChargR and MAG ChargR, which we differentiate products based on their differing magnetic
fluxes and their applications. ECO ChargR products will be more focused toward reduction in
emissions and MAG ChargR will be more focused toward performance and fuel economy.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The ECO ChargR product line employs our ZEFS and MK IV technologies, and is intended
specifically for the reduction of exhaust emissions in vehicle and small utility motors. These
products will be marketed primarily to OEMs as well as pilot and government-mandated emissions
programs.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The MAG ChargR products feature our ZEFS or MK IV technologies, as well as other power
enhancing features, to exploit the power and mileage improving attributes of our magnetic
technologies. MAG ChargR will be marketed primarily to the consumer aftermarket for many vehicles,
including but not limited to cars, trucks, motorcycles, scooters, all terrain vehicles (ATVs),
snowmobiles, personal watercrafts and small utility motors.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expenses have been funded primarily through the sale of stock and convertible debt. We have
raised capital in 2006 and will need to raise additional capital in 2006, and possibly beyond, to
fund our sales and marketing efforts, continuing research and development, and certain other
expenses, until our revenue base grows sufficiently.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since February&nbsp;2, 2006, our common stock has been quoted on the Over-the-Counter Bulletin
Board under the symbol &#147;ZERO&#148;.
</DIV>

<DIV align="left">
<A name="106"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>USE OF PROCEEDS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will not receive any proceeds from the sale of any of the common stock by the Selling
Shareholders pursuant to this prospectus. All proceeds from the sale of the Shares will be for the
account of the Selling Shareholders. However, we will receive the proceeds from the exercise of
options for up to 7,000,000 shares underlying such options, which are covered by this prospectus.
We expect to use the proceeds, if any, that we receive from the exercise of options for general
working capital purposes. We will pay the expenses of registration of these shares, including legal
and accounting fees.
</DIV>

<DIV align="left">
<A name="107"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SELLING SHAREHOLDERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Selling Shareholders Table</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The table below sets forth information concerning the Shares by the Selling Shareholders that
have been acquired by them pursuant to the Plan. The inclusion in this table of the individuals
named therein shall not be deemed to be an admission that they are &#147;affiliates&#148; of the Company. No
estimate can be given as to the amount or percentage of our common stock that will be held by the
Selling Shareholders after any sales made pursuant to this Reoffer Prospectus because the Selling
Shareholders are not required to sell any of the shares being registered under this prospectus. The
following table assumes that the Selling Shareholders will sell all of the Shares listed in this
Reoffer Prospectus.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the beneficial ownership of the Selling Shareholders as of
August&nbsp;17, 2006. Shares of common stock subject to options, warrants and convertible securities
currently
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->11<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>


<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">exercisable or convertible, or exercisable or convertible within 60&nbsp;days are deemed
outstanding, including for purposes of computing the percentage ownership of the person holding the
option, warrant or convertible security, but not for purposes of computing the percentage of any
other holder.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>&nbsp;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11" style="border-bottom: 1px solid #000000"><B>Beneficial Ownership Before Offering(1)</B></TD>
    <TD>&nbsp;</TD>
       <TD nowrap align="center" colspan="7"><B>Beneficial Ownership</B></TD>

</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>After Offering (1)</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares Being</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name of Selling Shareholder</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Percent</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Offered (2)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>of Shares (3)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Percent(3)</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Estate of Edward L. Masry (4)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,328,740</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">15.78</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">328,740</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">15.18</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Eugene E. Eichler, Chief
Executive Officer, Chief
Financial Officer and Director(5)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,640,528</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">4.03</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,121,127</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">928,572</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2.32</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Bruce McKinnon, Chief Operating
Officer, President and
Director(6)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,135,341</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2.82</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">996,127</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">548,385</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.38</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD nowrap><DIV style="margin-left:15px; text-indent:-15px">John Bautista, Executive Vice
President-Operations(7)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">332,985</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">309,171</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">232,985</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD align="left">*</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John Brown, Director(8)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">400,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">180,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">250,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD align="left">*</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Joseph Helleis, Director(9)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">525,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.32</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">305,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">250,00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD align="left">*</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cecil Kyte, Director(10)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,317,359</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">5.60</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,317,359</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">5.60</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John Price, Director(11)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">441,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.11</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">180,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">291,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD align="left">*</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Less than 1%</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Percentage of beneficial ownership is based upon 39,112,631 shares of
our common stock outstanding as of August&nbsp;17, 2006. Beneficial
ownership is determined in accordance with the rules of the SEC and
generally includes voting or investment power with respect to
securities. Shares of common stock subject to options and warrants
currently exercisable or convertible, or exercisable or convertible
within 60&nbsp;days, are deemed outstanding for determining the number of
shares beneficially owned and for computing the percentage ownership
of the person holding such options, but are not deemed outstanding
for computing the percentage ownership of any other person. Except as
indicated by footnote, and subject to community property laws where
applicable, the persons named in the table have sole voting and
investment power with respect to all shares of common stock shown as
beneficially owned by them.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Consists of shares issuable upon the exercise of options granted
pursuant to the Plan both currently exercisable and not currently
exercisable.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Beneficial Ownership of Shares held by each Selling Shareholder after
this offering assumes that each Selling Shareholder sells all of the
shares offered in this Reoffer Prospectus, but does not constitute a
commitment to sell any or all of the stated number of Shares of
common stock. The number of shares offered shall be determined from
time to time by each Selling Shareholder in his or her sole
discretion..</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Masry, our late Chairman and Chief Executive Officer, passed away
on December&nbsp;6, 2005. Consists of 1,000,000 shares of our common
stock, options to purchase 2,000,000 shares of our common stock
granted prior to the adoption of the Plan and options to purchase
328,740 shares of our common stock granted under the Plan, all of
which are exercisable either currently or within 60&nbsp;days after August&nbsp;17, 2006.
Also includes 2,800,000 shares and warrants to purchase
an aggregate 1,200,000 shares of our common stock held by Masry &#038;
Vititoe, PC. Mr.&nbsp;Masry was a shareholder of Masry &#038; Vititoe, PC, and
may be deemed to have been a beneficial owner of the shares held by
such entity during the period that Mr.&nbsp;Masry served as our Chairman
and Chief Executive Officer. During his lifetime, Mr.&nbsp;Masry disclaimed
beneficial ownership of these shares except to the extent of his
proportional share therein.</TD>
</TR>
<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>
 <TR valign="top">
    <TD nowrap align="left">(5)</TD>
    <TD>&nbsp;</TD>
    <TD>Consists of 500,000 shares of our common stock held by Mr.&nbsp;Eichler,
options to purchase 961,956 shares of our common stock held by Mr.
Eichler and warrants to purchase 107,143 shares of our common stock
held by the Eichler/Wise Family Trust, a revocable trust of which Mr.
Eichler is a Trustee; exercisable or convertible either currently or
within 60&nbsp;days after August&nbsp;17, 2006. Also includes options to
purchase 409,171 shares of common stock which are not currently
exercisable and 71,429 shares of common stock held by the
Eichler/Wise Family Trust.</TD>
</TR>



</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->12<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">





<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>


<TR valign="top">
    <TD nowrap align="left">(6)</TD>
    <TD>&nbsp;</TD>
    <TD>Consists of 400,000 shares of our common stock held by Mr.&nbsp;McKinnon, options to purchase 586,956 shares of our common stock exercisable either currently or within 60&nbsp;days after August&nbsp;17, 2006 and options
to purchase 409,171 shares of common stock which are not currently
exercisable. Also includes 69,814 shares of our common stock and
warrants to purchase 78,571 shares of our common stock, exercisable
or convertible either currently or within 60&nbsp;days after August&nbsp;17,
2006, held by the KZ Golf, Inc. Defined Benefit Pension Plan Mr.
McKinnon is a principal stockholder of KZ Golf, Inc.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(7)</TD>
    <TD>&nbsp;</TD>
    <TD>Consists of 100,714 shares of our common stock held by Mr.&nbsp;Bautista,
15,100 shares of our common stock held by Mr.&nbsp;Bautista and his
spouse, 19,300 shares of our common stock held in an individual
retirement account established by Mr.&nbsp;Bautista,. 6,300 shares of
common stock held by Mr.&nbsp;Bautista&#146;s spouse and 13,000 shares of our
common stock held in an individual retirement account established by
Mr.&nbsp;Bautista&#146;s spouse. Mr.&nbsp;Bautista also holds warrants to purchase
78,571 shares of our common stock, and
options to purchase 100,000 shares of our common stock granted
pursuant to the Plan, exercisable either currently or within 60&nbsp;days
after August&nbsp;17, 2006. Includes options to purchase 209,171 shares
of common stock granted opursuant to the Plan which are not currently
exercisable.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(8)</TD>
    <TD>&nbsp;</TD>
    <TD>Cnsists of 250,000 shares of our common stock held by Mr.&nbsp;Brown,
options to purchase 150,000 shares of our common stock exercisable
either currently or within 60&nbsp;days after August&nbsp;17, 2006 and options
to purchase 30,000 shares of common stock which are not currently
exercisable..</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(9)</TD>
    <TD>&nbsp;</TD>
    <TD>Consists of 250,000 shares of our common stock held by Mr.&nbsp;Helleis,
options to purchase 275,000 shares of our common stock exercisable
either currently or within 60&nbsp;days after August&nbsp;17, 2006 and options
to purchase 30,000 shares of common stock which are not currently
exercisable.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(10)</TD>
    <TD>&nbsp;</TD>
    <TD>Consists of 1,207,359 shares of our common stock held by Mr.&nbsp;Kyte,
warrants to purchase 1,110,000 shares of our common stock exercisable
either currently or within 60&nbsp;days after August&nbsp;17, 2006 and options
to purchase 30,000 shares of common stock which are not currently
exercisable.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(11)</TD>
    <TD>&nbsp;</TD>
    <TD>Consists of 291,000 shares of our common stock held by Mr.&nbsp;Price,
options to purchase 150,000 shares of our common stock exercisable
either currently or within 60&nbsp;days after August&nbsp;17, 2006 and options
to purchase 30,000 shares of common stock which are not currently
exercisable.</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information in the above table is as of the date of this Reoffer Prospectus. Information
concerning the Selling Shareholders may change from time to time and any such changed information
will be described in supplements to this Reoffer Prospectus if and when necessary.
</DIV>

<DIV align="left">
<A name="108"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PLAN OF DISTRIBUTION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Selling Shareholder of our common stock and any of their transferees, pledgees,
assignees, donees, and successors-in-interest may, from time to time, sell any or all of their
shares of common stock on the stock exchange, market or trading facility on which the shares are
traded or in private transactions. These sales may be at fixed or negotiated prices. A Selling
Shareholder may use any one or more of the following methods when selling shares:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>ordinary brokerage transactions and transactions in which the broker-dealer solicits
purchasers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>block trades in which the broker-dealer will attempt to sell the shares as agent but
may position and resell a portion of the block as principal to facilitate the transaction;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>purchases by a broker-dealer as principal and resale by the broker-dealer for its account;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>an exchange distribution in accordance with the rules of the applicable exchange;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>privately negotiated transactions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>broker-dealers may agree with the Selling Shareholders to sell a specified number of
such shares at a stipulated price per share;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a combination of any such methods of sale; or</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->13<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any other method permitted pursuant to applicable law.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Selling Shareholders may also sell shares of Common Stock owned by them, including the
Shares, under Rule&nbsp;144 under the Securities Act, if available, rather than under this Reoffer
Prospectus.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Broker-dealers engaged by the Selling Shareholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from the Selling
Shareholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the
purchaser) in amounts to be negotiated.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Selling Shareholders and any broker-dealers or agents that are involved in selling the
shares of common stock may be deemed to be &#147;underwriters&#148; within the meaning of the Securities Act
in connection with such sales. In such event, any commissions received by such broker-dealers or
agents and any profit on the resale of the shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act. Because Selling Shareholders may be
deemed to be underwriters within the meaning of the Securities Act, they will be subject to the
prospectus delivery requirements of the Securities Act. Discounts, concessions, commissions and
similar selling expenses, if any, that can be attributed to the sale of common stock will be paid
by the Selling Shareholder and/or the purchasers.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There is no underwriter or coordinating broker acting in connection with the proposed sale of
the resale shares by the Selling Shareholders.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under applicable rules and regulations under the Exchange Act, any person engaged in the
distribution of the resale shares may not simultaneously engage in market making activities with
respect to our Common Stock for a period of two business days prior to the commencement of the
distribution. In addition, the Selling Shareholders will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including Regulation&nbsp;M, which may limit the
timing of purchases and sales of shares of our common stock by the Selling Shareholders or any
other person. We will make copies of this Reoffer Prospectus available to the Selling Shareholders
and have informed them of the need to deliver a copy of this prospectus to each purchaser at or
prior to the time of the sale.
</DIV>

<DIV align="left">
<A name="109"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>LEGAL MATTERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SEC Law Firm, Los Angeles, California has rendered an opinion with respect to the validity of
the shares of common stock covered by this prospectus.
</DIV>

<DIV align="left">
<A name="110"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXPERTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The financial statements for the years ended December&nbsp;31, 2005 and 2004 which are incorporated
by reference into this Reoffer Prospectus have been audited by Weinberg &#038; Co., P.A. to the extent
and for the periods indicated in their report thereon and have been so incorporated by reference in
reliance upon the report of Weinberg &#038; Co., P.A. and upon the authority of such firm as experts in
auditing and accounting.
</DIV>

<DIV align="left">
<A name="111"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DISCLOSURE OF COMMISSION POSITION ON<BR>
INDEMNIICATION FOR SECURITIES ACT LIABILITIES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Insofar as indemnification for liabilities arising under the Act, may be permitted to our
directors, officer or persons controlling the Company, we have been advised that it is the SEC&#146;s
opinion that such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->14<!-- /Folio -->
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PART II</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>INFORMATION REQUIRED IN THE REGISTRATION STATEMENT</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;3. </B><U><B>Incorporation of Documents by Reference</B></U><B>.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following documents filed with the Securities and Exchange Commission by Save the
World Air, Inc. (hereinafter referred to as the &#147;Company&#148; or the &#147;Registrant&#148;) are hereby
incorporated herein by reference:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Company&#146;s Annual Report on Form 10-KSB for the fiscal year ended December&nbsp;31, 2005
(Commission File No.&nbsp;000-29185).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The Company&#146;s Quarterly Report on Form 10-Q for the quarterly period ended March&nbsp;31,
2006 (Commission File No.&nbsp;000-29185).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. The Company&#146;s Quarterly Report on Form 10-QSB for the quarterly period ended June&nbsp;30, 2006
(Commission File No.&nbsp;000-29185).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The description of the Company&#146;s Common Stock contained in the Company&#146;s Registration
Statement on Form 10-SB/A (Commission File No.&nbsp;001-29185) filed with the Securities and Exchange
Commission on November&nbsp;29, 2000, and any amendments or reports filed to update the description.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All documents subsequently filed by the Company pursuant to Sections&nbsp;13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended, after the date of filing of this
Registration Statement and prior to such time as the Company files a post-effective amendment to
this Registration Statement which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date of filing of such
documents.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;4. </B><U><B>Description of Securities</B></U><B>.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;5. </B><U><B>Interests of Named Experts and Counsel</B></U><B>.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;6. </B><U><B>Indemnification of Directors and Officers</B></U><B>.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Articles of Incorporation provide that no officer or director shall be personally
liable to this corporation or our stockholders for monetary damages for breach of fiduciary duty as
a director or officer of this corporation. Our bylaws and Articles of Incorporation also provide
that we shall, to the maximum extent and in the manner permitted by the Nevada Revised Statutes,
indemnify each person who serves at any time as a director, officer, employee or agent of the
Company from and against any and all expenses, judgments, fines, settlements and other amounts
actually and reasonable incurred in connection with any
proceeding arising by reason of the fact that he is or was a director, officer, employee or
agent of the Company. We also have the power to defend such person from all suits or claims in
accord with the Nevada Revised Statutes. The rights accruing to any person under our bylaws and
Articles of Incorporation do not exclude any other right to which any such person may lawfully be
entitled, and we may indemnify or reimburse such person in any proper case, even though not
specifically provided for by the bylaws and Articles of Incorporation.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->II - 1<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Insofar as indemnification for liabilities for damages arising under the Securities Act
of 1933, as amended (the &#147;Securities Act&#148;) may be permitted to our directors, officers, and
controlling persons pursuant to the foregoing provision, or otherwise, we have been advised that in
the opinion of the Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company maintains insurance policies that provide coverage to its directors and officers
against certain liabilities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;7. </B><U><B>Exemption from Registration Claimed</B></U><B>.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;8. </B><U><B>Exhibits</B></U><B>.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The exhibits filed herewith or incorporated herein by reference are set forth in the
attached Exhibit&nbsp;Index.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;9. </B><U><B>Undertakings</B></U><B>.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The undersigned Registrant hereby undertakes:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;To file, during any period in which offers or sales are being made, a post-effective
amendment to this Registration Statement:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) To include any prospectus required by Section&nbsp;10(a)(3) of the Securities Act of
1933;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) To reflect in the prospectus any facts or events arising after the effective
date of the Registration Statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the information
set forth in the Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus filed with
the Commission pursuant to Rule 424(b) (&#167; 230.424(b) of this chapter) if, in the aggregate,
the changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the &#147;Calculation of Registration Fee&#148; table in the
effective registration statement; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) To include any material information with respect to the plan of distribution
not previously disclosed in the Registration Statement or any material change to such
information in the Registration Statement;
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>provided, however, </I>that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information
required to be included in a post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Securities and Exchange Commission by the Registrant
pursuant to Section&nbsp;13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;That, for the purpose of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new registration statement relating to
the securities offered herein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
</DIV>


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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;To remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the offering.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The undersigned Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Registrant&#146;s annual report pursuant
to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in this Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="112"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIGNATURES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that
it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8
and has duly caused this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of North Hollywood, State of
California, on this 1st day of
September, 2006.
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>SAVE THE WORLD AIR, INC.</B> <BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Eugene E. Eichler
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Eugene E. Eichler     &nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Chief Executive Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>POWER OF ATTORNEY</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each person whose signature appears below constitutes and appoints Eugene E. Eichler and Bruce
H. McKinnon and each of them individually, his or her true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, to sign any and all amendments (including post-effective
amendments) to this registration statement, and any additional registration statement to be filed
pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or
his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, this registration statement
has been signed by the following persons in the capacities and on the dates indicated.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Title</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Date</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="padding-top: 1em">

    <TD align="center" valign="top">/s/       EUGENE E. EICHLER<DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
Eugene E. Eichler</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
Chief Executive Officer, Chief<br>
Financial Officer and Director
</TD>
    <TD>&nbsp;</TD>

<TD align="center" valign="top"><FONT style="white-space: nowrap">September&nbsp;1, 2006</FONT></TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="center" valign="top">/s/  BRUCE H. MCKINNON<DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
Bruce H. McKinnon</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
President, Chief  Operating Officer and<br>
Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">September&nbsp;1, 2006</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="center" valign="top">/s/  JOSEPH HELLEIS<DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
Joseph Helleis</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
Chairman of the Board
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">September&nbsp;1, 2006</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="center" valign="top">/s/  J. JOSEPH BROWN<DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
J. Joseph Brown</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">September&nbsp;1, 2006</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="center" valign="top">/s/  JOHN F. PRICE<DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
John F. Price</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">September&nbsp;1, 2006</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="center" valign="top">/s/  CECIL KYTE<DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
Cecil Kyte</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">September&nbsp;1, 2006</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->II - 4<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="113"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>EXHIBIT INDEX </B></U>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="86%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Exhibit Description</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.1(1)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Articles of Incorporation, as amended, of the Registrant.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.2(1)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Bylaws of the Registrant.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.1(2)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Save the World Air, Inc. 2004 Stock Option, as amended.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.2*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certificate Regarding Amendment No.1 to Exhibit&nbsp;4.1</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.3*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certificate Regarding Amendment No.2 to Exhibit&nbsp;4.1</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.4(3)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Incentive Stock Option Agreement under 2004 Stock Option Plan</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.5(3)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Non-Qualified Stock Option Agreement under 2004 Stock Option Plan</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">5*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Counsel</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Weinberg &#038; Company, P.A.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">24*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Power of Attorney (included on Signature Page)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>filed herewith</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference from Registrant&#146;s Registration Statement on Form 10-SB
(Registration Number 000-29185), as amended, filed on March&nbsp;2, 2000.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference from Appendix&nbsp;C of Registrant&#146;s Schedule&nbsp;14A filed on April
30, 2004, in connection with its Annual Meeting of Stockholders held on May&nbsp;24, 2004.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference from Registrant&#146;s Form 10-KSB for the fiscal year ended
December&nbsp;31, 2004.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->II - 5<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.2
<SEQUENCE>2
<FILENAME>v23407exv4w2.htm
<DESCRIPTION>EXHIBIT 4.2
<TEXT>
<HTML>
<HEAD>
<TITLE>exv4w2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit&nbsp;4.2
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Certificate Regarding Amendment Number 1<BR>
to<BR>
2004 Stock Option Plan<BR>
of<BR>
Save the World Air, Inc.</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
undersigned Chief Executive Officer of Save the World Air, Inc., a Nevada corporation (the
&#147;Company&#148;) does hereby certify in such capacity as follows:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Pursuant to actions taken by the Board of Directors of the Company and ratified by actions by the
Shareholders of the Company at a duly noticed and validly held meeting of such Shareholders on May
24, 2005, Section&nbsp;2.1 of the Save the World Air, Inc. 2004 Stock Option Plan (the &#147;Plan&#148;) was
amended to in its entirety to read as follows:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.1 Maximum Number of Shares. </B>The stock to be offered under this Plan
shall be shares of the Company&#146;s authorized but unissued Stock, and the
aggregate number of shares of Stock to be delivered upon exercise of all Stock
Options granted under this Plan shall not exceed Five Million (5,000,000),
subject to adjustment as provided in Section hereof. If any Stock Option shall
terminate or expire for any reason without having vested under Section hereof
and been exercised in full under Section hereof, the unpurchased shares
subject thereto shall again be available for purposes of the foregoing
limitation.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In Witness
Whereof the undersigned Chief Executive Officer of Save the World Air, Inc. has executed this
Amendment Number 1 in such capacity this 31st day of August, 2006.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="39%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left"><B>SAVE THE WORLD AIR, INC.</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ EUGENE E. EICHLER</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px" valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Eugene E. Eichler</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>


<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Title:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Executive Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.3
<SEQUENCE>3
<FILENAME>v23407exv4w3.htm
<DESCRIPTION>EXHIBIT 4.3
<TEXT>
<HTML>
<HEAD>
<TITLE>exv4w3</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit&nbsp;4.3
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Certificate Regarding Amendment Number 2<BR>
to<BR>
2004 Stock Option Plan<BR>
of<BR>
Save the World Air, Inc.</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
undersigned Chief Executive Officer of Save the World Air, Inc., a Nevada corporation (the
&#147;Company&#148;) does hereby certify in such capacity as follows:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Pursuant to actions taken by the Board of Directors of the Company and ratified by actions by the
Shareholders of the Company at a duly noticed and validly held meeting of such Shareholders on May
24, 2006, Section&nbsp;2.1 of the Save the World Air, Inc. 2004 Stock Option Plan (the &#147;Plan&#148;) was
amended to in its entirety to read as follows:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.1 Maximum Number of Shares. </B>The stock to be offered under this Plan
shall be shares of the Company&#146;s authorized but unissued Stock, and the
aggregate number of shares of Stock to be delivered upon exercise of all Stock
Options granted under this Plan shall not exceed Seven Million (7,000,000),
subject to adjustment as provided in Section hereof. If any Stock Option shall
terminate or expire for any reason without having vested under Section hereof
and been exercised in full under Section hereof, the unpurchased shares
subject thereto shall again be available for purposes of the foregoing
limitation.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In Witness Whereof the undersigned Chief Executive Officer of Save the World Air, Inc. has executed this
Amendment Number 2 in such capacity this 31st day of August, 2006.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="39%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left"><B>SAVE THE WORLD AIR, INC.</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ EUGENE E. EICHLER</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px" valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Eugene E. Eichler</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>


<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Title:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Executive Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
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<DOCUMENT>
<TYPE>EX-5
<SEQUENCE>4
<FILENAME>v23407exv5.htm
<DESCRIPTION>EXHIBIT 5
<TEXT>
<HTML>
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<TITLE>exv5</TITLE>
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;5</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SEC LAW FIRM<BR>
11693 San Vicente Boulevard, Suite&nbsp;357<BR>
Los Angeles, CA 90049<BR>
Tel. 310-557-3059<BR>
Fax. 310-388-1320<BR>
www.seclawfirm.com</B>
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">September&nbsp;1, 2006
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Securities and Exchange Commission<BR>
100 F Street, N.E.<BR>
Washington, DC 20549

</DIV>

<DIV align="left" style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Re:</TD>
    <TD>&nbsp;</TD>
    <TD>Save the World Air, Inc.<br>
Form&nbsp;S-8 Registration Statement (File No.&nbsp;333-<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> )</TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Ladies and Gentlemen:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This opinion is furnished in connection with the preparation of a Registration Statement on
Form S-8 (the &#147;Registration Statement&#148;) filed by Save the World Air, Inc., a Nevada corporation
(the &#147;Company &#147;) with the Securities and Exchange Commission under the Securities Act of 1933, as
amended (the &#147;Securities Act&#148;), relating to 7,000,000 shares of the Common Stock, par value $0.001
per share (the &#147;Shares&#148;), which may be issued pursuant to the Save the World Air, Inc. 2004 Stock
Option Plan (the &#147;Plan&#148;).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have examined the originals, photocopies, certified copies or other evidence of such
records of the Company, certificates of officers of the Company and public officials, and other
documents as we have deemed relevant and necessary as a basis for the opinion hereinafter
expressed. In such examination, we have assumed the genuineness of all signatures, the authenticity
of all documents submitted to us as certified copies or photocopies and the authenticity of the
originals of such latter documents.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to the foregoing and on the basis of the aforementioned examinations and
investigations, it is our opinion that the Shares, when issued by the Company pursuant to the terms
and conditions of the Plan and as contemplated by the Registration Statement, will be validly
issued, fully paid and non-assessable.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We hereby consent to the filing of this opinion as Exhibit&nbsp;5 to the Registration Statement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 50%">Very truly yours,

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 50%">/s/ Lance Jon Kimmel

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
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<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>5
<FILENAME>v23407exv23.htm
<DESCRIPTION>EXHIBIT 23
<TEXT>
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<TITLE>exv23</TITLE>
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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;23</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">To the Board of Directors of<BR>
Save the World Air, Inc.

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We hereby
consent to the incorporation by reference in this Registration Statement on Form S-8 for Save the World
Air, Inc. of our report dated March&nbsp;22, 2006, relating to the financial statements of Save the
World Air, Inc. as of December&nbsp;31, 2005 and for the years ended
December&nbsp;31, 2005 and 2004 and to the reference to our firm as
&#147;Experts.&#148;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">/s/ Weinberg &#038; Company, P.A.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 0pt">Weinberg &#038; Company, P.A.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Los Angeles, CA

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">September&nbsp;1, 2006

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>


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