As we move into the 21st century, pressure from governments and environmental lobby groups as well as geo-political events is accelerating global demand to reduce the dependence on fossil fuelled electricity generation. International treaties such as the 'Kyoto Accord' have resulted in many countries formally committing to significantly reduce 'green house gas' emissions. Even countries such as the United States that have not formally signed onto the 'Kyoto Accord' have introduced their own plans to aggressively reduce 'green house gas' emissions. Recent geo-political instability in major fossil fuel producing regions has only served to increase public demand within North America to reduce dependence on fossil fuelled electricity generation.

Strong growth in energy demand is expected throughout North America to 2025, which will continue to fuel high-energy prices. Electricity consumption is projected to increase in all the end-use sectors. The highest growth rate is projected for the commercial sector, at 2.2 percent per year from 2002 to 2025, compared with 1.6 percent for industrial and 1.4 percent for residential electricity demand.

The combination of the aforementioned factors have served to create a near 'perfect storm' for North American companies that are scrambling to identify a painless way to reduce energy costs increase profits and reduce green house gas emissions. The technologies distributed by Smartcool are the means to achieve these goals.

Additionally Smartcool comes to the market with a number of very important competitive strengths that will help it to successfully penetrate the North American energy conservation market:

• Superb Economics - Although the ESM™ is a unique technological product its benefits are fundamentally financial. The ESM™ is a means to reduce costs, increase profits and satisfy ever-increasing demands to reduce greenhouse gas emissions.

• Ability to Capitalize on Incentives - The factors listed above have resulted in cash and tax incentives being offered by utilities and local governments in many states and provinces to encourage industrial, commercial and institutional users to reduce electricity consumption through the installation of energy savings equipment. Most incentives are for retrofit products that provide independently verifiable reductions in power consumption.

• Savings are Easily Verifiable After Installation - Because the ESM™ complements, but does not replace the primary controls, an accurate evaluation of the ESM performance can be measured at any time after installation of the ESM™ by switching the ESM™ off and comparing the kWh consumption with a similar period with the ESM™ operating. This is critical to qualifying for one of the many government or utility rebate programs.

• Ease of Installation - The ESM™ interfaces with and does not replace the existing air conditioning and refrigeration controls. Installations can be completed in as little as one day without any system interruption or impact on temperature.

• Proven Track Record - Abbotly together with licensed distributors in nine countries has installed 25,000 ESM's™ throughout the world since 1986. The ESM™ has undergone some very demanding third party testing and evaluations and has demonstrated significant energy savings in every test.