Marketing Strategy

AEC's go-to-market strategy is to achieve a leading position in the major market segments that we believe that we can penetrate rapidly, with relatively little difficulty and at modest cost. The factors evaluated in selecting the initial markets include market size, established competitors, distribution channels, ease of penetration (i.e. sales and marketing costs), certifications and licenses required, warranty, and service infrastructure needs and costs, to name a few.

Based upon AEC's evaluation of the various factors, we have targeted for initial penetration the Commercial Back-up power, On-site power and Micro-Technology power market segments. These markets are characteristically large and open, have well-established distribution channels and are readily accessible. All three have substantial energy requirements, right now. Based on these factors, AEC believes these three segments can be quickly entered while also representing the shortest time to revenue.

Targeted Phase II markets include: Technology Backup, Emergency Power, Marine Power, Bulk Hydrogen Gas sales and Vehicle Electric Power/Hybrid. The entire segment of Technology Back-up and Emergency Power has a very real demand currently, across North America (including most Caribbean nations and throughout most Western nations). Marine Power, though being a relatively small market, allows for high margins which can be readily accessed. Vehicle propulsion, due to the large amount of grant and other subsidized financing available, provides for another viable secondary market.

Prior to entering these initial markets, AEC is first introducing its hydrogen technology to a variety of sources, which include a number of commercial customers, major energy organizations and U.S. federal government contracting entities. These organizations will add the required imprimatur to the technology, along with an un-biased evaluation of its merits.

AEC plans to deploy its technology through various channels, specifically via direct relationships on a strategic alliance level to assist in testing, refinement and deployment throughout their network of customers and government agencies and access to certain Fortune 500 alliances. We additionally intend to create a targeted advisory panel and develop relationships with these key individuals as appropriate.

Upon establishing a secure position in its initial markets, AEC will consider additional markets as appropriate. AEC has divided its prospective major markets into four phases as follows:

PHASE I - IMMEDIATE IMPLEMENTATION: Large Markets that have more immediate need, require corporate action and resources:

• Commercial Back-Up Power
• On-site Power
• Micro-Technology Primary and Backup Power

PHASE II - SECONDARY IMPLEMENTATION: Upon establishing a solid marketing position in Phase I markets, Phase II markets may be selectively considered while not distracting from the market penetration of Phase I markets. Phase II market operations will be prepared during implementation of Phase I. They include:

• Technology Back-Up
• Marine Power Systems
• Emergency Power
• Bulk Hydrogen Gases Distributors & Customers
• Vehicle- Propulsion
• Vehicle- Electric Power/Hybrid
• Offshore Emergency Back-Up

PHASE III - MID RANGE MARKETS: Upon establishing solid control of Phase I markets and strong market position in Phase II markets, Phase III markets will be selectively developed. These will include:

• Residential Back-Up Power- Retrofit
• Off The Grid (Residential and Commercial)
• First Responder

PHASE IV - LONG RANGE MARKETS: These markets may be postponed for an extended period until they are ready for the technology (i.e. Residential Building Code revisions required, Municipal/Regional safety codes need to be finalized), and as prior phases are accomplished by the company.

• Government Back-Up Power
• New Residential Construction
• Offshore Brown Out
• Offshore Ecological