extending the length and modifying the scope of its existing grant program from TPC to include additional costs
related to the development of the Balance(TM) Hybrid Electric P1 parallel hybrid program. Azure's application
for an amendment totaling approximately $2.8 million has been submitted and is currently under review.
Management believes that this request will be approved sometime during the fourth quarter of 2009.
Third Quarter Product Development Updates
CitiBus(TM) (G1) Series (7,500 to 16,000 lbs. gross vehicle weight,
-------------------------------------------------------------------
"GVW")
------
- The 49 G1 Purolator fleet crossed over 1.2 million miles in service
- 28 G1 CitiBuses have been delivered and are in service
Balance(TM) Hybrid Electric (P1) Parallel (10,000 - 19,000 lbs. GVW)
--------------------------------------------------------------------
- In addition to notification from the IRS that the 2009 model
Balance(TM) Hybrid Electric qualifies for a $3,000 U.S. Federal tax
credit to eligible buyers, Azure received notification of
certification from California Air Resources Board (CARB) for the 2009
Azure Balance Hybrid E-450
- The EPA and CARB certifications are requirements for the Balance(TM)
Hybrid Electric to qualify for the California Hybrid Truck and Bus
Voucher Incentive Project (HVIP). The HVIP will provide vouchers of
$10,000 to $45,000 on a first-come, first-served basis for purchase
of each eligible new hybrid truck or bus. The program is anticipated
to be in effect January 2010
- Second generation prototype Lithium battery packs were received from
Johnson Controls-Saft and are running in the Azure development fleet
LEEP(TM) Freeze & LEEP(TM) Lift (Low Emission Electric Power)
-------------------------------------------------------------
- The field trial of LEEP(TM) Lift by AT&T in Kansas continued in the
quarter
- Customer demonstration trial of LEEP(TM) Freeze with Dreyer's Grand
Ice Cream, Inc. in Florida was completed within the quarter
- Engineering and production prepared for increased manufacturing rates
for LEEP(TM) Freeze in Q4 as a result of recent orders announced
Sales and Marketing Highlights:
- On July 17, Azure announced two new patents for innovations to its
proprietary hybrid electric drive trains. Azure Dynamics broad patent
portfolio includes 21 total patents issued or pending. The newest
additions address key value-adding components applicable to electric,
hybrid and PHEV vehicle drive trains.
- On July 22, Azure announced a partnership with Turtle Top, a leading
body manufacturer specializing in small to mid-sized buses and
specialty vehicles. The agreement provides Turtle Top customers and
dealers the opportunity to select Azure's Balance(TM) Hybrid Electric
drivetrain system on the Ford E-450 chassis.
- On August 20, Azure Dynamics announced that its shuttle buses will
service student and faculty needs at both the College of Staten
Island and the University of Fairfield. The College of Staten Island
is working to set a green example for its community. J & R Tours will
manage the second bus on behalf of the University of Fairfield in
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