Alternative Fuel Technologies, Inc. Awarded Option to Phase I U.S. Army Contract

Alternative Fuel Technology, LLC, a wholly owned subsidiary of Alternative Fuel Technologies, Inc. (Pink Sheets: AFTC) announced today that the Company has been awarded a $50,000 option to its Phase I Army Small Business Innovation Research (SBIR) contract, which was completed in late July 2009.

This project involved accelerated testing and analysis of a high pressure fuel injection pump running on JP-8 jet fuel. The Army has a policy to use a single fuel (JP-8) for all of their "vehicles" and engine-powered equipment including turbine powered tanks, helicopters, trucks, HUMVEES, and generators.

"The Phase I accelerated testing identified very high pump component wear, creating the need for design improvements. These improvements will be made under a Phase II contract that has been accepted and is now in the final contracting stage," said James McCandless, Chief Executive Officer of Alternative Fuel Technologies, Inc.

The option award allows AFT to continue concept design work while a Phase II contract is formalized.

In the Phase II project, AFT will redesign the commercial diesel common rail pump to lower wear to acceptable levels. To accomplish this goal, AFT will apply materials technology and other lessons learned during the development of their well known DME common rail fuel system.

Phase II SBIR contracts typically range from $500,000 to $750,000 to further develop a concept, usually to the prototype stage. Proposals are judged competitively on the basis of scientific, technical, and commercial merit. Following completion of Phase II, small companies are expected to obtain funding from the private sector and/or non-SBIR government sources (in "Phase III") to develop the concept into a product for sale in private sector and/or military markets.

The Company is also engaged in other advanced fuel system projects for the U.S. Army to help resolve the durability and reliability problems JP-8 presents for many types of commercial fuel injection systems. AFT is uniquely qualified for these projects, as Mr. McCandless was a pioneer in this type of diesel fuel injection system.