MOPN CHALLENGE to the X CHALLENGE

April 13, 2011

In July of 2010, the X_PRIZE Foundation announced the Wendy Schmidt Oil Spill Cleanup X CHALLENGE, with the following goals as excerpted from the guidelines:

The goal of the Competition is to inspire a new generation of oil spill cleanup technologies that enable a more rapid pace of cleanup, and broaden the environmental conditions under which oil spill cleanup can take place.”

MOP Environmental was among the first companies to register and pay our filing fee of $3,500 to participate, submitted on Feb 14, 2011. We did so with a great deal of enthusiasm because it seemed, after months of frustration, watching the Deepwater Horizon spill turn into an environmental nightmare, while knowing full well that our product, indeed, held the answer to a manageable solution. With the X Challenge we believed that finally there would be an open-minded search for the truth. This would provide the opportunity for MOP Maximum Oil Pickup to compete against all current technologies on a level playing field, with a very good likelihood to win plus the benefit of publicity from our participation.

This letter is written to explain why MOP - in order to go public to protest the inequities of the X CHALLENGE - has found it necessary to withdraw from the competition.

To follow is a description of what actions we plan to take in light of our withdrawal and the advantages of so doing.

From the beginning, our nondisclosure agreement with the X CHALLENGE prohibited MOP Environmental from disclosing our participation. But, by withdrawing from the competition, we are no longer subject to the constraints of the nondisclosure agreement. We believe this offers many added benefits over a failure to withdraw.

As previously stated, the original promotional literature about the competition laid out the laudable goals of the competition and led us to believe that we would be a very strong contender for the X-PRIZE.

Upon review of the March 21, 2011 guidelines, we opened a dialogue with the technical director, Jeff Skipper. We asked Mr. Skipper to explain how they developed the guidelines and he stated that “Shell Oil representatives had provided them with the technical expertise to write the guidelines, because we just don’t have the expertise on staff.” This shocking admission probably reflects the fact that Mr. Skipper was not prepared to be asked this question and was unaware that it might be viewed as inappropriate for an oil company to be drafting the guidelines for an Oil Spill cleanup contest.

Ironically, the US EPA was not involved in drafting the guidelines and they have not been included in any phase of the competition. Mr. Skipper proudly stated that EPA was not included because the administrators did not want to have the environmental agency prejudice the process. For over 20 years, EPA has consistently been the most fair-minded agency in the process of analyzing methodologies for spill cleanup based on science and not politics.

As we described our technology to Jeff, his enthusiasm was evident. “This seems like exactly what we are looking for,” he said. Jeff indicated that there was flexibility within the guidelines and that revisions had already been made on a number of occasions. He asked us to write up a request for a change in the guidelines and stated that he would have it reviewed by the “prejudging panel technical team” and be back to us in two days. We then sent our letter (letter #1) to Jeff Skipper.

When Jeff Skipper had not called us four days later, we began calling him. When we finally reached him, there was a more subdued reaction with Jeff stating, it was not likely that they would accept our request for a change to the guidelines.

Though we were discouraged with our first attempt, Charlie was not ready to give up yet and he convinced Mr. Skipper to allow us to present the basis of our entry ahead of schedule to the X CHALLENGE Administrators in a last effort to convince them to open up the contest to a fair competition representing all the available environmentally sustainable technology. He (Skipper) gave us his word that they would look it over and get back to us within a few days.

The second letter also included a comparable methodology for measuring the sorbent performance for direct basis of comparison to that of skimmer technology:

Sorbent performance measurement methodology, stated briefly:

We would calculate the Oil Recovery Rate (ORR) by dividing the volume of oil removed by the total time required for the MOP deployment and retrieval. The measured time span would commence with deployment of MOP and end with the liftoff of the oil saturated MOP from the surface of the water.

We would calculate the Oil Recovery Efficiency (ORE) by dividing the volume of the oil extracted from the sorbent by the volume of the oil and water extracted from the sorbent times 100 to yield the percentage ORE. The extraction process would be accomplished using a high-speed screw press similar to what is used to extract cottonseed oil from cottonseed or rape seed oil from rapeseed.

All other Judging Criteria would remain the same i.e. exactly as stated in section 4.2 Phase 1 of the competition guidelines.

Five days later, during a conference call with other participants and the administrators of the X Challenge, we learned, to our surprise, that they would not re-consider the ban on sorbents. There was never any attempt made to explain their reasoning and they refused to respond to questions regarding their rationale.

On April 4, 2011, we withdrew from the contest under protest. MOP sent a letter to the administrators of the Wendy Schmidt Oil Spill Cleanup X Challenge.

The X Challenge was created in the wake of the failure of skimmers, booms and burning and an often ignored government mandate to prohibit the use of toxic dispersants (that severely endanger the oceans' aquatic life). These failed and ineffective methods of response prompted the X Challenge to search for the most environmentally safe answer to oil spills.

We believe MOP Maximum Oil Pickup uniquely satisfies all the prerequisite objectives of this initiative. The X Challenge, however, has arbitrarily and without good reason, categorically excluded our approach.

Our response

The X Challenge is scheduled to take place at the government approved test facility, referred to as Ohmsett, located in New Jersey.

We have contacted the Ohmsett facility to schedule a test of our MOP Maximum Oil Pickup to take place before to the X Challenge competition. It is our intent to prove that our product MOP Maximum Oil Pickup will outperform all the competition entered into the X Challenge in a true and fair head to head competition.

We expect to have an answer from the Ohmsett facility by this Friday, April 15.

This will be publicized as our Challenge to the Wendy Schmidt X Challenge.

It is our hope to call upon reporters and news agencies to deliver a story and to provide regular updates and details on our website and news blog.

Some of the issues that we will address are as follows:

1. Our MOP Maximum Oil Pickup, is capable of capturing up to 99% of the spilled oil (with an oil cleanup rate of up to 95% of the spilled oil for reuse) yet is prevented from entry and excluded from consideration. Why does the X Challenge competition set the extremeley low criteria of only 70% removal of oil (which favors skimmers)?

2. Our MOP Maximum Oil Pickup can be blown under an oil spill to operate under all weather conditions to irrespective of wave height, so why does the X Challenge provide for only 1 foot waves which are not a realistic typical ocean condition that would only favor skimmer technology, (please note, calm waters up to one foot waves favor skimmers)?

3. Our MOP Maximum Oil Pickup will operate irrespective of the thickness of the oil film on water so why does the X Challenge only choose a 1 inch thickness of oil which is again an unrealistic condition typically only used for a comparison of oil skimmers? (Oil skimmers will not operate under normal ocean conditions where the oil spreads into a thin film causing the skimmer to primarily pickup water.)

These, and other questions, will be addressed and brought to light explaining why our MOP Maximum Oil Pickup is the true technology that can accomplish all the real-life objectives of oil spill response.

Sincerely,

Charles M. Diamond

President