Exceptional PolyFuel Membrane Durability Enables Over 5,000-Hour Portable Fuel Cell Lifetimes; Crucial Customer Requirement Well Surpassed as Hydrocarbon Technology Keeps on Going.

MOUNTAIN VIEW, Calif. -- A critical milestone in the accelerating development of fuel cells for portable electronics applications, such as PDAs, cell phones, or laptop computers, was reached recently as fuel cell membrane leader PolyFuel, Inc. announced that its hydrocarbon DMFC (direct methanol fuel cell) membrane has passed the 5,000-hour mark in durability testing. Industry observers believe that commercially viable portable fuel cells must demonstrate lifetimes in the 2,000-3,000 hour range, a market barrier that PolyFuel has functionally eliminated for fuel cell manufacturers.

"Membrane durability has always been one of the key technical challenges faced by fuel cell manufacturers, as it translates directly to the lifetime of a fuel cell," said Jim Balcom, president and CEO of PolyFuel. "In applications targeted for portable fuel cells, consumers are acclimatized to battery lifetimes in the 2,000 to 3,000 hour range for their portable devices. Quite understandably, electronics manufacturers and fuel cell developers see this as a crucial benchmark." According to battery company product specifications, said Balcom, the charge-keeping capability of a typical lithium-ion battery degrades steadily over time and with use. After only one or two years of use, the runtime of a laptop or cell phone battery is reduced to the point where the user experience is significantly impacted.

For example, the runtime of a typical 4-hour laptop battery drops to only about 2.5 hours after 3,000 hours of use. By contrast, fuel cells built with PolyFuel's membrane continue to deliver nearly their original levels of runtime well past the 2,000 and 3,000 hour marks and are still going strong at 5,000 hours -- a fact that Balcom reports is delighting PolyFuel's customers.

Fuel cell membranes are painstakingly-engineered films of various plastic polymers -- resembling stiff cellophane -- that when covered with a catalyst material, enable fuels such as methanol or hydrogen to generate an electric current capable of powering electronic devices, or even automobiles. Unlike batteries, which must be recharged from a wall outlet, fuel cells are simply "resupplied" with a new fuel cartridge. As long as they have fuel they continue to generate power.

In the case of portable electronics, the methanol fuel -- a type of alcohol -- will come in the form of small, lightweight, snap-in cartridges that will share shelf space the world over with batteries and cigarette lighters.

Unlike automotive fuel cells, which still face substantial regulatory, deployment and technical challenges -- including membrane durability -- that will make them commercially impractical in the near term, portable fuel cells are nearly "in the zone," according to Balcom, where cost, performance, and durability will be equal to -- or better -- than users' expectations. Moreover, a ready -- even pent-up -- market demand exists. "Consumers are already demanding additional portable energy for their increasingly power-hungry devices," stated Balcom.

The Heart of the Fuel Cell

In addition to supporting the chemical reaction that generates electricity, the fuel cell membrane -- often called the "heart of the fuel cell" -- additionally separates the fuel, on one side, from air, on the other. The failure modes and lifetime considerations in a fuel cell revolve predominantly around the membrane and its innate durability. Throughout its working life, the membrane must retain its chemical and mechanical nano-architecture -- the microscopic characteristics that allow it to perform its electro-chemical magic.

PolyFuel's durability testing -- which consists of continuous, repetitive, "real-life" on-off power cycles on an array of different prototype fuel cells -- has shown no significant changes in the electro-chemical performance of its membrane, even after 5,000 hours in service. Similar tests, with similar results, have been performed, or are underway, at a number of PolyFuel's consumer electronics and battery manufacturer customers, according to Balcom.

Fuel cell membranes for portable applications fall into two families, depending upon the class of polymer that is used to manufacture them. DuPont's Nafion(R) -- an outgrowth of the U.S. space program 40 years ago -- is an example of a "fluorocarbon" membrane -- based upon polytetrafluoroethylene, the non-stick Teflon(R) coating used in frying pans, and the basis for Gore-tex(R) fabrics. By contrast, PolyFuel specializes in "hydrocarbon" membranes, the first example of which -- a DMFC membrane for portable fuel cells -- PolyFuel introduced in early 2004.

PolyFuel's hydrocarbon DMFC membranes have since been demonstrated to provide higher performance than the older fluorocarbon membrane technology, enabling portable fuel cell developers to design smaller, lighter, and less expensive fuel cell power supplies for portable electronics products. PolyFuel's DMFC membrane passed PolyFuel's previous durability milestone -- 3,000 hours -- in June 2005.

According to a new report from market researcher NanoMarkets LLC, 2006 is projected to be the take off year for mobile fuel cells, leading to a projected market size of US$1.1 billion by 2009 and US$2.6 billion in 2012.

An informative chart comparing the energy capacity of Lithium-ion Batteries (LIB) versus Direct Methanol Fuel Cells built with PolyFuel's Hydrocarbon DMFC Membrane can be found at http://www.polyfuel.com/pressroom/press_pr_103105_chart.html.

About PolyFuel

PolyFuel is a world leader in engineered membranes that provide significantly improved performance in fuel cells for portable electronic and automotive applications. The state of the art of fuel cells is essentially that of the membrane, and PolyFuel's leading-edge, hydrocarbon-based membranes enable a new generation of fuel cells that for the first time can deliver on the long-awaited promise of clean, long-running, and cost-effective portable power.

PolyFuel's unmatched capability to rapidly translate the system-level requirements of fuel cell designers and manufacturers into engineered polymer nano-architectures has led to its introduction of best-in-class hydrocarbon membranes for both portable direct methanol fuel cells and for automotive hydrogen fuel cells. Such capability -- based on PolyFuel's over 140 combined years of fuel cell experience, world-class polymer nano-architects, and a fundamental patent position covering more than 15 different inventions -- also makes PolyFuel an essential development partner and supplier to any company seeking to advance the state of the art in fuel cells. Polymer electrolyte fuel cells built with PolyFuel membranes can be smaller, lighter, longer-running, more efficient, less expensive and more robust than those made with other membrane materials.

PolyFuel was spun out of SRI International (formerly Stanford Research Institute) in 1999, after 14 years of applied membrane research. The company is based in Mountain View, California, and is publicly listed on the AIM stock exchange in London.

Editors' note: All trademarks and registered trademarks are those of their respective companies.

Additional background information is available at www.roeder-johnson.com.

This news release may contain forward-looking statements, including with respect to the development of the mobile fuel cell market. Readers are cautioned that such forward-looking statements involve risks and uncertainties, including, without limitation, risks inherent in the development and commercialization of potential products. Actual results may differ materially from the results anticipated in these forward-looking statements.

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