PolyFuel Sets New Record For Portable Fuel Cell Performance -- Again.

New, Ultra-thin 20-Micron Membrane Material Beats PolyFuel's -- and Industry's -- Best by 40%

MOUNTAIN VIEW, Calif. -- PolyFuel, Inc., a world leader in engineered fuel cell membranes, revealed today that its new, ultra-thin membrane delivers over 40% more power than any fuel cell membrane previously available. The new 20-micron hydrocarbon membrane, when used in direct methanol fuel cells (DMFC) being developed for micro power applications such as notebook computers and cell phones, produces an unprecedented 200 milliwatts of peak power per square centimeter of material at 70C -- a level which allows for a significant reduction in the size, weight and cost of the fuel cell "stack", a key component in the fuel cell system. Such small fuel cell power supplies are being developed by leading manufacturers to deliver the extended runtimes that consumers desire from their portable electronic devices.

Fuel cell membranes -- often called the "heart of the fuel cell" -- allow an electrochemical reaction to occur that generates electricity directly from a solution of fuel -- in this case a combination of readily-available methanol -- and water. Previous records in this area were set by another PolyFuel hydrocarbon membrane, one 45 microns thick, from which 140 milliwatts of peak power per square centimeter was obtained at similar conditions. Other materials, such as fluorocarbon membranes -- considered by many to be at their "end of life" stage -- have not been able to demonstrate such high power while maintaining acceptable efficiencies.

The new membrane also allows more than twice the amount of water to diffuse through it than previous membranes, which can simplify the design of the fuel cell. During operation, water in the fuel-water solution is consumed on one side of the membrane -- the anode -- only to reappear on the opposite side -- the cathode -- as a by-product. PolyFuel's new membrane allows the water to diffuse back from the cathode to the anode, where it can once again participate in the reaction. This "molecular-level recycling" can eliminate the need for pumps, which are especially problematic in products intended for smaller applications such as cell phones or PDAs.

Samsung engineers indicated recently that the new membrane is a breakthrough from their perspective. They recently conducted a rigorous series of tests on every fuel cell membrane that they could find, and PolyFuel's 20 micron material outperformed all of the others in terms of its combination of power and efficiency. Samsung is among the leaders in consumer electronics in trying to find alternatives to extend the runtime for portable electronic devices, which, with the rapid rise in consumer-demanded features such as video, are becoming increasingly power hungry -- beyond the capabilities of even today's best available batteries.

Moreover, the recent unfavorable publicity that such batteries have received due to catching fire while in service in laptop computers -- and the resultant high-profile product recalls - is only hastening the search for alternative long runtime power supplies. Micro power fuel cells are viewed by many as the best, and increasingly viable, solution.

Said one of Samsung's Principal Engineers, "A fuel cell can never deliver too much power, or be too efficient. We expect that the new material, plus the strong support that PolyFuel is providing, will enable us to achieve a new performance milestone."

The market for handheld devices alone is currently estimated at over one billion units per year, and includes mobile phones, handheld industrial computers, printers, scanners, and various communications and surveillance devices used in homeland security applications. Each of these requires a reliable, long-running power source.

Because of this demand, coupled with recent improvements in fuel cell design and manufacturing technologies, it is widely believed that a commercial portable fuel cell market is imminent. A 2006 report from Frost and Sullivan, for example, has predicted that sales of consumer portable fuel cells will reach over 38 million units by 2009, with commercial product introductions projected to begin in the 2007 to 2008 timeframe. Virtually every major consumer electronics company and battery company worldwide has extensive, internal fuel cell development efforts underway.

PolyFuel was the world's first company founded specifically to nano-engineer exotic membranes for fuel cells, and rapidly rose to a widely-acknowledged leadership position. Now, with the introduction of its ultra-thin, high-performing 20-micron membrane, fuel cell developers and manufacturers have a wide range of PolyFuel membranes to meet differing design criteria.

Unlike "legacy" fuel cell membranes made from fluorocarbon polymers such as the one found in non-stick Teflon[R], PolyFuel's higher-performing membranes utilize a hydrocarbon polymer chemistry. Jim Balcom, Chief Executive Officer of PolyFuel, commented: "The characteristics of PolyFuel's hydrocarbon membrane chemistry, such as high power density, low methanol crossover, and now high water back diffusion, allow for significantly improved flexibility in the design of portable fuel cells."

The performance results achieved by PolyFuel's new 20 micron membrane were obtained using a commercially-available Johnson Matthey catalyst, and commercially-available gas diffusion layers (GDLs). Total catalyst loading was 5.6 milligrams of platinum per square centimeter.

About PolyFuel

PolyFuel (www.polyfuel.com) is the world leader in engineered membranes that provide significantly improved performance in direct methanol fuel cells (DMFC) and hydrogen fuel cells, particularly for portable electronic and automotive applications. The state of the art of fuel cells is essentially that of the membrane, and PolyFuel's best in class, 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 has an unmatched capability to rapidly translate the system-level requirements of fuel cell designers and manufacturers into engineered polymer nano-architectures. Such capability -- based on PolyFuel's over 150 combined years of fuel cell experience, world-class polymer nano-architects, and a fundamental patent position covering more than 23 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 is working with most of the world's leading portable fuel cell system developers, the majority of whom are household brand name consumer electronics manufacturers. To-date, every company that has completed their evaluation testing of PolyFuel's membrane has gone on to purchase PolyFuel's membrane products. Several of the largest Japanese and Korean consumer electronics companies rank PolyFuel's membrane as the best portable fuel cell membrane available in the world today. To date, Sanyo, NEC and now Samsung have disclosed they are using PolyFuel membranes.

PolyFuel was spun out of SRI International (formerly the 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 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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