Power Paper Completes $15 Million Series D Fundraising Round; New Investor Amadeus Capital Partners Leads Round.

Business Editors

TEL AVIV, Israel--(BUSINESS WIRE)--July 21, 2003

Power Paper Ltd., a leading provider of thin and flexible micro-power source technology and devices, today announced that it has completed a $15 million fundraising round, the company's fourth round of financing. Amadeus Capital Partners Ltd, a UK-based technology investor, led the financing round, which also includes investments from Banc America Capital Partners (US), the PolyTechnos Funds (Germany), Millenium Materials Technologies Funds (Israel), Toppan Forms (Japan), Yasuda Enterprise Development Co. (Japan) and other current shareholders.

Power Paper develops thin and flexible, environment-friendly energy cells, which are used in a growing number of innovative applications such as active cosmetic patches, smart toys, and active radio frequency identification (RFID) labels.

Since its inception in 1997, Power Paper has raised $29 million. The current cash infusion of $12 million is an extension of a $3 million financing announced in October 2002, bringing the total Series D round to $15 million.

"We are extremely pleased to have raised such a significant amount, which we expect to be our last before reaching profitability," said Shalom Daskal, Power Paper CEO. "The backing of our new and existing investors will enable Power Paper to reach new heights in the ongoing commercialisation efforts of our thin and flexible micro-powered products as well as in the continued development of our core micro-power source technology."

Power Paper plans to use the funds to expand the operations of its four divisions - PowerNovelties(TM), PowerCosmetics(TM), PowerID(TM), and PowerInks(TM) - and to develop new complementary and synergetic business lines, such as medical applications and other applications using next-generation smart materials. The company recently moved to new headquarters in Petah Tikvah, Israel, a suburb of Tel Aviv. To date, the company has nearly 60 employees, and it expects to increase its headcount significantly within the next few months.

The financing comes on the heels of a number of strategic partnerships completed by Power Paper, including deals with Toppan Forms, a global leader in business communications and printing solutions, and Graphic Solutions Inc., a global ISO QS9000-Certified custom print house, as well as recent product launches with Hasbro (NYSE: HAS) and others.

Amadeus' Investment Manager Barak Maoz, who will join the Power Paper board of directors stated, "Power Paper is an exceptionally well managed company, developing unique technology that will revolutionize businesses and services in several sectors. Although there are other micro-power products currently in development, none offers the combination of flexibility, low cost, ease of manufacturing and environmental friendliness of Power Paper's technologies. We are confident that Power Paper is at the forefront of this exciting new area, as evidenced by the exceptional range of partnerships it has already established."

Power Paper was recently selected as one of the most promising and innovative startups in Europe by Tornado Insider Magazine. The Tornado100 list, which is detailed in the magazine's May issue, profiles Power Paper and the other 99 most promising and innovative emerging companies in the European IT and biotech sectors.

About Power Paper

Power Paper Ltd., founded in 1997, is a leading provider of micro-power source technology, which addresses a growing trend across a wide range of industries towards ultra-thin and flexible micro-powered devices. Power Paper's patented, thin and flexible energy cells can be adapted to fit the size, thickness and form factors required for the design of any product. These environment-friendly, safe batteries require no metal casing, and can be printed cost-effectively directly onto paper, plastics or other surfaces by standard printing equipment. Licensing and know how agreements allow Power Paper's partners and customers in the United States, Europe and Asia to utilize the company's award-winning technology to produce millions of cells every year. Based on this technology, the company has developed a number of innovative applications for its PowerCosmetics, PowerNovelties, and PowerID product lines, as well as a line of PowerInks for authorized manufacturers. For more information, please visit www.powerpaper.com.