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/FIRST AND FINAL ADD -- NY098 -- BATTERY TECHNOLOGIES INC./

 Company Background
 Dr. Kordesch developed the first alkaline battery during the 1960s while working for Union Carbide (Eveready) and subsequently discovered the potential to recharge the alkaline battery. Eveready viewed a potential rechargeable battery as competition to its growing single-use alkaline battery market and therefore chose not to pursue its development. Dissatisfied with this decision, Dr. Kordesch left Eveready for the University of Graz in Austria where he began work on a rechargeable alkaline battery. In 1986, he co-founded Battery Technologies Inc. with another respected scientist and former student, Dr. Klaus Tomantschger.
 Battery Technologies was founded with a clearly defined mission: the development of a low-cost, environmentally friendly Rechargeable Alkaline Manganese (RAM) battery system, to patent the system, and to market manufacturing licenses to battery manufacturers around the world. So far, the company has succeeded in this mission.
 -- The company has developed a commercially viable cylindrical 1.5 volt rechargeable alkaline battery with superior performance characteristics including shelf-life, cycle-life, voltage, cost, discharge capacity, and final disposal.
 -- The technology has a total of 14 patents; another 15 patents have been filed.
 -- The company has signed six licensing agreements, including one with Ray-O-Vac, the third largest and fastest growing battery producer, and expects to sign 3-4 more in 1993.
 The company has an ongoing scientific relationship with the Technical University of Graz, Austria, where Dr. Kordesch is still affiliated as a consultant. This relationship is key to providing the company with a cadre of scientists capable of developing the second, third and fourth generation RAM batteries and to continue the patent process.
 The Rechargeable Alkaline Manganese (RAM) Battery Technology
 As discussed, Dr. Kordesch discovered the potential for a rechargeable alkaline battery while still working for Eveready. Eveready, however, chose not to pursue the development of this battery and Dr. Kordesch left the company. Today, under the direction of Dr. Kordesch, Battery Technologies has successfully developed a rechargeable alkaline manganese (RAM) battery which is both performance and cost competitive with existing alkaline, heavy-duty carbon zinc, and nickel cadmium batteries.
 The RAM technology is an evolution of the basic single-use alkaline battery. The materials and the process are similar except for the following differentiating factors:
 -- The RAM battery has a specifically designed separator between the cathode (+) and the anode (-) which enables the flow of ions during charging and discharging. The separator also prevents dendrite build-up that can cause the battery to short-circuit.
 -- The RAM battery contains a different ratio of active materials. Its unique ratio is one of the reasons why the battery can be recharged multiple times, but is also the reason why the battery only offers 80 per cent of the energy density of an alkaline battery in the first charge.
 -- The RAM battery includes expanders and catalysts in the cathode to limit expansion and contraction during discharge and recharge over many cycles.
 -- The RAM battery contains oxygen/hydrogen recombination catalysts that facilitate the recombination of oxygen with the anode and hydrogen with the cathode to maintain low pressure in the battery cells.
 -- The RAM battery also contains certain metallic and organic corrosion inhibitors that greatly reduces the evolution of hydrogen over extended time periods.
 These electrochemical changes have created the next-generation alkaline battery, which is both performance and cost competitive with other leading batteries, as the following table shows:
 ABSOLUTE PERFORMANCE Lithium
 Recharge Mang
 Single-Use Carbon Alkaline Dioxide
 Alkaline(1) Zinc(2) (BTll)(1) (ULBI)(2)
 Energy Density:
 by Weight (wh/kg) 96 22 80 262
 by Volume (wh/l) 200 40 170 406
 Power Density:
 by Weight (w/kg) 54 N/A 45 N/A
 by Volume (wh/l) 150 N/A 130 N/A
 Cycle Life 1 1 50-300 1
 Self-Discharge
 (pct/mth) 1pct 6pct 1pct 1pct
 Production Cost
 ($/wh) $0.27 N/A $0.30 N/A
 In terms of relative performance, the price/performance characteristics are even clearer, as demonstrated below:
 CONSUMER ELECTRONICS MARKET
 Relative Performance
 Lithium
 Recharge Mang
 Single-Use Carbon Alkaline Dioxide
 Alkaline (1) Zinc (2) (BTII)(1) (ULBI)(2)
 Energy Density:
 by Weight (wh/kg) 100pct 23pct 83pct 273pct
 by Volume (wh/l) 100pct 20pct 85pct 376pct
 Power Density:
 by Weight (w/kg) 100pct N/A 83pct N/A
 by Volume (w/l) 100pct N/A 87pct N/A
 Production Cost
 ($/wh) 100pct N/A 111pct N/A
 Source: (1) Battery Technologies, (2) Ultralife Batteries.
 Marketing Strategy
 Battery Technologies has chosen not to become a primary manufacturer of its battery. Instead, the company will continue to focus on research and development to improve the RAM technology and develop it for application in markets other than the small-format market. The company believes that using a licensing strategy is the most effective method for achieving the greatest market penetration and industry acceptance of RAM products. To facilitate its licensees, Battery Technologies has established a relationship with Hibar Systems Ltd. to construct turnkey RAM battery manufacturing operations.
 Licensing Agreements
 Battery Technologies has been successful in signing licensing agreements with six companies, including Ray-O-Vac Corporation, the third largest and fastest growing battery manufacturer in the United States. The company anticipates signing an additional 3-4 contracts within the next year.
 The licensing agreements are structured to give the licensee the exclusive right to manufacture RAM batteries in a negotiated territory and to allow it to market the product anywhere in the world. In return, Battery Technologies receives revenues in each of the following ways:
 1 . an initial license fee of up to US$1 million;
 2. guaranteed minimum royalty payments from each licensee in the


amount of US$500,000 in year one, US$1 million in year two, US$2 million in year three, and US$3 million thereafter; and
 3. a 2.5-3.0 percent royalty on net sales of RAM batteries in excess of the guaranteed royalty payment.
 In addition to the license and the manufacturing equipment, Battery Technologies also offers licensees a variety of short- and long-term service assistance in start-up and ongoing operations. These services include: assistance with government financing; advice in hiring for technical and administrative personnel; marketing and wholesale distribution assistance.
 Manufacturing Assistance
 Battery Technologies has established a relationship with Hibar Systems Limited of Ontario, Canada for the supply of turnkey manufacturing facilities to the company's licensees. Hibar is a specialized engineering and manufacturing company, supplying equipment in the areas of processing, assembly and packaging. Its equipment is well-regarded by customers in the battery industry, including Duracell, Eveready, Ray-O-Vac, Toshiba, Sanyo, and Varta. This arrangement will help Battery Technologies maintain quality control of its product.
 Hibar will deliver Battery Technologies' licensees a fully warranted, turnkey manufacturing facility within 16 months of order. The cost of a turnkey facility that includes five assembly lines will be approximately $22 million and will be capable of producing more than 200 million batteries annually. BTI will earn a 7-1/2 percent commission fee for each turnkey installation purchased by a licensee.
 Each turnkey plant will be capable of producing four types of RAM batteries, including AAA, AA, C and D sizes. The combined output of each of these five production lines (2 AA lines) should be 200 million batteries per year at approximately 40 million batteries per production line. At an average wholesale price of $1.00 per battery, this equates to $200 million in revenues per plant per year, which would net Battery Technologies approximately $6 million in annual royalty income. Furthermore, these figures suggest a very short payback period on the production plant assuming full utilization. The company points out that the first Canadian licensee believes its production for the first year is already sold out. During construction, the licensee's personnel will begin manufacturing operations training at a Hibar prototype facility and at Battery Technologies' research and development laboratories.
 BATTERY TECHNOLOGIES, INC.
 Annual Income Statement
 (C$ millions)
 Fiscal Year
 Ends 12/31 1991A 1992E 1993E 1994E 1995E
 Revenues:
 License Fees 0.570 0.500 3.000 3.000 4.000
 Royalties -
 Existing
 Contracts 0.025 0.444 2.000 4.500 9.000
 Royalties -
 New Contracts 0.000 0.000 0.500 1.000 4.000
 Other
 Commission 0.000 0.144 0.000 1.275 1.275
 Total Revenues 0.595 1.088 5.500 9.775 18.275
 Expenses:
 General &
 Adminis-
 tration 0.903 1.333 1.200 1.300 1.400
 Royalty
 Expense 0.232 0.022 0.000 0.000 0.000
 Salaries &
 Benefits 0.422 0.289 0.000 0.000 0.000
 Professional
 Fees 0.363 0.530 0.100 0.100 0.100
 R & D
 Expense 0.433 0.953 0.200 0.200 0.200
 Technology
 Protection 0.151 0.131 0.100 0.100 0.100
 Depreciation &
 Amortization 0.021 0.029 0.000 0.000 0.000
 Total Expenses 2.526 3.287 1.600 1.700 1.800
 Operating
 Income (1.931) (2.199) 3.900 8.075 16.475
 Other (Income)/
 Expense:
 Interest &
 Bank Charges 0.069 0.004 0.000 0.000 0.000
 Interest
 Income (0.251) (0.270) 0.000 0.000 0.000
 Rental &
 Other (0.690) (0.936) 0.000 0.000 0.000
 Total Other
 (Income)/
 Expense (0.872) (1.202) 0.000 0.000 0.000
 Equity income
 from R&D (1.178) 1.434 0.000 0.000 0.000
 Equity income
 from EBS 0.075 0.030 0.000 0.000 0.000
 Premium on
 Acq. of
 Royalty
 Rights 0.000 (2.800) 0.000 0.000 0.000
 Gain on
 Disposal of
 Battery Tech 0.000 0.165 0.000 0.000 0.000
 Pre-tax income (2.161) (2.168) 3.900 8.075 16.475
 Income Taxes 0.000 0.000 0.000 0.000 0.000
 Net income b/f
 Extra. item (2.161) (2.168) 3.900 8.075 16.475
 Earnings Per
 Share b/f
 Extra. Item ($0.17) ($0.11) $0.18 $0.37 $0.75
 Avg. Share
 Outstanding 12.714 20.514 22.000 22.000 22.000
 PERCENT OF
 REVENUE
 ANALYSIS
 G & A Expense 151.8 122.5 21.8 13.3 7.7
 pct pct pct pct pct
 Salaries &
 Benefits
 Expense 70.8 26.6 0.0 0.0 0.0
 pct pct pct pct pct
 Professional
 Services
 Expense 61.1 48.7 1.8 1.0 0.5
 pct pct pct pct pct
 R & D Expense 72.9 87.6 3.6 2.0 1.1
 pct pct pct pct pct
 Total Expenses 424.5 302.1 29.1 17.4 9.8
 pct pct pct pct pct
 Operating
 Income (324.5) (202.1) 70.9 82.6 90.2
 pct pct pct pct pct
 Other (Income)/
 Expense (146.6) (110.5) 0.0 0.0 0.0
 pct pct pct pct pct
 Pretax income (363.2) (199.3) 70.9 82.6 90.2
 pct pct pct pct pct
 Net Income (363.2) (199.3) 70.9 82.6 90.2
 pct pct pct pct pct
 PERCENTAGE
 CHANGE
 Revenues - (12.3) 500.0 0.0 33.3
 pct pct pct pct
 G & A Expense - 47.5 (10.0) 8.3 7.7
 pct pct pct pct
 Salaries &
 Benefits
 Expense - (31.4) (100.0) No. DIV/0! No. DIV/0!
 pct pct
 Professional
 Services
 Expense - 45.9 (81.1) 0.0 0.0
 pct pct pct pct
 R & D Expense - 119.9 (79.0) 0.0 0.0
 pct pct pct pct
 Operating
 income - 13.9 (277.4) 107.1 104.0
 pct pct pct pct
 Other (Income)/
 Expense - 37.8 (100.0) No. DIV/0! No. DIV/0!
 pct pct
 Pretax Income - 0.3 (279.9) 107.1 104.0
 pct pct pct pct
 Net Income - 0.3 (279.9) 107.1 104.0
 pct pct pct pct
 Avg. Shares
 Expense - 61.3 7.2 0.0 0.0
 pct pct pct pct
 Earnings Per
 Share - (35.3) (263.6) 105.6 102.7
 pct pct pct pct
 -0- 3/15/93 AA NY098
 /PRNewswire -- March 15/
 /END FIRST AND FINAL ADD/


CO: Battery Technologies Inc. ST: Ontario IN: SU: ERN

CK -- NY098A -- 6324 03/15/93 20:15 EST
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Date:Mar 15, 1993
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