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***FOR IMMEDIATE RELEASE***

NEW, THIN POLYFUEL MEMBRANE BOOSTS DMFC FUEL CELL PEAK PERFORMANCE BY 33%

Higher Conductivity, Increased Water Back-diffusion Among Benefits of Benchmark-setting 45-micron Membrane

MOUNTAIN VIEW, CA and TOKYO, JAPAN – DECEMBER 15, 2005 – PolyFuel, Inc., a world leader in fuel cell membranes, announced here today a new, thinner fuel cell membrane that delivers the highest power levels ever demonstrated for passive direct methanol fuel cells (DMFCs). The new hydrocarbon DMFC membrane, with a thickness of 45 microns, delivers 33% more power than the previous industry benchmark, PolyFuel's own 62-micron PolyFuel membrane, which is being utilized or studied worldwide by original equipment manufacturers (OEMs), particularly in Japan. The significantly-reduced thickness increases performance by reducing the resistivity of the membrane, while allowing a higher level of water back diffusion. (See also: Broadcast TV, Movies on Cell Phones get Boost from Fuel Cell Technology Advance, December 15, 2005, http://www.roeder-johnson.com/RJDocs/PObroadcasttv1215.html).

"PolyFuel has been working very hard with OEMs to refine its membrane technology to meet their specific needs," said Jim Balcom, president and CEO of PolyFuel. "Perhaps the most requested feature has been a thinner membrane that retained the methanol crossover, water crossover and durability advantages of our 62-micron membrane, while meeting aggressive, new fuel cell performance targets. We are pleased that we have been able to specifically engineer a membrane to meet these requests."

According to Balcom, the new 45-micron membrane's peak electrochemical performance in passive hardware at 40C is 80 milliwatts per square centimeter of membrane (80mW/cm2) at 0.28V versus 60mW/cm2 for the 62-micron membrane — a 33% improvement that results directly from the 27% reduction in thickness.

Other specifications of note are as follows:

Test results were obtained on fixtures with fully-passive cathodes, at 40C. Catalyst loading was 8 mg/cm2; gas diffusion layer layers (GDLs) were SGL 10 BA and SGL -10 BC.

Balcom further revealed that in Japan, PolyFuel is now working with six major corporations that are developing DMFC systems, including NEC and SANYO Electric. Of these six, five are already evaluating the 45-micron membrane for near-term commercial use, including conducting extensive durability and performance testing. All are agreed, said Balcom, that PolyFuel's hydrocarbon membranes have been very helpful to their DMFC system development efforts.

The new membrane will be available in both a hot-bondable version, and a conventional version.

About PolyFuel

PolyFuel is a 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 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's target customers are the world's leading portable fuel cell system developers. Of the 17 such customers currently engaged, 11 are divisions of household brand name consumer electronics manufacturers, and fifteen of the seventeen are now testing or have tested PolyFuel's fuel cell membrane material. Of the 15, eleven have completed their evaluation testing and all eleven have gone on to purchase PolyFuel's membrane products. Five of the largest Japanese and Korean consumer electronics companies now rank PolyFuel's membrane as the best portable fuel cell membrane available in the world today.

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.