The “Power Gap”, is defined as the difference in power
generation and power storage vs. power needs, and
continues to affect every facet of life dependent on
portable power. The Power Gap is a limiting factor in
providing consumers with a quality and worry-free
energy use experience, a critical shortfall in the event
of natural disasters where the lack of power can range
from being inconvenient to becoming life-threatening,
and the Power Gap becomes more pronounced by the
under-utilization of our planet’s renewable energy
sources.
Lithium-ion (Li-ion) battery technology has made
significant progress; however weight, recharge times,
safety and disposal issues still present challenges in
addressing the Power Gap dilemma. For example, Li-
ion batteries require a recharger, as well as access to
a fixed electrical grid for use.
Since fuel cells are instantly rechargeable, use bio-
generated, renewable sources for energy and enable
an off-the-grid experience, they have been identified as
the preferred solution. However, most research has
focused on the Proton Exchange Membrane (PEM)
based fuel cells. While PEM based fuel cells do
address some of the Power Gap issues, studies have
proven that they lack expected performance (low
power density) and reliability (air quality and humidity
issues). Additionally, high costs of the components,
and the proprietary manufacturing processes severely
limit their wide-scale adoption in consumer and mass
markets.
Neah Power Systems Solution
Neah Power Systems (Neah) has developed
proprietary porous silicon (Si)-electrode based fuel
cells that can provide renewable power generation for
consumers, industrial and military applications, as well
as storage opportunities for renewable energy
generation.
The Neah porous Si-electrode based fuel cell
• generates ~2X higher power density than PEM
• can operate in aerobic and anaerobic modes
• uses mainstream semiconductor processing
• enables an outsourced manufacturing model
Additionally, Neah has signed a purchase agreement
for Solcool, One, LLC, a direct current (DC) air
conditioning systems provider, which can run with
solar, wind, battery or electrical grid power. Solcool has
an established manufacturing partner in China, along
with a recognized distribution and support network,
with a backlog of orders. The company licenses
proprietary technology for the manufacturing of these
highly efficient solar air conditioning systems
Confidential and Proprietary
State of the technology and the company
Neah Power demonstrated a working prototype in
September 2007. Neah demonstrated a low volume
th
initial production system on June 26 2009, which
would act as the building block for our initial
market offering. Neah has continuous improvement
programs to increase energy density and reduce cost.
Neah has an outsourced manufacturing strategy, with
IceMOS Technologies to provide the silicon substrates,
with Aspen Technologies to assemble the cells that
generate power and with Sanmina-SCI to assemble,
test, and ship the final products. Neah’s ability to
leverage supplier world-class manufacturing facilities
makes Neah more capital efficient, and provides a
clear competitive advantage over other PEM based
fuel cell manufacturers.
Since FY2008, the company reduced its cash burn rate
by over 50% while making significant progress in its
fuel cell technology. In addition, the company made
made important improvements in its financial and
accounting processes and internal controls. The
company and the technology have won various awards
and been published in various forums.
Product Shipments
Neah completed development [of a prototype?]under
its second contract with the Office of Naval Research
(ONR) in September 2009. Neah has announced
customer agreements with Hobie Cat (sail boat and
catamaran company) to develop fuel cells for its
products. Neah is also working wiht another customer -
EKO Vehicles, Private Ltd (India), a large electric
scooter company. Neah has Letters of Intent with
these customers. Neah will also extend its current
solutions into energy storage technology, opening up
another renewable energy market opportunity.
Solcool, One has shipped more that 50 systems, and is
in the process of shipping additional units.
Market Opportunity and go-to-market strategy
Neah’s can offer its instantly rechargeable, methanol
fuel cells in a market estimated to be $10B/year (Frost
and Sullivan estimate for 2010) for military, industrial
and consumer applications.
The renewable energy storage sector is estimated at
$15B/year. One of the limitations faced by the
renewable energy (wind, solar, geothermal) sector is
lack of power storage technologies. Neah’s ability to
provide a high performance, low-cost, should enable
Neah to gain market share in this sector and through
Neah’s patent library (7 US, 4 pending US patent
applications) create a barrier for market entry by
potential competitors. The solar air conditioning, and
by extension, the off-the-grid power opportunity is
anticipated to be in the multi-billion dollar range.
Neah’s initial go-to-market plans will focus on high
need, high margin fuel cell markets where there is
1
limited competition. These include specialty customer relationships are in place, and the
applications like underwater and surface water vehicles outsourced (capital efficient) manufacturing supply
and remote monitoring systems. These markets are chain has been defined.
estimated in the $60M - $100M/yr range, and serve as
the market entry point for the technology. Beyond this,
Neah will pursue the larger military, industrial and Contact for additional information and follow up:
consumer markets. This staggered market entry
Chris D’Couto Ph.D.
strategy will allow Neah to manage growth, qualify the
technology, manufacturing, and supply chain, and President and CEO
systematically ramp up production.
425 482 9263 (ph)
Synergies of the SolCool, One acquisition 206 819 4582 (cell)
cdcouto@neahpower.com
SolCool, One has a strong distribution network that can
be used to sell Neah’s products. Additional synergies
include adding a fuel cell to the solar air conditioning
system in order to extend the off-the-grid duration of
the product. A solar panel/lithium-ion/fuel cell
integrated system will also be developed for use as
backup/Uninterruptible Power Supply (UPS) or Remote
Area Power Supply (RAPS).

Management team and BOD

Neah has a strong, lean, academically trained

management team with relevant industry expertise and
connections. The company’s Board of Directors (BOD)
is made up of industry veterans, an investment banker,
and technology visionaries. The strategic advisory
board has military, technical and entrepreneurial
experts.

Previous funding sources

~$36M has been invested into Neah, by private
investors (~$19M from Intel Capital, Novellus Systems,
Castile Ventures, Alta Partners, Frazier Ventures, and
West AG), public investors (~$10.5M), and research
grants (~$6.5M). Neah has most recently received two
ONR (branch of the Department of Defense) grants
totaling $2.49M. With a market cap of ~$22M, new
investors can benefit from these prior investments.

Current capitalization
As of February 16, 2010, Neah had 37,302,609 shares
issued and outstanding. Based on filings with the
Securities and Exchange Commission, major
institutions include Summit Trading Partners holding
5,085,756 shares and World Green Trust holding
4,823,060 shares.

Why Neah will be successful

Neah has a strong, core-competence based
organization, management, and BOD, plus an advisory
board well connected within the industry. The fuel cell
technology is differentiated and proven. The
opportunity is large and the initial sales strategy
leverages the company’s unique technology in a
market where there is limited competition. Preliminary
Confidential and Proprietary 2