MICRO-FUEL CELL® POWER SUPPLY

The Micro-Fuel Cell®Power Supply--This invention is a simple high energy per unit mass fuel cell electrical power system for cellular phones, portable computers and portable electrical devices. We believe this is the best initial consumer niche market for fuel cell technology, rather than larger power systems. The micro-fuel cell utilizes vacuum thin film deposition techniques to coat pattern etched-nuclear-particle-track plastic membranes. The process forms catalytically active surface hydrogen/oxygen electrodes on either side of a single structured proton-exchange-membrane electrolyte. A series stack of cells is built onto a single structured membrane by geometrically engineering the cells on the membrane to allow through-membrane contacts, through-cell water control, thin film electrodes, and electrode breaks. These production techniques are well suited to roll-to-roll production processes and minimize the use of expensive catalysts. To improve reliability, an integrated system of fault correction is used to ensure the operation of the cell stack if there is cell damage. The fuel cells will be directly fueled with liquid hydrocarbon fuels such as methanol and ethanol, by incorporating new direct conversion catalysts. The Micro-Fuel Cell® bridges the final gap in portable electronics with an energy source that is smaller, lighter, simpler, cleaner, and less expensive.

Smaller--The Micro-Fuel Cell® packs more energy in a smaller space than conventional rechargeable batteries. The methanol fuel has effectively 5 to 13 Whr per cubic inch (20% to 50% efficiency) energy density. This is 3 to 9 times the energy density of today's best nickel cadmium batteries, and 40 to 120 times that of standard cellular phone battery packs.

Lighter--The Micro-Fuel Cell® is lighter than conventional rechargeable batteries. The methanol fuel has effectively 1200 to 3000 Whr per kg energy per unit mass (20% to 50% efficiency). This is 30 to 75 times the Whr per kg of today's cell phone nickel cadmium batteries. This is also 2 to 5 times the 600 Whr per kg quoted for the latest rechargeable lithium ion batteries (Science News, March 25, 1995). The first ERD micro-fuel cell is designed to replace the standard cellular phone battery packs.

Simpler--Conventional cell phones usually have a warning alert signal when the battery is low. But when will it go off? Will it go off? How much more time is left? The ERD micro-fuel cell eliminates this uncertainty . Checking the fuel supply is as simple as looking at the liquid level in the fuel tank. Refueling would also provide instant recovery.

Cleaner--The Micro-Fuel Cell® is the "green" solution to energy needs. It is never thrown away, but rather refueled with common ethanol or methanol, an abundant and renewable energy source. The production process and the disposal of manufacturing by-products do not present major toxic waste problems.

Less Expensive--Components of the Micro-Fuel Cell® are inexpensive. Manufacturing and assembly cost are anticipated to be low (Specific details and cost breakdowns are proprietary.)

• Mass produced product cost: $5.00

We have completed Micro-Fuel Cell® tests that show each separate component of the cell is feasible. Cost estimates were extrapolated from these tests. We demonstrated a hydrogen fuel cell running a cellular phone in March, 1995. Small alcohol fuel cell test cells have been ongoing. In November 1995 we achieved running a portable phone at ambient conditions with an alcohol powered fuel cell array (16 cells in series). This array achieved a power output of 1.7 milliwatts at 4.37 Volts and charged a battery to run a phone discontinuously. By December of 1998 we succeeded in running a cellular phone continuously in standby while trickle charging a battery to make periodic phone calls. We were able to achieve 100 milliwatts of output from the fuel cells. We have received diffusion measurement results through a Cooperative Research and Development Agreement (CRADA) with Los Alamos National Laboratory on our unique proprietary electrolyte that confirmed that we preferentially reduced the critical fuel cross over rate of methanol with respect to hydrogen by a factor of 3.1 in January 1997, and by a factor of 100 in June 1997. Through the CRADA we also had a confirmation of increasing our surface area of our electrodes. A paper titled: "Micro Fuel Cell" on this CRADA was presented at the November 1998 Boston meeting of the Electrochemical Society.

Patents—Manhattan Scientifics Inc. (MSI) owns the core patents (U.S. 4,673,624 issued June 16, 1987, U.S. 5,631,099 issued May 20, 1997, and US Patent 5,759,712 June 1998.) for a catalyst optimized and direct hydrocarbon fuel cell based on etched nuclear particle track membranes and vacuum deposited electrodes. World PCT applications are filed. ERD has two US fuel cell patents pending for application devices and larger power systems. Micro-Fuel Cell, Micro-Fuel, Green Cell, Power Holster and Hockaday Fuel Cell are registered trademarks. MSI has a dominant property and technology position in micro-fuel cells. The technology and patent portfolio are being developed by Energy Related Devices Inc. (ERD) through a contract with Manhattan Scientifics.

Competition--Two U.S. patents, 5432023 issued in 1995 and 5364711 issued in 1994, were recently assigned to the Toshiba Corporation. The stated objective for these patents was for a miniature fuel cell for "office automation equipment, audio equipment, and radio equipment." There are 12 inventors listed in these lengthy patents, indicating serious product development by Toshiba. These patents are not a hindrance to ERD.

Recently Medis El Ltd. an Israeli company has stated their "immediate market focus is on small fuel cells for cell phones, pager, computers, and like products." They have stated their target to be a fuel cell that can run a cellular phone for 400 hours between "recharges". At this time we do not know what reactants they are using in the fuel cells. Their critical technology appears to be an electrically conductive polymer in the electrodes. We need to learn more to assess if this technology is competitive or complimentary to ours.

Cellular Phones--Although micro-fuel cells have the potential to replace nickel cadmium rechargeable batteries in many applications, and batteries in general, there are two characteristics that make them particularly well-suited for cellular phones.

• The cellular phone requires only about one tenth of a watt of power in stand-by mode.

• "CONVENIENCE" and "SAFETY" are the marketing bywords used to promote cellular phones. Yet there is still the inconvenience of ensuring the nickel cadmium batteries are charged. Despite what advertising promises, executives can have important business calls interrupted by the low battery warning. And people have emergencies that cannot be handled by a cellular phone with a dead battery. With their higher energy capacity micro-fuel cell powered phones could be left "on" all the time and end the "discharge fear." The micro-fuel cell would enable cellular phones to reach their full potential.

Market Size--The Cellular Telecommunications Industry Association states:

Newsweek (April 3, 1995)

This translates to roughly a 1 billion dollar market per year for the original power pack purchases and this does not even consider the replacement market. The additional fuel cell replacement battery market for portable computers, video tape cameras, and traction batteries further presents about a $0.5 billion dollar opportunity.

Preferred Development Arrangement--For the first year prototype development our estimated costs are $1 million. We have this commitment from Manhattan Scientifics. Once the prototype has been developed we believe the ideal situation is to then partner with a major manufacturer. Financing the proto-production could be through the equity/investors or non-equity capital from the manufacturing partner. An early alliance in the development of this product would also synchronize the development of the product with manufacturer’s capabilities.

What we believe is fundamentally unique about our technology and approach, in the fuel cell world:

• Privately funded through the sale of stock and founders savings.

• Started from the manufacturing point of view.
• We identified and designed the fuel cell around; what was acceptable to the consumer, they could afford, and could become a lucrative business within several years.

The following table is a comparison summary of how the micro-fuel cell® could perform when it is packaged to run cellular phones.

MSI/ERD 01/01/99