Proton Energy Systems, Inc.
, a leader in practical applications of Proton Exchange
Membrane, or PEM, technology and products, announced today that it
successfully completed a contract with NASA for an advanced solid-state 1 kW
capable UNIGEN® Unitized Regenerative Fuel Cell, or URFC, system.

NASA selected Proton to demonstrate UNIGEN URFC systems as energy storage
technology for zero-gravity and micro-gravity environments.
applications of interest to NASA include satellite propulsion, solar powered
aircraft, space stations, and planetary bases.
This contract success is the
culmination of the second stage of a two-part NASA contract.

This advanced fuel cell system, incorporating features that eliminate
rotating equipment such as fans, compressors and pumps, was developed under a
$600,000 contract to NASA as part of its Small Business Innovation Research,
or SBIR, program.
Achievements under this SBIR support Proton’s recently
announced contract worth up to $6.2 million with the Defense Advanced Research
Projects Agency, or DARPA, and the Naval Research Laboratory.
It also
includes partners General Dynamics and ATK Thiokol.

“We are pleased with the successful integration and demonstration of our 1
kW UNIGEN URFC system under the NASA Phase II SBIR program.
development of Proton’s novel URFC architecture will continue through its
recent contract award from the Naval Research Laboratory,” stated Jason
Shiepe, Proton’s program engineering manager for this project.

Trent Molter, senior vice-president, technology and new business,
observed, “The URFC architecture that Proton developed and demonstrated under
this contract is revolutionary in that all moving parts were eliminated.
Proton’s partners, ATK Thiokol and General Dynamics, are interested in rapidly
integrating the newly developed technology into DARPA’s water rocket satellite
propulsion application.
Further, the commercial implications of this
technology development allow for greatly simplified, low cost automotive
fueling and energy storage products.
This is an excellent example of how the
private sector and the U. S. government can cooperate to achieve critical
technology breakthroughs that benefit commercial, military, and aerospace

Proton’s proprietary UNIGEN URFC energy storage system uses a unique PEM
cell that can operate as both a fuel cell and an electrolysis cell.
This cell
can make hydrogen at pressure by electrolysis of water and then can reverse
and make power when needed from the stored hydrogen. This critical technology
is currently under commercial development by Proton for telecommunications,
renewable energy and other energy storage applications.

Proton Energy Systems, Inc. ( ) designs,
develops and manufactures proton exchange membrane, or PEM, electrochemical
products that it employs in hydrogen generating devices and in regenerative
fuel cell systems that function as power generating and energy storage
Proton’s HOGEN® hydrogen generators produce hydrogen from
electricity and water in a clean and efficient process using its proprietary
PEM technology.
Proton’s UNIGEN® regenerative fuel cell systems, which it
is currently developing, will combine Proton’s hydrogen generation technology
with a fuel cell power generator to create an energy device that is able to
produce and store the hydrogen fuel it can later use to generate electricity.

This press release contains forward-looking statements for purposes of the
safe harbor provisions under The Private Securities Litigation Reform Act of
1995. Statements contained herein that are not statements of historical fact
may be deemed to be forward-looking information. Without limiting the
foregoing, words such as “anticipates,” “believes,” “could,” “estimate,”
“expect,” “intend,” “may,” “might,” “should,” “will,” and “would” and other
forms of these words or similar words are intended to identify forward-looking
information. Proton’s actual results may differ materially from those
indicated by these forward-looking statements as a result of various important
factors. Proton disclaims any obligation to update these forward-looking
statements. Factors that could cause results to differ materially from those
contained in Proton’s forward-looking statements include, but are not limited
to, our failure to complete development of our products, failure of our
products to achieve commercial acceptance, our inability to expand our
production facilities, manufacture our products at commercially acceptable
costs or establish distribution relationships, the impact of competitive
products and other factors detailed in our Form 10-K for the year ended
December 31, 2000 and other filings made from time to time with the SEC.

HOGEN® and UNIGEN® are Registered Trademarks of Proton Energy Systems,