FuelCellsWorks

The Company reports that the core design of the natural gas fuel cell system to be delivered
under the Supply Agreement, which incorporates IdaTech’s proprietary fuel reforming
technology, has been completed. Additionally, IdaTech has achieved a significant cost
reduction in this design through numerous technical achievements and by establishing a
highly competitive supply chain. However, the development timeline has taken longer than
originally planned, as it has taken longer for certain component development and to build
the supply chain which is more geographically spread than originally envisaged and now
spans India, China, North America and Europe. Accordingly the fuel cell system will not be
available for delivery to ACME in accordance with the time line specified in the Supply
Agreement. This delay means that a milestone in the product acceptance process is likely to
be missed in October of this year. The Supply Agreement provides for an extension of the
product acceptance process of up to 6 months if an acceptable remediation plan is submitted
by 16 November 2009. Furthermore, to date IdaTech has not been able to achieve the
challenging cost targets to a level that would be profitable at the price level specified in the
Supply Agreement.

Under the terms of the Supply Agreement, missing this particular milestone in the product
acceptance testing process may result in the termination of the Supply Agreement without
penalties to any party. If the Supply Agreement is terminated, this would mean significantly
lower sales for 2010, but the Directors believe it will have no material impact on the timing of
cash breakeven for the Company. A further update and the results for the six months ended
30 June 2009 will be published on 30 September 2009.

The development work on both the natural gas and direct hydrogen fuelled systems over the
past 11 months has brought major benefits to IdaTech with regard to the development of a
global supply chain, significant cost reduction initiatives, technological innovation and system
performance improvements. Many of these benefits will be applicable in the next generation
of methanol – water fuelled systems currently under development and due for launch in 2010.
In the event that the Supply Agreement is replaced by a more flexible agreement it will allow
the Company greater freedom in shifting resources to other programs such as the next
generation methanol systems, as well as modifying the product requirements to meet a
broader range of applications.

The Company believes that its work carried out to date has validated that there is a value
proposition for fuel cell systems in the fast growing Indian telecommunications backup
market, with higher efficiency and lower maintenance costs than the incumbent diesel
generators and battery banks. In addition, IdaTech launched the ElectraGenTM H2 in July;
these 300 systems are currently being built in IdaTech’s Mexican manufacturing facility and
are being shipped to ACME over the remainder of the year. Field trial data indicate these
systems are performing very well in difficult environments and hitting their performance
targets.

Commenting on the update, Hal Koyama, CEO said:
“IdaTech has made tremendous technical progress over the last year, driven by the focus of
the ACME Supply Agreement. Working with our partner Ballard, we have broken through a
significant number of the cost barriers once thought unachievable with current technology
and added core pieces of new technology to our portfolio, simultaneously moving the bar on
PEM fuel cell cost and performance in a very significant way. We can now see that the
Indian market is a key area for the initial mass application of fuel cell products and we have
one of the best partners in that market. This program has also added the natural gas
product to our portfolio, with market applications that go beyond telecommunications backup
power. We look forward to continue working with ACME to develop the Indian market for the
range of IdaTech products.”

Atul Sabharwal, Chief Operating Officer of ACME commented:
“ACME is also disappointed with this delay, but feels as strongly as ever that a substantial
market opportunity exists for fuel cells in wireless telecom backup and other applications in
India, where a reliable, cost-effective and environmentally friendly solution is greatly needed”

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