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What’s Powering Portable Energy $AONE $NPWZ $1211

|Includes: A123 Systems, Inc. (AONEQ)

Portable Energy has been a hot sector in recent times, A123 Systems and the Buffett funded BYD have led the way in market action, but a small company called Neah Power Systems looks set to join them.

BYD Company Limited (NYSE:BYD) is a Hong Kong-based joint stock company. The Company, along with its subsidiaries, is engaged in the research, development, manufacture and sale of rechargeable batteries, automobiles and related products, handset components, liquid crystal display (LCD) and other electronic products. It operates in four segments: the battery and other products segment comprises the manufacture and sale of rechargeable batteries for mobile phones, emergency lights and other battery related products; the mobile handset components segment comprises the manufacture and sale of LCD and other handset components; the automobiles and related products segment comprises the manufacture and sale of automobiles and auto-related moulds and components, and the others segment comprises, principally, non-manufacturing business of the Company and its subsidiaries.

A123 Systems, Inc. designs, develops, manufactures and sells advanced, rechargeable lithium-ion batteries and battery systems. The Company is engaged in design and development efforts with several passenger vehicle manufacturers and tier 1 suppliers, including General Motors Corporation and Think Global AS, relating to the design and development of batteries and battery systems for 11 passenger vehicle power train programs that can be applied to 19 vehicle models. On August 31, 2007, the Company acquired Enerland Co., Ltd., a battery company based in South Korea. On February 23, 2007, it acquired 2080418 Ontario Inc., doing business as Hymotion, which develops the Hymotion Battery Range Extender Module for converting HEVs to PHEVs.

Both have multibillion dollar market caps, and both project astronimical gowth rates. This brings us to one of our favorite companies Neah Power NPWZ .

While rechargable batteries are excitng, the holy grail of this industry is the fuel cell. Neah is the fuel cell company!

Danny Wilks, Research Scientist, Neah Power Systems, explained that Neah’s architecture allows the use of different catalyst surfaces. “All electrochemical cells have two fundamental parts: an anode and a cathode,” Wilks said. “These electrodes act in much the same way as terminals in a battery. The anode catalyzes a fuel source such as methanol to harvest electrons that are then ‘donated’ to the reaction. The electrons are then transferred to the cathode where an oxidant is catalyzed to accept the donated electrons. The flow of electrons in this reaction is how electricity is generated in an electrochemical cell. On the anode loop, methanol is one of the most energy dense fuels on the market today. Newer and greener methanol manufacturing methods are being developed that help to make methanol one of the more environmentally friendly fuels.”

Chris D’Couto, Neah CEO and President, pointed out, “The power needs of tomorrow call for adaptable and dynamic power solutions that can be tailored to customer needs. Neah continues to research the next generation of fuels and oxidants that will be used to place our patented porous silicon fuel cell technology for these growing markets.”

In October Neah completed the development of a silicon-based direct methanol fuel cell (DMFC) for the Office of Naval Research (ONR). Neah has provided ONR deliverables of a system that could serve as a building block for low power (1-200W) military, industrial, and consumer applications. The fuel cell operates using a liquid methanol fuel source and a liquid oxidant, which uniquely allows the fuel cell to operate in an environment with low quality or no air.

“The two awards from the ONR have helped Neah develop, scale-up and implement a manufacturing chain for this differentiated product, and has helped us transition from concept to product readiness. We are thankful to the ONR for its support to Neah Power Systems, enabling us to provide our solution to potential military, industrial and consumer markets,” said Dr. Chris D’Couto, President and CEO.

In November Neah announced that its methanol-powered fuel cell has been generating power for over 1000 hours continuously, further validating Neah’s porous silicon architecture as a viable platform to meet military and consumer power needs. “We are very satisfied thus far with the performance of our unique technology,” said Chris D’Couto, Neah President and CEO. “It continues to run and, at this point, even we don’t know its limits.” In October, Neah had previously announced that it had surpassed 500 hours of operation.

Neah Power Systems, Inc. is a publicly-held technology development company. Original venture investors include:

Frazier Technology Ventures (NYSE:FTV) is among the Frazier family of venture funds, which is the largest family of venture capital funds based in the Pacific Northwest with over $800 million under management. FTV was founded in late 2000 with an investment focus on seed and early stage technology investments in the Pacific Northwest. The FTV partners have a combined 70 years of operating experience with industry leaders such as Microsoft, Visio, AT&T, Real Networks and Immunex. Leveraging their operational, technical and domain skills, FTV’s mission is to partner with entrepreneurs to build innovative and sustainable businesses.

Alta Partners is a Bay Area venture capital firm with just under $1 billion under management. Alta invests in companies in the information technology and life sciences sector and provides financing, relationships and guidance to help build highly successful organizations. Alta Partners was founded in 1996 as a successor to Burr, Egan, Deleage & Co. (BEDCO), which invested more than $700 million in over 200 companies in the U.S. and overseas. Alta Partners builds on the BEDCO legacy combining capital and experience with exceptional entrepreneurial talent to achieve investing success.

Intel Capital, Intel’s strategic investment program, is one of the largest worldwide corporate venture programs investing in the technology segment. With an overall strategy to stimulate advances in computing and communications, the Intel Capital team seeks out and invests in promising companies worldwide working together to establish new and innovative technologies, develop industry standard solutions, drive Internet growth and advance the computing platform.

Castile Ventures is an early-stage venture capital firm providing financial backing and strategy guidance to help exceptional entrepreneurs build successful businesses founded on fundamental innovations in technology. Distinguished by the deep business and technology experience of its partners, Castile often leads or co-leads investment syndicated and plays an active role in guiding and advising its portfolio companies.

WestAm is the global investment management arm of WestLB AG, Germany’s fourth largest bank by assets. WestAM has investment management operations in the US, Europe, Japan and Australia. As of March 31, 2004, WestAM managed a total of $51 billion for more than 500 institutional clients around the world. The Private Equity Group of WestAM is based in Chicago with offices in New York and Los Angeles. The Group manages nearly $3 billion in institutional commitments to private equity through discretionally managed portfolios of venture and buyouts partnership, and direct investment in underlying portfolio companies.


Disclosure: Long NPWZ and 1211 (NYSE:HK) No AONE position