“Since our preliminary results were announced on 6 September, we have made further progress on our stated strategy for the Group. Levels of expenditure and cash burn have been lower than anticipated in our internal forecasts and significant progress has been made on fuel processor technology to extract hydrogen from propane and butane (LPG). Good progress has also been made on similar technology with diesel and JP8. A number of laboratory fuel processor prototype designs are currently being evaluated and the launch of this product range is anticipated to be achieved at the end of 2006.

The Company continues to work closely with Speedy Hire PLC (LSE: SDY), Europe’s largest tool hire company. Together we have designed a cordless tool battery charger to meet Speedy Hire’s stringent health and safety requirements. The two companies are also co-operating to develop a range of fuel cell products particularly in relation to portable accommodation.

The Company has signed a Memorandum of Understanding (MoU) with a strategic partner to develop a quiet diesel fuel cell generator for yachts. The product is expected to begin sea trials in mid 2007.

At the recent Defence Systems & Equipment International (DSEi) show in London, Voller Energy announced the VE900M military portable fuel cell. This system is being designed to comply with the anticipated charging requirement for the second stage of the Future Infantry Soldier Technology programme (FIST 2) administered by Thales on behalf of the UK Ministry of Defence. There have been expressions of interest from suppliers to the US military in the JP8 fuel processor technology.

We are pleased to report that Voller Energy was the winner of the Power category of The Institute of Electrical Engineering (IEE) Innovation in Engineering Awards, for its revolutionary VE100 portable fuel cell system, again emphasising the lead the Company has in portable fuel cell development.

We also announce that Dr Mark Turpin, Chief Technical Officer, has given the Board notice of his resignation from the Board of the Company for personal reasons and this has been accepted. Therefore, the resolution to re-elect Dr Turpin at the AGM will not be proposed. Mark joined the technical team of Voller Energy in February 2005 and had an important input into the development of the Company. Although sad that Mark is leaving, we are very pleased at the progress being made at our German and UK R&D facilities and look forward to announcing further innovations in due course.

The Company is well placed to achieve its financial targets and believes it is on course to be one of the first fuel cell companies in the world to reach profitability.”