This agreement will enable MTI Micro and the developer to collaborate in evaluating and adapting MTI Micro’s Mobion® technology for use in various precision imaging applications, including digital cameras. The work under this development agreement has commenced and MTI Micro expects to deliver prototypes later this month.

“MTI Micro’s effort with its second global OEM engagement strengthens the market for direct methanol fuel cell solutions to provide the additional power that new multi-functional consumer devices demand,” said Sara Bradford, Principal Consultant, Energy & Power Systems Group at Frost & Sullivan, an industry research firm. “This announcement solidifies that MTI Micro is gaining momentum in the commercialization of its Mobion® technology.”

According to Frost & Sullivan, digital cameras are the third largest consumer electronic segment after cellular telephones and laptop computers, with approximately 110 million new units expected to ship by 2009.

“MTI Micro has now signed agreements with two global OEMs that operate within two of the three largest consumer electronic segments – mobile phones and digital cameras. We are pleased that our Mobion® platform may potentially power devices in these two segments,” said Peng Lim, Chief Executive Officer of MTI. “Our goal is to make Mobion® a standard power source for powering all types of mobile products.”

Today’s announcement follows the recent final ruling issued by the U.S. Department of Transportation that will permit passengers and crew to carry methanol fuel cell cartridges and fuel cell systems designed for portable electronic devices on board airplanes in carry-on baggage.

About MTI MicroFuel Cells

MTI MicroFuel Cells Inc. (“MTI Micro”), a subsidiary of Mechanical Technology, Incorporated (NASDAQ: MKTY - News), is the developer of Mobion® offf-the-grid portable power solutions. MTI Micro has a team of entrepreneurial business executives, researchers and scientists; a proprietary direct methanol micro fuel cell power system and a number of system prototypes demonstrating size reductions and performance improvements; and related intellectual property. MTI Micro has received government funding and developed strategic partnerships to facilitate efforts to achieve commercialization. More information is available at www.mtimicrofuelcells.com.