Extension of convertible loan

http://www.protonpowersystems.com/

Proton Power (AIM: PPS), the designer, developer and producer of fuel cells and fuel cell electric hybrid systems, announces that it has agreed with Roundstone Properties Ltd ("Roundstone Properties") to increase by a further €1.62 million the amount of the convertible loan facility announced on 29 April 2009 (the "Convertible Loan") which was increased in November 2009. All other terms of the Convertible Loan, including the exercise price of 2p (at the exchange rate of 1.08 € per GBP) per Proton Power ordinary share, are unchanged and as announced on 29 April 2009.

Conversion of this tranche of the Convertible Loan into 75,000,000 new proton Power Ordinary shares is subject to obtaining the requisite approvals to allot the new shares from shareholders at the Company's Annual General Meeting to be held in June 2010.

As a result of this increase and the conversions into ordinary shares announced on 23 July 2009 and 18 January 2010, the Convertible Loan facility is now up to €3.24 million of which €2.025 million have been drawn down and which would be convertible, assuming that the facility is fully drawn down, into 150,000,000 new Proton Power ordinary shares.

Related party Transaction
Roundstone Properties is a company connected to Dr. Faiz Nahab    , a non-executive director of the Company, and is also a substantial shareholder (as defined in the AIM Rules) of the Company. The increase of the Convertible Loan from Roundstone is therefore classified as a transaction with a related party for the purposes of the AIM Rules. In accordance, therefore, with the AIM Rules, the directors of the Company, with the exclusion of Dr. Faiz Nahab    , having consulted with the Company's nominated adviser, Arbuthnot Securities Limited, consider that the terms of the transaction are fair and reasonable insofar as the Company's shareholders are concerned.

For further information:
Proton Power Systems plc  
John Wall, Chairman Tel:  +44 (0) 78 0291 7615  +44 (0) 78 0291 7615
Ali Naini, Deputy Chairman Tel:  +44 (0) 20 7329 1750  +44 (0) 20 7329 1750
Thomas Melczer    , CEO Tel:  +49 (0) 89 127 626 555  +49 (0) 89 127 626 555
 www.protonpowersystems.com

Arbuthnot Securities Limited 
Tom Griffiths / Antonio Bossi Tel:  +44 (0) 20 7012 2000  +44 (0) 20 7012 2000
 www.arbuthnotsecurities.co.uk

Media enquiries:
Abchurch Communications Limited 
Heather Salmond / Justin Heath / Monique Tsang  Tel:  +44 (0) 20 7398 7700  +44 (0) 20 7398 7700
monique.tsang@abchurch-group.com
www.abchurch-group.com

About Proton Power

Proton Power is a developer and manufacturer of fuel cells and fuel cell hybrid systems for motive and stationary power supply. Its sales-driven strategy focuses on identifying applications with the greatest market needs and supplying large volumes of cost-competitive systems to fulfil those needs. Proton Power is gaining access to a broad range of markets through partnerships with leading OEMs such as Skoda Electric, in addition to contract manufacturers such as Deutsche Mechatronics.

Proton Power's motive applications include forklifts, city buses, municipal utility vehicles, commercial vehicles and ferries.  Stationary applications focus on the Uninterruptible Power Supply ("UPS") sector, where there is a large demand for mission-critical, grid-independent secure power supply in places such as telecommunications stations, data centres, hospitals, and power substations. 

Through its wholly owned subsidiary, Proton Motor Fuel Cell GmbH ("Proton Motor"), the group has developed and deployed fuel cell modules that can be integrated with energy storage media to create hybrid fuel cell systems. Proprietary, intelligent energy management software balances the power output across the system to maximise efficiency and improve power delivery. The system therefore boasts lower fuel consumption and more consistent levels of power delivery than conventional diesel/combustion engine or fuel cell-only systems, while producing zero harmful emissions.

Proton Power was admitted to trading on AIM on 31 October 2006 and is incorporated in the UK. Proton Motor has more than 15 years of experience in the fuel cell market and is located in Puchheim, near Munich, Germany.