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Having Demonstrated A Successful Prototype
In September 2007, Neah Power Systems Is In Position To Bring To Market
Their Fuel Cell Solution With Its Unique Silicon Infrastructure And Low Cost
Manufacturing That Will Revolutionize The Power Solutions Marketplace For
The Military, First Responders, And Consumers
Industrial Goods
Industrial Electrical Equipment
(NPWS-OTC: BB)
Neah Power Systems, Inc.
22118 20th Avenue SE, Suite 142
Bothell, WA 98021
Phone: 425-424-3324
Dr. Gerard C. D’Couto
President and CEO
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
Published March 21, 2008
BIO:
An industry veteran with a proven track record in technology development,
product marketing, sales, and new product introduction, he has previously
worked at Formfactor, Inc., Novellus Systems, Varian Associates and Intel
Corporation. Dr. D’Couto has 10+ years of senior management experience in
taking disruptive products successfully to market. In addition to
introducing various successful products, he also holds patents in some of
the core technologies.
He has a B.Tech. (Honors) in chemical engineering from the Coimbatore
Institute of Technology in India, Ph.D. in chemical engineering from
Clarkson University, N.Y., and an MBA from the Haas School of Business at
the University of California, Berkeley.
Company Profile:
Neah Power Systems, Inc. (NPWS) is developing long-lasting, efficient
and safe power solutions for portable electronic devices, including notebook
PCs, military radios, and other power-hungry computer, entertainment, and
communications products. Neah Power uses a patented, silicon-based design
for its micro fuel cells that enable industry leading power densities to
enable lighter-weight, smaller formfactor power solutions, air and non-air
operation, and a low cost architecture. This silicon-based architecture lets
Neah Power design a fuel cell that can be tailored to meet each customer’s
needs of power, size, and operating duration. This flexibility and Neah
Power’s ability to leverage the silicon industry’s manufacturing technology
set Neah Power apart.
The company’s working micro fuel cell prototype, which was demonstrated on
September 28, 2007, runs as a closed-loop system without requiring air as an
oxidant. As Neah Power pursues the broader military market for fuel cells,
it will leverage this characteristic unique to its porous silicon technology
to pursue these anaerobic applications, addressing a market whose needs are
currently not being met.
The military market for fuel cell is estimated to exceed $2.5B in 2012
according to the research report: “Micro Power Sources, Opportunities from
Fuel Cells and Batteries for Mobile Applications,” prepared by NanoMarkets,
and the overall market is estimated at > $8.0B in 2010, by the research firm
Frost and Sullivan. Neah Power is the only company that is using porous
silicon to pursue this market opportunity.
CEOCFO:
Dr. D’Couto, you are new as CEO at Neah Power; what attracted you to the
company?
Dr. D’Couto:
“My background is fifteen years
in the Silicon Valley working with high technology companies to bring
emerging technologies to the market. What was attractive about Neah Power
was the silicon based fuel cell technology that they were working on. Neah
Power’s technology is uniquely disruptive and could provide a fuel cell
solution that is applicable to consumer and commercial markets in a
scaleable fashion unlike any other competing technology that is out there.”
CEOCFO:
What is different about this technology?
Dr. D’Couto:
“What is very unique about Neah’s technology is we use silicon based
electrodes for the fuel cell, while most other fuel cell companies use a
proton exchange membrane (PEM). Silicon is the building block for all
computer chips and the outsourced manufacturing infrastructure is well
established, thus enabling low-cost, high-performance type capabilities. The
silicon electrodes themselves give us the industry’s leading power density.
We are typically two to three times higher than what other companies have
reported. We do this by creating a three-dimensional surface on the silicon
that gives higher surface area, and hence higher power density. The other
element of the silicon is that it enables us to run in a close loop system
where we carry the oxidant onboard, so that we can operate under water, in
thin air, in harsh environments, areas that other fuel cells have difficulty
operating in. We can also run in air like other fuel cells. The third key
benefit for the silicon based technology is the ability to have an
outsourced manufacturing model. We can use foundries to manufacture the
silicon electrodes and use electronics manufacturing systems companies to
assemble the fuel cell itself. Thus we have a very short time- and cost- to
market. In summary, these are the three key benefits, industries leading
power density, the ability to operate in a closed loop in an environment
that other fuel cells cannot easily operate in, and the third one is to take
advantage of the silicon infrastructure to have a completely outsourced
manufacturing model.”
CEOCFO:
Where are you in the development process?
Dr. D’Couto:
“It is an exciting time at the company. We demonstrated the prototype in
September 2007, so we have shown that the concept and feasibility works, we
can put the system together and it works. Today we are in the process of
identifying our first customer opportunities to take this product to market.
We are very excited at the opportunity to now build a product that can be
used by our end customers.”
CEOCFO:
Who is your target customer?
Dr. D’Couto:
“We have the ability to operate in what we are calling a closed loop system
so our initial go-to-market strategy is to identify customers in that area.
That would include underwater vehicles, aerial vehicles, sensors in harsh
environments, remote sensors where the cost of going out and changing the
power source are very high; these are our initial target markets. The more
mainstream applications are areas that we are pursuing as well.”
CEOCFO:
What is the financial picture like for Neah Power Systems today?
Dr. D’Couto: “We did a head count
reduction in the third week of January so that the company is operating
predominantly within the office of naval research (ONR) funded activity. Our
burn rate is a net of $100k per month after the ONR research grant. This
will significantly help the financial position of the company. We are
looking to get new investors into the company both from equity investment
and strategic partnerships. When I meet with businesses, scientific and
financial communities, and share the vision and opportunities associated
with Neah Power, we generate tremendous interest in the company. We are
interested in getting new investment into the company from entities who
share our excitement and optimism about the technology.”
CEOCFO:
Why is this the right time for this product?
Dr. D’Couto:
“The power requirements, whether it is consumer, military, or first
responder applications are not getting any less. There is a concept called
the power gap that has existed and has got a lot worse within the last ten
to fifteen years. The capability of computers and consumer electronics has
increased with higher speeds and more functionality. This has created a
richer experience for the user, but the power solutions have not kept up
with that. We have a solution that can enable 24/7 power, the concept being
that when the power runs out, you replace a cartridge, and can run 24/7. We
live in a very power hungry digital environment that requires continuous
power and our fuel cells are unique positioned to offer that power at the
industry’s leading power density. The military interestingly is on a
trajectory of even more aggressive power requirements with the electronics
being deployed on the battlefield is ever increasing. Today for a three-day
mission the soldier carries about thirty pounds worth of batteries, and the
ability to reduce that weight enables the military to carry more food ,
water, weapons, ammunition and other electronics. We believe that providing
a fuel cell solution would reduce that power requirement from twenty seven
pounds to eight or nine pounds with the same amount of power being supplied
to our men and women in uniform.”
CEOCFO:
Is cost a factor?
Dr. D’Couto:
“Cost is definitely a factor. We need to engineer that upfront. Our ability
to use silicon and an outsourced manufacturing model helps us get costs down
aggressively. This has enabled the computer industry to get costs down on an
ongoing basis, and we believe we can leverage that. We believe we would be
able to provide the most competitive power solution on the market that will
be competitive with the batteries on a per-watt basis.”
CEOCFO:
Why should potential investors be interested, and what might they miss when
they first look at the company?
Dr. D’Couto:
“Let’s start with what they might miss when they first look at the company.
Someone might miss the potential associated with Neah Power based on the
current stock price. I believe that as we do the right things for the
company and communicate more effectively our roadmap and key milestones, we
will generate more interest in the company. For a pre-revenue, public
company, you need to ask the following key questions – is the market
opportunity large; the answer is yes, the second question should be – does
the company have a disruptive, differentiated technology that is scaleable
from cost and manufacturability, clearly the answer is yes, the third
question is – has the company proven that their technology works, again the
answer is yes, the fourth question is – does the company have the right
management to make the product successful, again the answer is yes, and the
last question is – does the company have the right support on the Board of
Directors and Advisory board, again here the answer is yes. We have Joseph
Bronson, President and COO of Sanmina, Dr. Reza Abhari a renowned alternate
energy expert, Ret. Gen. Carol Mutter and Ret. Col. Jim Mutter from the US
Marine Corps, Buzz Aldrin, Ph.D. Astronaut and visionary, and Peter
Schwartz, CEO of the Global Business Network, on our advisory board. We have
key Novellus Systems people on our Technical Advisory Board, and a strong
BOD. We have had industry experts like Peter Schwartz and Rick Doherty
comment on the extraordinary potential of Neah Power solutions. As mentioned
earlier, we are also making a much more concerted effort to share our
technology, roadmap, vision, and key milestones with the business and
financial community, and meet and exceed those commitments. Given that, we
expect to generate a lot of interest in the company and create positive
momentum behind that. Those are the main reasons to look at Neah Power as a
company.”
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