Proton First Day Dealings

Proton Power Systems PLC
31 October 2006


        Proton Power Systems plc announces first day of dealings on AIM


Proton Power Systems plc ('PPS' or the 'Group'), a leading commercial 
electric hybrid fuel cells company, today announces the admission of its 
ordinary shares to trading on AIM under the ticker symbol 'PPS' ('Admission').

Key Placing Highlights

   • Raised £4.67m in a placing ('Placing') conducted by Bell Lawrie, a
     division of Brewin Dolphin Securities Limited ('Bell Lawrie')

   • Placing 5,842,295 new ordinary shares of at 80p per share

   • Expected market capitalisation on admission of £25.06m

   • Proceeds to be used for, primarily, to invest in internal
     infrastructure and manufacturing automation and working capital 
     requirements


Felix Heidelberg, PPS' Chief Executive Officer, said, 'We have a cost 
effective modular solution ready to go into volume manufacture with applications 
where back to base refuelling occurs.

'The requirement to improve air quality and the increasing worldwide acceptance 
of the need to defend against climate change in an economic way are major 
drivers for our customers.

'PPS is well placed to contribute to these goals and we see AIM as an ideal
market in which to allow investors to also play their part.'


Product

Proton Motor has developed and produced a standard fuel cell module, fuelled by
hydrogen integrated with an energy storage system to create a hybrid electric
fuel cell system capable of providing power during peak demand situations. The
market focus is on industrial applications where 'back-to-base' refuelling
occurs, on site, at the end of each shift or work period.

The Group has identified opportunities to replace lead-acid batteries with their
PEM fuel cell systems and has identified niche markets in the materials handling
and mass-transportation sectors where hybrid electric fuel cell systems offer
considerable advantages over conventional engine technology and fuel cell only
drive systems. The Group has identified two initial market segments in which the
Directors believe the advantages of hybrid electric fuel cell systems will lead
to economic benefits for the end user - forklift trucks and buses. In most
cases, vehicles operate within a defined radius or return to central points of
operation.

The many advantages over current commercial alternatives include lower fuel
consumption, longer periods between refueling, shorter refueling, consistent
levels of power delivery and zero harmful emissions.

Proton Motor's technology development has been undertaken with the key
objectives of multiple applications and volume production.

Finally a confidential supply arrangement with a major, global manufacturer of
material handling trucks is currently under negotiation at board level.


Markets

Proton Motor has identified two initial market segments in which the Directors
believe the advantages of hybrid electric fuel cell systems will lead to
economic benefits for the end user - forklift trucks and buses.


Forklift trucks

In 2003, batteries for use in battery powered forklift trucks generated more
than US$1.5 billion in worldwide sales. In 2004, the global market for sales of
material handling vehicles was in excess of approximately 700,000 units and it
is anticipated that battery powered forklifts' share of the material handling
market will steadily increase. The Directors believe that fuel cell conversion
could be applicable to approximately 20 per cent. of this market. The Directors
believe that this battery powered segment offers an immediately addressable
market for hybrid electric fuel cell systems.


Buses

Global bus production has reached approximately 240,000 units per annum. The
Directors believe that one of the first markets where a hybrid electric fuel
cell system could achieve significant penetration is the local bus sector -
those buses operating in built up areas and moving relatively short distances
from base. The Directors have estimated that approximately 25 per cent. of this
market could be addressed by a fuel cell solution with an average cost per
application of approximately €25,000 and a total market value of approximately
€1.5 billion per annum.


Prospects

Proton's principal objective, upon completion of Admission, is to establish a
volume manufacturing facility based upon solid sales orders. This should enable 
the Group to achieve an economically viable unit cost for its hybrid fuel cell 
systems. The funds available from the Placing should also enable the Group to 
continue to develop both new and existing relationships, and enhance its ability 
to take advantage of new opportunities as they arise. Initially, the Group will 
invest in increased operational and sales infrastructure appropriate to its 
ongoing growth. The Directors believe that the advanced stage of 
commercialisation of the Group's technology, coupled with the Group's existing 
partnerships, should allow the business to firmly establish itself as a leading, 
global, fuel cell system provider.


For further Information contact:

Ken Cronin                    Gavin Anderson & Company             0207 554 1400
Marie Cairney

David Cunningham              Bell Lawrie                          0141 314 8105

Felix Heidelberg              Proton Power Systems        [phone]


This announcement does not constitute an offer or invitation to acquire or
dispose of any securities of the Company.

Bell Lawrie is acting exclusively for Proton in connection with Placing and
Admission and no one else and will not be responsible to anyone other than
Proton for providing the protections afforded to clients of Bell Lawrie or for
providing advice in relation to matters referred to in this announcement.







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