A joint agreement between manufacturers of portable fuel cell systems announced in the past week should herald significant advances in the technology.
Millennium Cell and The Dow Chemical Company have agreed to collaborate on the development and commercialisation of the systems for use in consumer electronics and military applications.
The energy systems will be based on Millennium Cell's patented Hydrogen on Demand technology in conjunction with proton exchange membrane fuel cells. The two companies will begin a three-year programme that should include the acquisition of developmental funding from both the military and a lead consumer electronics customer and the development, manufacture and delivery of a prototype for military and consumer applications.
Under the terms of the agreement between the two, Dow will receive a 3% equity of Millennium Cell. Upon achievement of each of the milestones, Dow will become entitled to certain additional equity grants from Millennium Cell and will have the right to purchase additional equity in Millennium Cell through cash investments up to a total of $5m.
As a condition of the agreement and in compliance with NASDAQ market rules, Millennium Cell will ask its shareholders to approve the potential issuance of over 19.9% of the company's currently outstanding shares to Dow at Millennium Cell's Annual Meeting on 21 April 2005.
