Proton Mtr Pwr Regulatory News (PPS)

Proton Power Systems plc

("Proton Power" or the "Company")

Extension and partial conversion of convertible loan

Additional listing

Director shareholdings

Extension of convertible loan agreement

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 had previously been increased in November 2009, January 2010 and April 2010. 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 of 1p ("Ordinary Share"), are unchanged and as announced on 29 April 2009.

The Convertible Loan facility is now up to approximately €6.48 million of which €5.68 million have been drawn down and which would be convertible, assuming that the facility is fully drawn down and excluding the 25,000,000 Ordinary Shares referred to below, into 275,000,000 new 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 extension of the Convertible Loan from Roundstone Properties 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.

Additional listing

Proton Power also announces that Roundstone Properties has decided to convert £500,000 of the Convertible Loan into 25,000,000 new Ordinary Shares.

Application has been made for the 25,000,000 new Ordinary Shares to be admitted to AIM and it is expected that admission will be effective on 19 October 2010 ("Admission").

Following Admission of the 25,000,000 new Ordinary Shares and the transactions referred to below, Roundstone Properties will own 141,831,769 Ordinary Shares representing approximately 77.93 per cent. of the Company's issued share capital.

Total Voting Rights

Following Admission of the 25,000,000 new Ordinary Shares, the total number of issued Ordinary Shares in the Company will be 181,990,863 Ordinary Shares. The Company does not hold any Ordinary Shares in treasury. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Financial Service Authority's Disclosure and Transparency Rules.

Director shareholdings

Roundstone Properties has today agreed, subject to Admission, to transfer a further 700,000 Ordinary Shares to directors of the Company as follows:

Roundstone Properties has also agreed, subject to Admission, to sell 450,000 Ordinary Shares at 2p per share to a former director of the Company.

The above transfers are in addition to the transfer of 1,300,000 Ordinary Shares from Roundstone Properties to directors and other parties announced on 29 July 2009 which as a result of Admission will have completed.

As a result of these transactions and following Admission of the 25,000,000 Ordinary Shares referred to above, Roundstone Properties will hold 141,831,769 Ordinary Shares representing 77.93 per cent. of the Company's share capital following Admission and as enlarged by the issue of the new 25,000,000 Ordinary Shares.

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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.

www.protonpowersystems.com