Proton Mtr Pwr Regulatory News (PPS)

Proton Power Systems plc

("Proton Power" or "the Company")

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"). 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 outstanding Convertible Loan facility is now up to approximately €9.18 million of which €7.56 million have been drawn down and which would be convertible into 425,000,000 new Ordinary Shares. If issued these 425,000,000 new Ordinary Shares would represent approximately 70 per cent. of the Company's enlarged share capital.

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.

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