1. Conduit Ventures: Observations on Investing in Fuel Cells Daniel Carter 26 th February 2004 Financing the Hydrogen Revolution, London

2. 2 ► Conduit Ventures: Overview ► Our Portfolio Companies, and Why We Invested in Them ► Observations on Valuation and Fuel Cell Commercialisation ► Conclusions Overview

3. 3 ► Europe’s first specialist venture fund focused on fuel cell and related hydrogen technologies ► Only focussed fund w/investment in North America AND Europe ► Initial cornerstone investors in the Partnership: ► Focused on achieving financial returns for the Partnership ► Broad deal flow stemming from network and market positioning. >125 opportunities identified: 3 investments so far Conduit Ventures A Unique Venture Fund

4. 4 Our Portfolio Companies and Why We Invested in Them Company and Location Value Proposition Investment Rationale VancouverCambridge Boston Micro fuel cell stack developer based on patent- pending “flow- through” technology Potential to shrink the size of portable fuel cells whilst making them more robust and reduce cost Small-scale fuel cell power systems developer based on patent-pending technology Low cost stack manu- facturing techniques adopted from high-tech filtration cassette production Industrial efficiency-driven applications: forklifts, airport tugs, etc. Strength of management, customer relationships, technology

5. 5 Market timing is critical Source: TD Securities, 2004 Valuation Environment Bubble Revaluation Low PointRecovery? Conduit Investments

6. 6 Valuation Environment DateCompanyAmountTransaction 14/11: Plug Power (PLUG) $59 million Follow-on 14/11: Medis $13 millionFollow-on 3/2: Hydrogenics (HYGS) $60 million Follow-on 3/2:CalPERS / CalSTRS $1.5 billion To invest in Clean Tech 10/2: Xantrex $53 millionFiles for IPO 12/2: Stuart Energy (HHO) $16 million Follow-on 17/2:FuelCell Energy (FCEL) $100 millionFiles shelf equity/debt 18/2: Millenium Cell (MCEL) $6 million Private placement Increased public market activity indicates momentum…

7. 7 Timing is critical Valuation Environment Residential CHP Valuation - Unit Sales Time Micro fuel cells Backup & Standby Remote Stationary Automotive 2000 20032006>2010 Conduit investment ► Valuation stabilising as realistic market introduction approaches ► Sea-change expected with product launch

8. 8 ► Supporting our portfolio companies for value creation and product introduction ► Taking advantage of market opportunity and seeking the right opportunities ► Working with the sector to promote awareness ► Catalysing investment by providing industry expertise to generalist investors, enabling investment in the right companies Summary: What is Conduit Doing?

9. 9 Thank you for your interest Daniel Carter Principal dc@conduit-ventures.com +44 (0)20 7242 9595