MTI Micro Signs Development Agreement with Global Japanese Developer of Digital Cameras

ALBANY, N.Y.--(BUSINESS WIRE)--MTI MicroFuel Cells Inc. (“MTI Micro”), the developer of Mobion^® off-the-grid portable power solutions and a subsidiary of Mechanical Technology, Incorporated (“MTI”) (NASDAQ: MKTY), announced today that it entered into a development agreement with a global Japanese developer of products utilizing advanced optical and digital technologies, including digital cameras, to evaluate the feasibility, development and production of Mobion^® products.

“MTI Micro has now signed agreements with two global OEMs that operate within two of the three largest consumer electronic segments – mobile phones and digital cameras. We are pleased that our Mobion® platform may potentially power devices in these two segments”

This agreement will enable MTI Micro and the developer to collaborate in evaluating and adapting MTI Micro’s Mobion^® technology for use in various precision imaging applications, including digital cameras. The work under this development agreement has commenced and MTI Micro expects to deliver prototypes later this month.

“MTI Micro’s effort with its second global OEM engagement strengthens the market for direct methanol fuel cell solutions to provide the additional power that new multi-functional consumer devices demand,” said Sara Bradford, Principal Consultant, Energy & Power Systems Group at Frost & Sullivan, an industry research firm. “This announcement solidifies that MTI Micro is gaining momentum in the commercialization of its Mobion^® technology.”

According to Frost & Sullivan, digital cameras are the third largest consumer electronic segment after cellular telephones and laptop computers, with approximately 110 million new units expected to ship by 2009.

“MTI Micro has now signed agreements with two global OEMs that operate within two of the three largest consumer electronic segments – mobile phones and digital cameras. We are pleased that our Mobion^® platform may potentially power devices in these two segments,” said Peng Lim, Chief Executive Officer of MTI. “Our goal is to make Mobion^® a standard power source for powering all types of mobile products.”

Today’s announcement follows the recent final ruling issued by the U.S. Department of Transportation that will permit passengers and crew to carry methanol fuel cell cartridges and fuel cell systems designed for portable electronic devices on board airplanes in carry-on baggage.

About MTI MicroFuel Cells

MTI MicroFuel Cells Inc. (“MTI Micro”), a subsidiary of Mechanical Technology, Incorporated (NASDAQ: MKTY), is the developer of Mobion® off-the-grid portable power solutions. MTI Micro has a team of entrepreneurial business executives, researchers and scientists; a proprietary direct methanol micro fuel cell power system and a number of system prototypes demonstrating size reductions and performance improvements; and related intellectual property. MTI Micro has received government funding and developed strategic partnerships to facilitate efforts to achieve commercialization. More information is available at www.mtimicrofuelcells.com.

Statements in this press release which are not historical fact, including statements regarding management’s intentions, hopes, beliefs, expectations, representations, projections, plans or predictions of the future, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, among others, MTI Micro’s satisfactory completion of feasibility, development or production phases in its development agreement with a global developer of optical and digital technologies and the willingness of that developer to continue the relationship in the future; MTI Micro’s future business prospects, technology and performance; the market potential for and progress MTI Micro is making in developing its Mobion^® fuel cell systems for consumer applications; the ability of MTI Micro to develop key relationships with OEM decision makers, foster business development, or sell and support fuel cell systems to customers; and the future prospects, markets, product launch, market acceptance, and commercialization plans of MTI Micro products in the consumer markets. All forward-looking statements are made as of today, and MTI and MTI Micro disclaim any duty to update such statements. It is important to note that MTI Micro’s and MTI’s actual results could differ materially from those projected in forward-looking statements. Factors that could cause the anticipated results not to occur include, among others, risks related to financing; uncertainties in development, manufacturing and competition; and the risk factors listed from time to time in MTI’s SEC reports including but not limited to, its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.