SOURCE: Power Air Corporation

November 12, 2007 08:30 ET

Power Air CEO Issues Corporate Update Detailing Refined Product Commercialization Strategy

Technology Development Efforts Have Yielded New, High Performance Zinc Air Fuel Cell Configuration for Powering Mobile and Portable Electronic Devices

LIVERMORE, CA--(Marketwire - November 12, 2007) - Power Air Corporation (OTCBB: PWAC), a Zinc power company, today issued the following corporate update detailing recent developments that are expected to positively impact and support the Company's refined product development strategy and time-to-market goals and objectives. In a formal statement, Remy Kozak, President and Chief Executive Officer, stated:

"Since our founding in 2005, Power Air has remained intent on emerging as the first commercially viable fuel cell company in the world, successfully bringing to market a portfolio of low cost, silent, zero emission products ideally suited for powering a wide range of industry applications. This mission remains unchanged. However, recent efforts to miniaturize our proprietary Zinc Air Fuel Cell (ZAFC) technology -- particularly over the past six months -- have met with much greater success than anticipated, necessitating reprioritization of our commercialization strategies.

"While many factors affect time to market, for fuel cells it is the combination of scaling (size), quality (lifetime) and cost that we believe to be the most critical to success. In our ongoing efforts to meet internal development milestones, we have pioneered a device-agnostic Zinc Air-based cell that we believe is capable of materially outperforming current back-up/emergency battery power solutions for electronic mobile and portable devices, including iPods, cell phones and laptops, among others. Moreover, due to the fact that Zinc is both more stable and significantly more plentiful than Lithium (the current preferred element for powering mobile devices), we are confident that our technology will also enjoy notable safety and cost advantages over competing products in the market place.

"According to Frost & Sullivan, the number of portable electronic devices sold in the US alone exceeded 250 million (over 1 billion worldwide) in 2006, and almost every category of devices is projecting significant growth. Feature enhancements to these devices, including higher speed communications, larger screens, QWERTY keyboards, GPS and even cameras and gaming, are driving the demand for longer lasting portable power sources. Given the performance advantages shown for ZAFC technology cells in recent lab tests, this emerging $6.5 billion application opportunity represents a serious, highly compelling reason for Power Air to focus immediate attention on accelerating development of our unique power solution.

"Senior management has therefore established a time-sensitive, milestone-driven plan of action that provides for Power Air to begin shipping a commercial Zinc Air power pack in less than 12 months. Named 'Project Zorro,' related product development milestones include:

--  producing and testing an initial prototype of the power pack for
    application for cell phones, smart phones and mobile music players by the
    end of December 2007;
--  completing design freeze, pre-production readiness review, pilot
    production plan and quality plan by March 2008;
--  conducting field trials; completing manufacturing/quality assurance
    readiness review; finalizing supply chain management plan; committing to
    product launch strategy; and commencing to build order backlog by June
    2008;
--  implementing pilot production and completing certification processes
    by September 2008; and
--  commencing commercial shipments of the mobile version of the power
    pack no later than November 1, 2008.
    

"We anticipate that commercialization of our laptop-enabled version of Project Zorro will trail this timeline by approximately six months.

"Due to the wide range of manufacturers in each class of mobile devices and the number of suppliers and OEMs to these manufacturers, Power Air has many options in partnering to reach both the consumer and professional markets. For the professional segments, we may elect to sell Project Zorro power packs direct through traditional retail channels. For the consumer market, however, it is likely that we will choose to partner with an existing OEM or distributor network to gain rapid awareness and acceptance from the largest portion of the mobile workforce.

"In parallel with Project Zorro, our scientists and engineers will also be progressing development of our core ZAFC technology to meet the stringent performance requirements of the Portable Emergency Generator markets. At present, we are very close to achieving key electrolyte performance benchmarks necessary to meet system weight and volume targets, and we have made meaningful headway in advancing on our 'lifetime' objectives. Frost & Sullivan recently estimated the market potential for our indoor capable ZAFC generator at over $1.5 billion in the US and over $2.6 billion worldwide.

"The most critical component for our ZAFC system, and the one that most directly affects lifetime, is the Air Cathode, which we currently source from third parties and modify to fit our needs. The Air Cathode affects the performance and cost of any Zinc Air system. While Power Air remains optimistic that it will achieve cost, performance and lifetime targets for ZAFC systems utilizing commercially available Air Cathodes, the longer term success of Portable Emergency and UPS/Telecoms back-up power solutions will likely require that we develop a new design optimized for our proprietary ZAFC environment.

"In this regard, Power Air has initiated discussions with at least one National Lab with extensive experience developing electrodes and membranes to collaborate with us on the development of an Air Cathode specifically optimized for our ZAFC environment. Development of a proprietary Air Cathode would represent patentable Intellectual Property for Power Air that we could subsequently leverage to generate additional revenues through licensing or product sales. We look forward to providing greater details regarding this possible collaboration in the near future.

"Power Air's mid- to long-term growth strategy and envisioned approach to developing ZAFC-based products for other industry applications will largely be driven by the success we achieve in our current technology development efforts and, of course, to evolving technological advancements, market conditions and industry demands over time. However, based on where we are today and remaining cognizant of scale, quality and cost considerations, we anticipate that Power Air will roll-out proprietary ZAFC industry solutions in the following order:

--  24-60 months
    --  Telecom, Utility, Cable TV and UPS Back-Up
    --  Small On and Off-Road Vehicles
    --  Zinc Recycling Systems (for completion of Power Air's supply
        chain)
--  60+ months:
    --  Building UPS Back-Up
    --  APUs for trucks, boats, RV's and military
    --  Light Mobility Fleet Electric Vehicles
    --  Automotive
    --  Large/Heavy Vehicles and Buses
    --  Stationary

"Over and above our product development strategy, we have also committed to accomplishing a series of important corporate objectives in the coming 12-24 months. These entail expanding our senior leadership and engineering teams, extending our intellectual property portfolio, elevating our Company's profile on Wall Street, attracting institutional and analyst sponsorship, and pursuing the listing of our common stock on a national exchange, among other important goals. I plan to provide formal operational updates on a routine basis from this point forward in hopes of creating greater visibility into Power Air's progress. It is clear that we have a great deal of hard work ahead of us; but trust that we remain firmly committed to maximizing our many growth opportunities and future success.

"In closing, and on behalf of everyone at Power Air, I'd like to thank our valued shareholders, business partners and friends for their continuing support. We pledge that we will remain diligent on building an enduring and prosperous company -- one that we will all be proud to be associated," concluded Kozak.

About Power Air Corporation

Headquartered in Livermore, California with offices and research facilities in Vancouver, Power Air is a forward-thinking clean energy company engaged in commercializing proprietary, high performance Zinc Air Fuel Cell (ZAFC)-based products for the mobile electronics, portable and stationary power generation, light mobility and transportation markets. Power Air holds the exclusive worldwide license for the development and commercialization of products utilizing ZAFC technology pioneered through an extensive joint collaboration effort with Lawrence Livermore National Laboratory and the United States Department of Energy. For more information, please visit www.poweraircorp.com.

This press release includes statements that may constitute "forward-looking" statements, usually containing the words "believe," "estimate," "project," "expect" or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, acceptance of the Company's current and future products and services in the marketplace, the ability of the Company to develop effective new products and receive regulatory approvals of such products, competitive factors, dependence upon third-party vendors, and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.

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