The accompanying table (next page) shows a great many publicly traded fuel companies that either compete directly with Neah Power or operate in different areas of fuel cell technology. Over the years, many companies have fallen by the wayside, unable to make the economics of producing fuel cells sufficiently compelling to establish long term foundations. The underlying appeal of fuel cells, that emissions are non-toxic to the environment, continues to drive companies like Neah Power to find either more economically friendly or logistically appealing products that can overcome the basic inertia of the marketplace. To date, Neah Power has been very limited in revenue generation. This condition appears to be on the verge of changing. Our income model accounts for the establishment of a number of contractual or grant arrangements that should soon produce revenues. We are also taking the leap that these relationships will lead to even higher revenues 12 months down the road. In parallel, we are assuming that the technological advantages that Neah Power has developed will be of considerable appeal to many companies. The logical consequence would, of course, be an expanding foundation of customer royaltybased revenues. The risk is that unforeseen technical complications arise as current customers stresstest the technology in all its practical applications. From a valuation standpoint, valuation ratios among the peer companies are wide and varied. In addition to the IP valuation cited earlier in this report, revenue as a multiple of projected revenues for such an early stage company is often used as a tool. In the case of Neah Power, we believe that the company is on the verge of generating significant revenues over the next 18 months. One of the more profound observations one can make from this list is the persistently high valuations of some of these companies (Ballard, Fuel Cell, Plug Power) despite the fact that each has run up substantial cumulative losses and despite each being in business for over 20 years. By contrast, Neah Power is on the verge of meaningful commercialization after only 14 years of product research and development. It is perhaps why this nearly widespread lack of success with the major fuel cell companies has produced a very deep sense of cynicism with respect to this sector. For this reason, should the company deliver on two or more of the projects on which it is currently involved, this cynicism could suddenly transition to a great deal of investor recognition and enthusiasm.
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