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[PoemStone]

StockGoodiesPlaysOfTheWeek. NPWZ. Momentum Alert:
http://investorshub.advfn.com/boards/board.aspx?board_id=18582


The Goodies Team have out done themselves with this one. We have been working real hard to research what we believe to be a nice growth story.


This company has recently announced not only breaking developments that further place the company in the top tier of its sector, we have seen a very nice surge for NPWZ in the way of investor volume as they have just announced another patent issued from the U. S. Patent and Trademark Office. The patent, titled "Liquid-liquid fuel cell systems having flow-through anodes and flow-by cathodes" (USPTO #7,968,248), further solidifies Neah's presence and leadership in alternative energy.

Neah Power Systems,NPWZ Inc., Nevada, operating through its wholly-owned subsidiary, Neah Power Systems, Inc., is a micro fuel cell development stage company using a patented, porous silicon-based design to provide long-lasting, efficient, and safe power solutions for portable electronic devices, including notebook PCs and other power-hungry computer, entertainment, and communications products. The Company's power solutions for these devices, such as notebook personal computers (PCs), military radios, and other power-hungry computer, entertainment and communications products, use its silicon-based design with higher power densities to enable lighter-weight, smaller form-factors and potentially lower costs. The Company also focuses on designing and distributing the fuel cartridge that its fuel cells require for refueling.

In May 2011, we announced that we had signed a non-binding memorandum of understanding to acquire privately held
Exigent Security Products which markets and develops advanced radiation sensors for use by medical,
homeland security, defense and other industries. We believe that this business combination, if successfully
consummated, will enable us to combine offerings of fuel cell and radiation detector products in order to provide
power for remote and continuous sensor applications. We currently have an unsecured note receivable from Exigent
Security Products, Inc. in the amount of $35,000 and bearing interest at 10% per annum, compounded monthly, and
with all principal and interest due June 2012. No additional agreements have been entered into since
the memorandum of understanding


LETTER TO SHAREHOLDERS

AUGUST 25, 2011

I am pleased to write this letter to provide an update on Neah Power and share with you the many positive developments that have unfolded in 2011. We believe that many of these developments can serve as the foundation for the Company's continued momentum into the Second Half of 2011 and we are proud of the these achievements.

Our objective for the Second Half of 2011 is to continue the effort toward licensing of our patented, silicon-based PowerChip MCMTM technology through the establishment of customer engagements. During the course of the year, we are seeing the benefits of previous execution around completing high volume capable prototype systems, customer engagements for products, as well as licensing revenue streams. We continue be excited about our opportunity to merge with Exigent Security Products, the radiation sensor company. Some other very eventful items that happened of 2011, that we believe will continue to evolve to the Company's benefit are

1. A team from Neah, including myself, visited India in May to further develop and grow potential business opportunities. Over the course of the summer we continued to nurture and develop those relationships with a follow-uo visit to India in August where we demonstrated the applications of our technology.
2. As a recognized expert in fuel cell technology, I was invited to Japan for the Renewable Energy Expo 2011 to present Neah's disruptive and patented technology to leading adopters of fuel cell technologies.
3. In August, we again visited Japan where we demonstrated our technology to parties interested in the technology.
4. We continue to have interest from previously announced customers, and we are in the process of renewing our various letters of intent.
5. We continue to engender interest and early engagement from the leading edge fuel cell adopters in the defense, consumer, and transportation markets.
6. The leading US defense supplier has renewed their letter of interest, and we are progressing well in our discussions about the specific product applications.
7. The most recent award, the 2010 Best of What's NewTM Popular Science, which is one of its most prestigious awards in technology, continues to generate interest among various potential customers.



The management has been continuously committed to working through the difficult economic times that we are experiencing as a nation, as well as a Company. To better align the management interest with that of the shareholder, a director involved with sales efforts for the Company is foregoing any cash compensation, and the officers of the Company are taking a 33% reduction in salary. In return, officers and one director and will be compensated in cash and equity on completion of bookings, and cash receipts, by the Company over the course of the next three years.

We are working diligently to ensure that calendar 2011 will be a year that marks the sustained launch of the Company in the market and will serve as the foundation of our future growth. The Company has over $38M invested from shareholders and previous investors like Intel Capital, Novellus Systems and other top tier venture capitalists. We believe we are now seeing the fruit of that effort, as evidenced by the various patents issued to the Company, awards and other recognition and customer interest for our products.

We have an exceptional team of people committed to bringing the PowerChip MCMTM product to market. As the CEO, I have experience launching successful products for a number of Fortune 500 Companies, and took a leadership role at Neah to complete the development of the technology, develop the manufacturing strategy, and deploy the product with innovators and market leaders. We have a committed team and a Board of Directors that diligently oversees the operations and execution of the Company, while also actively contributing to develop sales channels for Neah.

Neah's superior performance with our PowerChip MCMTM technology, as compared to the incumbent PEM (Proton Exchange Membrane) technology includes longer lifetime, approximately 2\275 times the power density (power per unit area), capital efficient manufacturing using existing computer chip manufacturing capacity, and a unique anaerobic (non-air) functionality. This unique anaerobic capability makes us an attractive solution for automobiles, trucks, two wheelers, forklifts, electric scooters, and defense applications.

As we move beyond the first half of our fiscal year 2011, we are actively packaging our technology and building a series of commercialized offerings in:

\267 Licensing

\267 Product Development

\267 Prototype Development

\267 Engineering Support

We continue to focus our effort on growing the Company, deploying the PowerChip MCMTMtechnology through licensing and product sales, and maintaining our lean operation mode while we continue to advance Neah Power Systems.

Thank you for your continued support of Neah Power and the Company's management team.

Chris D'Couto PhD, MBA
President and CEO
Company Contact:
Stephen Wilson
Neah Power Systems
[e-mail]
425-424-3324