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SANTA ANA, CA, U.S.A. – November 14, 2005 – QuantumSphere, Inc., the leading manufacturer of metallic nanopowders for applications in aerospace, defense, energy, electronics and other markets demanding advanced material applications, announced it received Frost & Sullivan’s 2005 Technology Innovation of the Year Award in the area of Metallic Nanopowder Technologies. QuantumSphere is the only supplier of the world’s highest quality magnetic, conductive and catalytic metallic nanopowders, including QSI-nano™ nickel, silver, copper, cobalt and other proprietary nanoscale alloys. QSI-nano™ alloys will ultimately replace platinum as the main catalyst in a variety of fuel cells and will also be used in high performance batteries. Each year, Frost & Sullivan presents this Award to a company that has exhibited technological superiority within its industry. The Award recognizes the ability of the company to successfully develop and introduce new technology, formulate a well-designed product family, and make significant product performance contributions to the industry.

Research Methodology and Selection Process Criteria

To choose the Award recipient, Frost & Sullivan’s analyst team conducted a selection process that included primary interviews and extensive primary and secondary research via a bottom-up approach. The analysts team shortlists candidates on the basis of a set of qualitative and quantitative measurements. The analyst also considers the pace of research and technology innovation and the significance or potential relevance of the innovation to the overall industry. The ultimate Award recipient is chosen after a thorough evaluation of this research. Additionally, there are specific criteria used to determine the final rankings. The recipient of this Award has excelled based on the following criteria:

Significance of the innovation(s) in the industry, and across industries

Potential of the products of innovation(s) to become industry standard(s)

Competitive advantage of innovation vis-a-vis other related ones

Impact (or potential impact) of innovation(s) on company or industry mindshare and/or company bottom line

Breadth of intellectual property related to the innovations (i.e. patents, scientific publications, papers in peer-reviewed journals).

“Frost & Sullivan’s Technology Innovation of the Year Award in the field of metallic nanopowder technologies went to QuantumSphere, Inc. in recognition of the company’s development of a novel automated vapor-deposition based process technology for the production of high-quality metallic nanopowders and alloys,” said Anil Naidu, Research Analyst. “These materials could ultimately replace platinum as the main catalyst in a variety of fuel cells and battery electrodes, in addition to being used in ‘traditional’ areas such as coatings, conductive inks, filtration membranes as well as for structural applications,” added Naidu.

“This Award further validates the viability of our go-to-market strategy, products, dominant intellectual property portfolio and the outstanding quality of our seasoned scientific team,” said Kevin Maloney, CEO, QuantumSphere, Inc. “We appreciate that a leading growth consulting firm has formally recognized the fundamental breakthrough quality of QuantumSphere’s technology,” Maloney added. QuantumSphere’s bottom-up process combines conventional gas-phase condensation methods with the firm’s own intellectual property, to develop nanopowder particles with a highly controlled particle size, uniform distribution and custom tailored oxide shell thickness. Resistance heating is used to first liquefy and then vaporize the metal precursor, which is then exposed to the laminar flow of inert gasses to condense the metal into spherical nanoparticles meeting specification requirements. The use of resistance heating and vapor condensation helps produce higher purity nanopowders with reduced degrees of agglomeration.

QuantumSphere’s process is fully automated and highly scalable, governed by a proprietary software system monitoring and controlling up to 23 different metrics on the production process. This confers key advantages to QuantumSphere’s production process: the high degree of control over a wide range of parameters provides repeatability, allowing the particle size distribution, oxide shell thickness, and particle characteristics to be maintained across small batches and large continuous production runs. It also makes QuantumSphere’s process more flexible, allowing production to be adapted and modified to meet specialized, application-specific needs generated by different clients or partners. Also each process can be easily optimized to meet defined requirements for oxide shell thickness, consistent particle size and uniform distribution. This capability is significant given the largely customized, case-by-case, application-centric nature of metallic nanopowders. This process is environmentally friendly and generates metallic nanopowders that are safer to handle and more easily dispersed in a variety of solutions and polymers.

QuantumSphere has established intellectual property in key processes related to the production, collection, and dispersion of nanopowders, for instance, in terms of the control of the laminar gas flow around the particles to produce nanopowders of particular size, purity and oxide shell thickness. QuantumSphere also has intellectual property filed on nano-enabled catalyst devices for applications in the battery and fuel cell markets. QuantumSphere’s efforts have also focused on increasing strength to weight ratios for composites, and on increasing the toughness of these nanomaterials. The firm’s research and development team has focused on micro fuel cell devices for energy storage, batteries and in the area of, hydrogen generation and storage for renewable energy. A proprietary nickel/cobalt alloy was developed earlier in 2005 and recently validated as an excellent catalyst material for Zinc/air batteries. These nano alloys will replace expensive platinum as a catalyst in a variety of fuel cell devices and potentially help spur the growth of this market.

About QuantumSphere, Inc

QuantumSphere is a manufacturer of nanoscale metals and alloys for applications in portable power, renewable energy, electronics, aerospace, defense and other markets demanding advanced materials. QuantumSphere’s proprietary technology enables the production of ultra-pure, highly uniform nanometals and alloys under 50 nanometers in high volume at commercial prices with the potential to be utilized in a large number of new applications. QuantumSphere has also created an extensive intellectual property portfolio around its process capabilities and end-use commercial applications. QuantumSphere seeks to leverage its market position to manufacture and ship high-performance catalyst materials and electrode devices for clean-energy applications such as batteries and micro fuel cells for portable power and hydrogen generation through electrolysis, among others.

QuantumSphere also works closely with leading universities by funding research to validate QuantumSphere-Nano materials and generate licensing rights to intellectual property for disruptive high-value commercial applications. For more information, please visit www.qsinano.com.