Happy New Year!

Despite the current economy, 2009 is off to a good start for QuantumSphere. First, the QSI website (www.qsinano.com) has been recently updated to reflect more detailed content surrounding QSI’s advanced catalysts and process chemistries for use in multiple, high-value, clean-energy applications. On that note, we recently announced a breakthrough in a new process chemistry using organic solutes that can significantly lower the cost of energy intensive seawater desalination processes (this work was originally funded by a U.S. Navy grant). In addition, yesterday we were notified by the California Energy Commission (CEC) that QSI was selected for funding of our Algae to Bio Fuels grant proposal. Details on these items and other industry news can be found below.

As always, thank you for your continued support and feedback.

Kevin D. Maloney, CEO
QuantumSphere, Inc.