Medis Technologies Ltd. (NASDAQ:MDTL)subsidiary, More Energy, Ltd has entered into a R&D agreement with Oy Hydrocell Ltd., a leading Finnish fuel cell developer.
Hydrocell possesses highly advanced technology and “know how” to manufacture and use gel electrolyte in fuel cell products and is developing fuel cells with 20 Watt capacity and greater. First, both companies will jointly seek to develop a new gel electrolyte material which may be used as the electrolyte in future Medis’ fuel cell products.
The electrolyte separates the anode and cathode electrodes and allows for hydroxide ion activity. Development of a successful gel electrolyte offers Medis the potential of reducing the size of its products while providing even greater energy density and improved efficiency.
Such a gel electrolyte would simplify the assembly process of Medis’ products and thereby lower the cost of future generation products.
Although Medis has separately been pursuing a gel electrolyte based design, including filing certain patents in this area, the combined capabilities of both companies is expected to accelerate the development.
Under the Agreement, Medis will have the exclusive right to use the gel in alkaline fuel cell products which provide under 30 watts of power or use borohydride as a fuel component. The Agreement calls for Medis to pay Hydrocell a total of $200,000 over two years for these rights. The agreement also provides that Medis will purchase the gel from Hydrocell or pay it prescribed royalty amounts if Medis decides to manufacture the gel itself or have it made by some other entity.
Medis and Hydrocell have also agreed to pursue joint development of a particular line of products which would seek to leverage the advantages of the parties’ respective technologies. These products would have a performance envelope between 20 Watts and 200 Watts and will be developed for applications in military programs, automotive uses, and stationary power systems. Each party will retain the right to continue autonomous product development activities based exclusively on its own technologies.
Finally, Medis was granted the exclusive distribution rights to the Hydrocell products for certain key military markets (including the USA and Israel) for an initial term of 3 years with a 3-year extension based on sales performance. This provision will allow Medis the opportunity to add to its own military product line a family of products developed by Hydrocell for certain higher power applications which will not compete with Medis’ existing product offerings.
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