Firefly Energy Tabbed for R&D Funding in U.S. Defense Bill

PEORIA, Ill.--Jan. 24, 2006--

U.S. Rep. Ray LaHood says $2.5 million portion of bill could speed development of advanced battery technology for military applications

The fiscal year 2006 defense bill recently signed by President Bush contains an appropriation of $2.5 million for Firefly Energy (www.fireflyenergy.com) to further develop 3D advanced battery technology for military applications.

The Peoria, IL-based company, which recently received a patent for its next generation graphite lead acid battery technology based on a material sciences innovation discovered by Caterpillar Inc., said in a briefing here that the measure was contained in a bill which will send more than $280 million in defense funding to Illinois this year.

The funds ultimately will enable Firefly Energy to develop prototypes of its 3D advance battery to power a variety of military equipment, giving U.S. troops the technological advantage they need to accomplish their missions while minimizing casualties.

Firefly Energy's CEO Edward F. Williams said the company believes its graphite foam lead acid battery "will ultimately have a dual use in both commercial and military applications. Electrolux was our first customer and provides a strong commercial volume base. Now we can set a course for more stringent military applications of our battery."

High-performance battery could aid troops

Mil Ovan, senior vice president and the other co-founder, said a graphite foam lead acid battery, unlike conventional lead acid batteries, lasts longer, is smaller, weighs significantly less because of the reduction of lead, sheds heat more effectively and can be re-charged faster. "This funding should produce a jump start for our researchers in more quickly developing vital military battery applications benefiting our troops in the field," he said.

U.S. Rep. Ray LaHood (R-IL), who announced the award, congratulated Firefly Energy "on its excellent work and the progress it has made." He visited the company's battery technology development center in 2005.

"Business-wise," LaHood added, "Peoria has come a long way in the past two decades. Firefly embodies the kind of innovative technology business that we are attracting to our area as we work to spur future growth and investment in our community."

LaHood said he was pleased that he and U.S. Sen. Dick Durbin (D-IL), could secure federal funding to assist in developing the 3-D advanced battery technology. "I look forward to seeing our nation's military benefiting from this investment," he concluded.

To help guide the company's defense industry initiatives, Firefly Energy has developed a strong board of advisors group, including retired four-star Gen. Wayne Downing and retired three-star Lt. Gen. Charles Mahan.

Downing said that using Firefly's technology would help the military's passive technology overwatch initiatives because sensors could be switched on and used without turning on the tank's main engine power.

"You can very silently watch the enemy, providing a great advantage on the battlefield."

About Firefly Energy

Firefly Energy (www.fireflyenergy.com) is a Peoria, Illinois-based company which has developed a next generation lead acid battery technology that has the opportunity to address major portions of the $30 billion worldwide battery marketplace. Firefly's graphite foam-based battery technology can deliver a unique combination of high performance, extremely low weight, low cost and, all in a battery which utilizes the best aspects of lead acid chemistry while overcoming the corrosive drawbacks of this same chemistry. This product technology delivers to battery markets a performance associated with advanced battery chemistries (Nickel Metal Hydride & Lithium), but for one-fifth the cost, and can be both manufactured as well as recycled within the existing lead acid battery industry's vast infrastructure. The company was formed after its technology, technical founder, and initial seed funds were spun out of Caterpillar, Inc. (www.cat.com), a Fortune 90 company, in May 20, 200603, and is headed by co-founders Edward Williams (CEO), Mil Ovan (Senior VP), and Kurtis Kelley (Chief Scientist). Investors include Caterpillar (www.cat.com) , BAE Systems (www.baesystems.com) (London Stock Exchange over the counter symbol:BAESY), Chicago-area Venture Capital firm KB Partners (www.kbpartners.com), the State of Illinois' Illinois Finance Authority, and Electrolux (www.electrolux.com) (SSE: ELUX-B).