Neah Power Systems Settles Outstanding Debt With EPD Investment Co.

Neah Power Systems, Inc., (OTCBB: NPWS), a leading developer of fuel cells for military, industrial and consumer portable electronic devices, announced today that it has fully retired its debt obligation with EPD Investment Co., LLC of Los Angeles, which fully releases all claims on intellectual property, assets and other miscellaneous fees associated with the company.

“The original terms of the loan with EPD were considered, by the new board of directors, to be a major impediment in completing the interim financing of Neah Power. We are now proceeding with our funding and development plans,” said James H. Smith, chairman of the board of directors for Neah Power.

President and CEO of Neah Power Systems, Dr. Chris D’Couto, said, “This settlement with EPD eliminates a major concern that investors had with Neah Power. This loan was secured by the assets of the company, and this settlement enables the company to control and fully utilize its assets. This is a significant accomplishment for the company, and enables us to continue on our path towards commercialization.”

About Neah Power

Neah Power Systems, Inc. (NPWS) is developing long-lasting, efficient and safe power solutions for portable electronic devices, including military radios and other power-hungry products. Neah Power is also developing solutions for power storage for renewable energy and larger power generation application. The market size for portable power is estimated in the multi-billion dollar range by the research group Frost and Sullivan.

Neah Power uses a unique, patented, silicon-based design for its fuel cells that enable higher power densities. This enables lighter-weight, smaller form-factors and lower cost products, as well as an outsourced manufacturing model. The company’s fuel cell prototype which was demonstrated on September 28, 2007, is suitable for aerobic and anaerobic applications.

Further company information can be found at www.neahpower.com.

Forward-Looking Statements

This press release contains forward-looking statements and made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect numerous assumptions and involve a variety of risks and uncertainties, many of which are beyond the company’s control that may cause actual results to differ materially from stated expectations. Factors that might cause such material difference include, among others, our limited operating history, potential research and prototype delays, difficulties in developing and commercializing new technologies.