14 NOVEMBER 2007

APPLIED INTELLECTUAL CAPITAL

ESTABLISHMENT OF REDOX BIOFUELS LTD., TO COMMERCIALISE AIC’S MMR TECHNOLOGY IN BIOFUEL APPLICATIONS

Applied Intellectual Capital (“AIC”) (AIM: AINC) is pleased to announce the formation of a wholly-owned subsidiary RedOx Biofuels Limited (“RedOx”), the purpose of which is to commercialise AIC’s proprietary metal mediated redox (“MMR”) technology for use in the production of biofuels from a variety of ligno-cellulosic feedstocks.

RedOx is establishing operations in the UK and US, initially using AIC’s facilities. Stephen Clarke, AIC’s Chief Executive, will be elected to RedOx’s Board as Chairman, Kim Ogaard-Nielsen formerly of Group Lotus plc, will be appointed as its Chief Operating Officer, Richard Varjian will act as CTO and Robert Clarke will lead the Technical Advisory Board.

Separately, on 12th November 2007, AIC executed a Heads of Agreement (“HoA”) with the majority shareholders and Board of Directors of an AIM listed cash shell whose shares are currently suspended and which holds approximately $7M in cash and liquid assets. The HoA outlines the acquisition of RedOx by the cash shell, which will constitute a Reverse Takeover under the AIM Rules, on the following key terms:

• The cash shell will change its name to RedOx Biofuels plc (“RedOx plc”) and trading of its ordinary shares will then recommence on AIM;
  
• RedOx plc will acquire the rights, associated know-how, patents, patent applications and other proprietary information (“Background IP”) that will enable it to fully exploit and commercialise AIC’s MMR technology in biofuel applications;
  
  
• In exchange for the transfer of such rights, together with US$5 million in development funds, AIC will be issued with new ordinary shares in RedOx plc, representing 85 per cent. of RedOx plc’s enlarged issued share capital;
  
• AIC will have exclusive rights to the Background IP for use in applications outside of biofuels.

AIC and RedOx have now begun formal due diligence activities with the cash shell, upon the successful completion of which, an estimated timetable for the completion of the transaction will be announced.

MMR technology has been used by AIC and its founders for the electrochemical synthesis of a number materials including complex organic molecules such as anthraquinone. AIC believes that it is unique in using electrochemical synthesis in biofuel production and that its approach provides for more optimal processing of the cellulose, hemicellulose and lignin components of ligno-cellulosic feed stocks. In turn, this should allow RedOx to achieve better yields and higher value fuels from a broader range of feedstocks than is currently possible with either acid hydrolysis or enzymatic processes.

On 23 April 2007, AIC announced that it had conducted successful laboratory tests of the MMR process. Waste cotton was converted into an ethanol feedstock. Waste cotton cloth was deliberately chosen by AIC as an example of a low cost, non-food feedstock for biofuels.

AIC has now developed the technology to the point that it believes it can scale up its process to produce ethanol economically from a commercially useful range of feed stock options. Importantly, AIC already has pilot scale and full scale equipment designs for MMR systems at an advanced stage of development and is currently building a number of mobile demonstration systems. Sized at 800-4000 liters per day of production, the first of these systems is planned for deployment during 2008.

The Directors of AIC believe the proposed transaction to be entirely consistent with its strategy of accelerating value creation from its core portfolio of electrochemistry technologies. AIC seeks to transfer the rights to exploit these technologies, which have already undergone stringent laboratory testing and which have real and immediate commercial applications, to entities with resources and know-how to exploit them. In each case, AIC retains a significant degree of control and a financial interest, allowing shareholders to benefit from any future upside.

Dr Stephen Clarke, CEO of AIC, commented:

“Unlike other players in this space, we believe that our unique and proprietary MMR technology can deliver a significantly cheaper solution from raw materials which are currently considered to be waste. To our knowledge, we are the only business that has delivered electrochemical synthesis of biofuels as a viable and near-term commercial alternative to acid hydrolysis and enzymatic approaches.”

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ENQUIRIES:

Applied Intellectual Capital
Dr. Stephen Clarke
Tel. Tel. +1 925 639 9399

Pelham Public Relations
Archie Berens Tel. +44 (0) 20 7743 6679 / +44 (0)7802 442486

Nabarro Wells & Co. Limited
Tel. +44 (0) 20 7710 7400
Marc Cramsie
Harry Stockdale

NOTES FOR EDITORS

About AIC
AIC is an AIM listed company that funds, develops, patents and commercialises electrochemical and advanced separations technologies in clean energy, electricity storage, water treatment, metals recovery and other emerging markets. AIC listed on AIM in January 2007 and currently has a market capitalisation of approximately £106 million.

RedOx Biofuels Plc is a subsidiary of Applied Intellectual Capital (AIC), which joined the London AIM (AINC) in January 2007. For more information, visit AIC or email admin@apicap.com