New Application of Technology
04.23.07

Applied Intellectual Capital ("AIC") is pleased to announce that it has successfully conducted laboratory trials of its proprietary Metal Mediated Redox ("MMR") technology in a process in which waste cotton was converted into a pure carbohydrate which was then converted into ethanol. Waste cotton cloth was chosen as a challenging example of a low cost feed stock for bio-fuels appropriate to automotive and aerospace applications.

As part of AIC's ongoing strategy commercialise its technologies, the Company is in discussions with several leading global industrial corporations with a view to collaborating to move this new process from the laboratory to full scale.

AIC's MMR technology is a closed loop process which is capable of "electrochemically digesting" a broad range of low cost organic based feedstocks, such as cellulose, plant matter, wood pulp, etc., and has the potential to produce a broad range of synthetic fuels, including ethanol.

In keeping with AIC's business model, MMR builds on a portfolio of pilot and full scale electrochemical systems that AIC has already developed for other applications. This potentially reduces the time and effort that will be required to scale up this technology.

This successful application of MMR involved minimal pre-treatment of the raw material and generated no secondary waste. Importantly, the economics of this process provide the potential to produce ethanol and other bio-fuels at high yield and at projected full scale costs which are significantly below the industry target for 2012 of US $1.07 per US gallon (US $0.28/litre) in the near term.

As reported elsewhere, manufacture of ethanol and other bio-fuels from abundant low cost sources such as cellulose or wood-based materials would clearly represent a highly attractive solution to a major resource issue. Attempts to achieve this in an efficient and cost effective manner have hitherto been focused on the bio-technology industry and enzyme based processes, which many consider to require considerable development before they are commercially viable. The laboratory tests conducted by AIC represent a significant scientific breakthrough. AIC has extensive patent filings and background IP protection for this technology and is now working to optimize the process to produce a broad range of sustainable fuels which are compatible with existing engines.

Dr Stephen Clarke, Chief Executive of AIC, commented:

"We think we have made significant progress toward solving a problem that is currently challenging the transition to economically viable and sustainable bio-fuels, namely the ability to produce a range of fuels from cellulose-based and lignin-based materials without wasting resources, money or energy. We have received expressions of interest from several corporations who are aware of our MMR technology and we believe they will find the results of these latest tests extremely interesting."

FOR FURTHER INFORMATION PLEASE CONTACT

Applied Intellectual Capital
Dr. Stephen Clarke
Tel. +1 510 463 0211

Mirabaud Securities Limited
Tel. +44 (0) 20 7321 2508
Peter Krens

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

Pelham Public Relations
Charles Vivian Tel. +44 (0) 20 7743 6672 / +44 (0)7977 297903
Archie Berens Tel. +44 (0) 20 7743 6679 / +44 (0)7802 442486