NEAH Implements Employee Retention Program to Help Achieve Company Goals

BOTHELL, Wash., Jul 16, 2010 -- NEAH Power Systems, Inc., www.neahpower.com, the company leading development in fuel cells for the military and portable electronic devices, announced today that in anticipation of its growth, it has increased the size of the option pool for key current and future employees of the company. This long term plan is exclusively for employees, directors and officers of the company.

Referring to the recently filed S-8, Dr. Chris D'Couto, President and CEO of Neah Power Systems said, "As we enter this next phase of growth, the Board and Management of the company intends to recruit, retain, and develop, key talent within the company by making them part owners of the company, and we believe this is in our shareholders interest. These incentives will be awarded to key employees and new hires over the following months, and the shares will vest over a one -- year period. A partial list of goals for the company for the next year includes shipments and revenue for the solar air-conditioning systems, deployment of our remote area power supplies (RAPS), shipment and revenue from our fuel cells to key customers, and continuous improvements to our technology to maintain the leading edge of performance."

About NEAH Power

NEAH Power Systems, Inc. (NPWZ.OB) is developing long-lasting, efficient and safe power solutions for the military and for portable electronic devices. NEAH uses a unique, patented, silicon-based design for its micro fuel cells that enable higher power densities, lower cost and compact form-factors. The company's micro fuel cell system can run in aerobic and anaerobic modes. Neah believes that the technology can also be used for energy storage and generation.

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