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NEAH POWER COMPLETES $500,000 CONVERTIBLE DEBENTURE OFFERING

November 16, 2007

Bothell, Wa - Neah Power Systems, Inc. (OTCBB: NPWS) announced it has completed a private placement of a convertible secured promissory note to institutional investor EPD Investment Co., LLC. The $500,000 unrestricted gross proceeds from the offering will help fund further progress in moving Neah Power's recently announced silicon-based fuel cell prototype toward a marketable product for the military and mobile life applications.

"We are delighted to be making this investment in Neah Power to assist management in its efforts to bring the company's commercial product to fruition and capitalize on its tremendous market potential," said Jerrold Pressman, chairman of EPD.

Daniel Rosen, executive chairman of Neah Power said, "We welcome the support and confidence EPD has shown Neah Power. This funding will aid our effrts to drive our prototype to commercialization."

The note, due January 1, 2009, carries an equity fee plus interest of 10% and is convertible into shares of common stock at $0.29 per share.

About Neah Power Systems

Neah Power Systems, Inc. is a leading developer of fuel cells for military applications, notebook computers and portable electronic devices. The company's patented, porous silicon-based design will provide long-lasting, efficient and safe power solutions. As an emerging leader in fuel cell technology, Neah Power's products will allow users to extend the operating time of 10 to 100 watt devices multiple times beyond that of conventional batteries. Further company information can be found at our website: www.neahpower.com.

Forward Looking Statements

Except for statements of historical fact, the matters discussed in this press release are forward looking 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. These risk factors include, among others, limited operating history, research and prototype delays, difficulties in developing and commercializing new technologies, and additional risk factors as discussed in the reports filed by the company with the Securities and Exchange Commission, which are available on its website at: http://www.sec.gov.

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