October 26, 2004 - Micro Power Receives $5 Million in Second Round Venture Capital Funding

October 26, 2004 - Leading battery system integrator Micro Power Electronics, Inc. today announced that it has received $5 million in a second round of venture capital investment. In May, Micro Power received $9 million in venture funding, bringing total venture investment to $14 million in less than six months. Palisades Ventures, Los Angeles, Calif., was lead investor in the second round, and was joined by Sierra Ventures, Menlo Park, Calif., which was the lead investor in the May round.

Micro Power’s focus is on one of the electronics industry’s fastest growing sectors – power solutions for portable, mission critical equipment. The company’s battery systems power close to 70 percent of all portable automatic external defibrillators in the market today. Micro Power is the only US Food and Drug Administration (FDA) registered supplier of custom battery systems for portable medical equipment. The company also serves the Automatic Identification and Data Collection (AIDC) and Radio Frequency Identification (RFID) data management markets, as well as certain portable sectors within the communication equipment market.

“There has been a surge of venture investment in battery technology over the past six months, reflecting the urgent need for battery systems technology to catch up with the number of portable systems coming into the market,” said Paul D’Addario, Palisades’ senior managing director. “We invested in this sector because we expect exceptional returns over the next few years. After assessing the investment opportunities in portable battery systems, we selected Micro Power. We decided to lead this round because of their dominant market position with the handheld AIDC and portable medical equipment manufacturers.

“Existing shareholders benefited from an increase in valuation for the company,” said Greg Love, Micro Power’s CEO. “This valuation increase was based upon Micro Power’s expanding customer base, 50 % increase in annual revenue, and enhanced technical capabilities. This investment will help Micro Power further expand its national sales operations, make strategic additions to its engineering and marketing teams, double existing product integration capabilities, and strengthen the company’s capabilities in charger technology.”

According to growth consulting firm Frost & Sullivan, the combined markets for portable medical devices, AIDC systems, wireless point-of-sale terminals and rugged handheld computing represents a $1 billion opportunity for custom battery solutions by 2008. “Portable electronic devices demand a next generation power source. Micro Power is able to provide a unique solution to satisfy this demand for additional power with its custom high performance battery systems, in addition to offering ultra safe battery systems for critical applications”, said Sara Bradford, industry manager in the power supplies and batteries group at Frost & Sullivan.

About Micro Power Electronics, Incorporated
Micro Power Electronics, Inc. is ISO 13485 and 9001:2008 certified, as well as ITAR registered. Micro Power supplies custom battery systems to the portable medical, handheld Automatic Identification and Data Collection (AIDC) and commercial military markets. As a pioneer in the development of Lithium battery systems, smart battery packs, chargers, power supplies and docking stations, Micro Power has more than 20 years of experience developing battery solutions. With a proven track record of technical excellence, quality solutions and award-winning service, Micro Power has become the fastest growing supplier of custom battery systems in North America. For more information, please visit www.micro-power.com or call 800-576-6177.

About Palisades Ventures
Palisades Ventures is a Los Angeles-based VC fund making growth stage investments in systems, services, software, and hardware companies that are driving the adoption of leading edge IT, communications, and media technologies. Palisades Ventures prefers to price deals and take a lead position with board participation. In certain situations, Palisades Ventures will join syndicated financings with other leading venture capital firms. The typical investment is between $2.5 and $7 million, with reserves for subsequent financings. For more information about Palisades Ventures, please visit www.palisadesventures.com.

About Sierra Ventures
Sierra Ventures, founded in 1982, is a privately held venture capital firm focused on investments across all areas of the Information Technology sector from semiconductors to enterprise software. Sierra Ventures has managed eight venture capital partnerships and currently has more than $1 billion of capital under management. For additional information, please visit www.sierraventures.com.