Coastal Hydrogen Energy, Inc. is moving forward with the construction of its dedicated prototype for the production of hydrogen from water using its unique photocatalytic process. The prototype should be in operation in September. We are presently making hydrogen from water in preliminary tests of specific catalysts, and the results are promising.

We recently received an office action from the USPTO indicating that a second patent will be granted covering core advancements in our technology. Our first patent was granted in December of 2003. A third patent application is also pending.

Under an agreement with Oklahoma State University, we will be moving our new prototype into OSU's chemistry lab. We are working in collaboration with Dr. Allen Apblett, an OSU professor and noted catalytic chemist who is a member of our Science Team.

Since our March presentation to Silicom Ventures, we have raised additional capital through the sale of shares to our existing shareholders and new shareholders. We are open to discussion of further investment with interested parties.

Best regards,


Jonathan C. Neff
Coastal Hydrogen Energy, Inc.