Eatontown, N.J.-based Millennium Cell (Nasdaq: MCEL) said today it exchanged equity with Singapore's Horizon Fuel Cell Technologies as part of an agreement to jointly develop and sell hydrogen fuel cells.

Under the $5 million equity exchange, Horizon received 12 percent of Millennium's shares, with Millennium getting a note convertible into 7 percent of Horizon.

"Our development efforts are already underway and we will use our mutual strengths to expand our offerings and bring exciting new products to commercial and military markets," said George Gu, president and CEO of Horizon.

The one-month note from Horizon will automatically convert upon a vote by Horizon's shareholders.

"The objective is to generate product revenues for both Millennium Cell and Horizon in 2008 by leveraging our collective technologies, production capabilities and experience," said Adam Briggs, president of Millennium.

In August, Horizon licensed Millennium's hydrogen on demand technology to co-develop compatible hydrogen storage cartridges for Horizon fuel cell products (see Licensed to win).

Horizon recently demonstrated a 50 watt emergency power unit at the Ceatec Japan exhibition that was powered by Millennium's chemical hydride fuel technology.

The two plan to start selling the unit in 2008, with additional products for consumer and military use to be launched in 2008 and 2009.