Mechanical Technology Inc. said on Thursday ithat ts subsidiary has formed an exclusive alliance to develop fuel cells to power Samsung Electronics Co. mobile phones, sending its shares soaring.

Under the agreement, South Korea-based Samsung will pay $1 million in stages after receiving prototypes, according to a regulatory filing.

Mechanical Techology's shares were up 75 cents, or 24 percent, to $3.91 in afternoon trading on the Nasdaq. It had reached as high as $4.30 earlier in the session. The stock's 52-week peak is $5, reached late last month.

The subsidiary, MTI MicroFuel Cells Inc., will look to develop its direct methanol fuel cell technology to power Samsung phones and accessories.

The companies are looking for the fuel cells to run longer and recharge quicker than current rechargeable batteries.

They will develop, test and evaluate the technology jointly. Afterward, they said they intend to continue working together by entering into a product commercialization agreement.

MTI MicroFuel Cells is hoping its fuel-cell technology can work to power a range of portable consumer electronic devices, from digital cameras to handheld entertainment devices.