Based on the successful Phase I effort, Fractal Systems Inc proposes to continue the development of lithium ion batteries with significantly improved energy density, charge retention and cycle life compared to existing Li-Ion technologies through the use of improved active materials for powering electronic equipment used by Homeland Security, and the military and commercial sectors. These cells consist of anodes made of high-surface area high-capacity silicon nanostructures with a morphology that, as we found out, allow to by-pass the effects of volume changes upon cycling. As a result, the cells will yield a long cycle life with minimal capacity fade. The cells built in conjunction with state-of-the-art cell components and packaging, to be optimized in Phase II, will be tested through charge/discharge cycling and energy capacity studies at various temperatures, followed by fabrication of prototypes as a deliverable and for marketing purposes. To ensure success of our effort, we have teamed up with a major battery R&D and manufacturing company. A viable lithium ion battery technology with much higher energy density than currently available will be of great value for portable electronics and appliances, vehicular applications, medical devices, satellites, electric storage for solar cells and wind power stations.