This is actually
excellent news for the future of the EStor protocol. It also makes clear what present status actually
looks like. Not unexpectedly designing
the optimum polymers for the working layers has turned out to be non-trivial
and naturally time consuming as we run layer after layer through the test bed.
Again the powder successfully
produced is the foundational element that drives the system. That is a done deal for some time. Making it all work properly at the necessary scaling
had to be difficult but not insurmountable.
Recall Edison’s efforts to produce a working light bulb.
EEStor has a process
that can work in theory and very plausibly in commercial settings. Getting there is never fun and patience
challenging. I am impressed that Zenn
stepped up and has proven the patience and has now asserted a controlling interest. This means a new disclosure regime will be in
place. News should be quickly
forthcoming as it becomes available from now on.
Zenn Completes
Acquisition of Controlling Stake in EEStor
January
27, 2014, 8:05 a.m. ET
TORONTO,
ONTARIO--(Marketwired - Jan. 27, 2014) - ZENN Motor Company Inc. (TSX
VENTURE:ZNN) ("ZENN" or the "Company") announced today that
it has completed the transactions contemplated by the investment agreement (the
"Investment Agreement") entered into with EEStor, Inc.
("EEStor") and certain directors, officers and significant
shareholders of EEStor (the "EEStor Principals") and announced by
ZENN on December 23, 2013.
ZENN
has acquired 369,167 shares of Series A1 Preferred Stock ("Series A1
Shares") of EEStor from treasury in consideration for an aggregate cash
investment of US$1.0 million. The Series A1 Shares carry one vote per share and
rank equally and have identical terms to the Series A Preferred Shares recently
acquired by ZENN other than in respect of the amount of priority entitlement on
liquidation or wind-up. The issuance of the Series A1 Shares provided ZENN with
combined holdings of 51% of the outstanding equity and voting shares of EEStor
on an as-converted basis.
In
addition, the EEStor Principals and their immediate family members exercised in
full a right granted at closing to exchange up to 360,000 of their EEStor
common shares for common shares of ZENN on the basis of 15 ZENN common shares
for each EEStor share so exchanged. ZENN issued 5,400,000 common shares in
connection with this share exchange. Following the acquisition of the
additional 360,000 EEStor common shares, ZENN now owns approximately 68.4% of
the equity and voting shares of EEStor on an as-converted basis. ZENN has also
been granted the right to acquire all remaining EEStor shares held by the
EEStor Principals and their immediate family members at an agreed upon value or
fair value as determined by an independent valuator if agreement cannot be
reached at any time before a merger of ZENN and EEStor, which the parties have
agreed to explore.
In
consideration for their facilitation of the financing transaction and changes
in the board and management of EEStor, the EEStor Principals have been issued
an aggregate of 600,000 common shares of ZENN, 150,000 of which are held in
escrow and will be released after 4-months subject to the satisfaction of
certain conditions. All 6,000,000 common shares of ZENN issued pursuant to the
Investment Agreement are subject to a 4-month hold period in Canada.
The
board of directors of EEStor has been reconstituted to six members, two of whom
are to be nominated by the EEStor Principals provided that they and their
immediate family members continue to hold at least 15% of the EEStor voting
shares, and four of whom will be nominated by ZENN, provided that two must be
independent of ZENN and EEStor. Upon closing, Stewart Somers and Roger Hammock,
current directors of ZENN were appointed to the EEStor board. The EEStor board
now is comprised of five directors with a sixth independent director to be
nominated by ZENN to fill the current vacancy.
At
closing, Richard Weir, a co-founder of EEStor, resigned as Chief Executive
Officer and was appointed as Honorary Chairman, Founder and Chief Science
Officer of EEStor. The current CFO of EEStor will stay on for a transitional
period of three months. During the transition period the new EEStor board will
look to fill the roles of CEO and CFO.
EEStor
has engaged Mr. Jamin Patrick as a consultant for the transition period during
which time Mr. Patrick will lead the transition and assist in the development
of a plan for EEStor going forward. Mr. Patrick holds Bachelor of Science
(Engineering) and MBA degrees and was most recently President of Thermal
Dynamics, LLC, a California-based Tier 1 supplier of heat exchangers to vehicle
original equipment manufacturers. Mr. Patrick has also served as Director of
the Austin Technology Incubator and Managing Director of the Austin office of
garage.com (now Garage Technology Ventures), where he worked with early stage
technology companies. In addition, EEStor is forming a Technical Advisory
Committee for the transition period. The Committee will report to the Board and
Mr. Patrick and will assist in evaluating both the state of the current EEStor
technology and its potential applications. The Committee is to be comprised of
leading individuals with backgrounds in science, industry and academics. It is
expected that after the transition period the Committee will be formalized on a
longer term basis.
James
Kofman, Chairman of ZENN commented, "The completion of these transactions
represents a very important milestone for both ZENN and EEStor. ZENN is now in
a position to assist and direct EEStor as it pursues the development of its
technology. There has been uncertainty about the current state of EEStor
technology and of testing results. The immediate priority of the companies is
to complete development of reliable testing protocols and to develop an
understanding of where the technology stands today. Mr. Weir will be in a
position to give his undivided attention to the continued development of the
EESU layers." Mr. Kofman added, "Through these transactions and the
prior purchase of Series A Preferred Stock in EEStor from various vendors in
December, 2013, ZENN has increased its ownership of EEStor by over 500% while
only increasing its shares outstanding by approximately 34%. Should the EEStor
technology prove successful, ZENN shareholders will have dramatically increased
their exposure to the upside through these deals; of course it all depends on
developing and proving the technology. We are fortunate to have an individual
as capable as Mr. Patrick to help us assess the opportunities and to plan a
path forward. We welcome the Weirs as shareholders of ZENN and we are pleased
to see that our interests are now fully aligned."
During
the transition period ZENN and EEStor expect to:
-- Settle on appropriate testing protocols
-- Test sample layers previously produced
-- Continue to work on the development of
new EESU layers using new polymer formulations
-- Analyze the powders and other materials
produced by EEStor to better understand their potential
--
Assess, based on testing results, the potential of the EESU layers for both
energy storage and other applications, including existing capacitor markets
--
Review the needs of EEStor from a personnel, equipment and financial perspective
-- Develop a plan based on the state of the
technology to move the technology
forward
--
Discuss with potential partners the opportunity to work together and accelerate
the opportunities for EEStor
About
ZENN Motor Company Inc.
The
Company's goal is to be the provider of leading edge power storage solutions
and related technologies. Through its 68% ownership of EEStor, ZENN is involved
in the development of electrical energy storage units (EESUs) based on
capacitors. Further, through its technology agreement with EEStor, ZENN has the
exclusive rights to utilize the technology, if developed, in most vehicle
applications.
EEStor's
energy storage technology is still under development and a number of further
development milestones must be achieved before commercial viability can be
established. There are significant risks associated with the development of new
technologies such as EEStor's energy storage technology and readers are
directed to the "Risk Factors" disclosed in ZENN's most recent Annual
Information Form filed on SEDAR.
Neither
TSX Venture Exchange nor its Regulation Services Provider (as that term is
defined in the policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
ZENN
Motor Company Inc.
Natasha
Vandesluis
Chief
Financial Officer
416-535-8395
ext. 220
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