The Houston-Galveston Area Council (H-GAC) has been selected to negotiate the terms of a US Department of Energy (DOE) Zero Emission Cargo Transport (ZECT) Demonstration grant. (Earlier post.) If the grant is awarded, Vision Industries would supply a 20 Class 8 Tyrano fuel-cell-hybrid trucks to be deployed in the Houston-Galveston-Brazoria non-attainment area. (Earlier post.)
This award is conditional upon, among other things, final negotiations with the Department of Energy and the Air Quality Board of the State of Texas.
In the State of Texas, a Cleantech Alliance made up of Vision Industries, Total Transportation Services, Inc. (TTSI), Air Products & Chemicals, Wal-Mart, Port of Houston Authority, Houston-Galveston Area Council (H-GAC) and the Environmental Defense Fund submitted a grant proposal to the DOE under DE-FOA-0000669. This proposal is administered by H-GAC.
H-GAC received notification from DOE that it was selected for negotiations leading to an award. The submitted grant proposal is subject to a 48/52% cost-share between the DOE and the Cleantech Alliance. The DOE award size would be approximately $3.4 million. The Tyrano fuel cell trucks would be deployed
Trucks sold by Vision in connection with these grants would be purchased by Total Transportation Services, Inc. (TTSI). These trucks are not part of and are in addition to the previously announced TTSI Truck Purchase Agreement. (Earlier post.) Truck purchases in connection with the TTSI Truck Purchase Agreement remain subject to the satisfaction of conditions precedent, including the issuance of other government grants.
Final contracts with the Department of Energy and the Texas Air Quality Board are expected to be signed by mid-December of 2012.
Vision said it would require significant additional investment to execute its obligations under the grant. On 24 September 2012, the company signed a non-binding term sheet with an investor for the acquisition of a majority interest in the company. The term sheet contains a binding confidentiality provision and a 45-day no shop / exclusivity provision which may be extended. The transaction would result in a change in control of the company and would be dilutive to existing shareholders.
Vision anticipates that it will continue to generate losses after the grant program is executed.