PHEV conversion company Echo Automotive completes $3M financing, joins CALSTART
27 May 2013
Echo Automotive, Inc., a developer of technologies enabling the conversion of existing fleet vehicles into plug-in hybrid electric vehicles, completed a $3-million financing with United Fleet Financing, LLC, through a private placement offering and mezzanine financing.
Echo’s Chief Technology Officer is John Waters, the founder & CEO of Bright Automotive (earlier post). Among his other career achievements are launching the lithium battery business for Delphi Electronics, including the Segway battery pack; project lead for production and battery pack design of GM’s EV1 electric car; and VP of Transportation at Rocky Mountain Institute (RMI).
The EchoDrive conversion system comprises a 30 kW traction motor; modular Li-ion battery pack built with 2.2 kWh modules; 650A inverter and power electronics; on-board charger; and hybrid controls. The company is targeting Class 1-5 fleet trucks, and has entered a service agreement with Meineke Car Care Centers, Inc. and Dickenson Fleet Services to serve as a national service centers and installers.
This $3,000,000 infusion of working capital will allow us to ramp up our order fulfillment operations and meet the growing demand for EchoDrive kits more quickly.—Dan Kennedy, Echo’s CEO
Echo authorized the sale and issuance of up to 2,727,273 units of its securities to United Fleet in a private placement for the purpose of raising working capital to accelerate its business plan. Each unit consists of one share of the common stock at $0.55 per share and one warrant exercisable to purchase one and one-quarter (1.25) shares of common stock at an exercise price per share of $0.65. The proceeds will be provided by United Fleet on a tranche basis with monthly installments for nine (9) months starting June 2013.
Additionally, United Fleet and Echo consummated a financing and security agreement in which United Fleet agreed to provide an additional $1,500,000 of working capital for Echo through mezzanine financing.
The mezzanine financing is a five (5) year secured note with accrued interest at an annual rate of eight percent (8%). The terms of this note include conversion features at $0.55 per share and warrant rights with a strike price of $0.65. This additional working capital will also be provided to the Company in nine (9) monthly installments starting June 2013.
Separately, Echo joined CALSTART, a leading North American advanced transportation technologies consortium, to accelerate awareness and adoption of its bolt-on hybrid solutions.
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