Earlier in July, ZENN Motor Company Inc. (ZMC) increased its equity investment in energy storage developer, EEStor, Inc. with an additional US $5.0 million investment. The additional equity investment option was triggered by EEStor’s successful completion of permittivity testing on their Composition Modified Barium-Titanate powders (earlier post), a key milestone under the Technology Agreement between ZMC and EEStor.
ZMC now owns approximately 10.7% of the equity of EEStor, Inc., an increase from the 3.8% previously held. The company said that its ability to maximize its investment in EEStor is a result of certain EEStor shareholders not exercising their follow-on investment rights. These investors had also elected not to participate at the time of ZMC’s initial EEStor investment in April 2007.
Under its Technology Agreement with EEStor, ZMC holds the worldwide exclusive rights to incorporate EEStor’s energy storage technology (EESU) for new passenger vehicles up to 1,400 kilograms curb weight (net of batteries); golf carts, Low Speed Vehicles and certain utility vehicles; and the conversion of any class of used internal combustion 4-wheel vehicles to electric.
The EEStor EESU—a high-power-density multi-layered barium titanate ceramic ultracapacitor—is expected to provide energy densities of more than 450 Wh/kg and more than 700 Wh/L; charge in minutes; and have extremely long life.
EEStor has said it anticipates having at-voltage components verified independently by September of this year, with delivery of production prototype EESUs to ZMC by the end of 2009.
The new investment represents the exercise of the maximum additional investment option available to ZMC which was to acquire 117,757 shares at the same price-per-share as the original equity investment granted to ZMC pursuant to the share purchase agreement between ZMC and EEStor dated 30 April 2007. ZMC announced its intention to exercise this additional investment option on 21 May 2009.
Subsequent to its announcement of increasing its stake in EEStor, ZMC completed a previously announced short form prospectus offering of common shares, selling 2,650,000 shares at a price of $3.50 per share raising gross proceeds of C$9,275,000 (US$8.4 million). Net proceeds from this financing, together with existing working capital, is expected to be used to fund product, customer and business development, the final milestone payment to EEStor, Inc. and operating expenses and general corporate purposes.
The shares were offered by way of a short form prospectus in the provinces of Alberta, British Columbia and Ontario and in the United States on a private placement basis pursuant to an exemption from the registration requirements of the US Securities Act of 1933, as amended.
In trading on the TSX Venture Exchange yesterday (21 July), ZMC was the ninth most active security by value.
(Hat-tips to Marc and Brett!)