Zenn Motor Co. may have a name better associated with a sense of peace, but the company it has been connected to for years and has now agreed to buy does have a bit of uncertainty about it. Canada-based Zenn, which used to make and sell lead-acid battery-powered neighborhood-electric vehicles, has reached an agreement to buy a majority stake in energy-storage company and distribution partner EEStor.

Zenn will buy a 51 percent share of EEStor, agreeing to make staged cash payments totaling $1 million. As part of the agreement, EEStor's CEO and CFO will step down. And there's more to it, according to Green Car Congress, as product testing has revealed that the power-reproduction levels from EEStor's energy-storage systems are not consistent, making its products less than commercial-ready.

The announcement continues a bit of an ongoing theme for both companies. Last May, Zenn said it was upping its investment in EEStor, while EEStor said that its systems could handle ever more power storage but that commercial viability was still juuuuuuust out of reach and questions about the mythical EEStor ultracapacitor technology have been around for years. Zenn was founded in 2001, though its leadership has been in flux. In 2011, its founder Ian Clifford stepped down as CEO. That was followed up by the resignation of his successor Brian Cott a few months later. Still, Zenn's putting out press releases, so check out the most recent one below.
Show full PR text
ZENN SIGNS AGREEMENT TO ACQUIRE CONTROLLING STAKE IN EESTOR

Toronto, Ontario – December 23, 2013 –ZENN Motor Company Inc. (TSXV: ZNN; "ZENN" or the "Company") announced today that it has entered into an investment agreement (the "Investment Agreement") with EEStor, Inc. ("EEStor") and certain directors, officers and significant shareholders of EEStor (the "EEStor Principals") providing for the acquisition of a controlling stake in EEStor by ZENN and the reorganization of the board and management of EEStor. Under the Investment Agreement, in consideration for staged cash payments aggregating US$1.0 million, ZENN will be issued such number of Series A Preferred Shares of EEStor (in addition to the 502,344 Series A Preferred Shares ZENN is in the process of completing the acquisition of) such that, following the issuance of such shares ZENN will hold 51% of the outstanding equity and voting shares of EEStor on an as-converted and fully-diluted basis. ZENN has advanced EEStor US$50,000 of the purchase price on the signing of the Investment Agreement which will be converted to EEStor shares if closing occurs.

The Investment Agreement provides for the reconstitution of the EEStor board to six members, two of whom will be nominated by the EEStor Principals provided that they and their immediate family members continue to hold at least 15 of my time working to develop the EEStor technology."

Additionally, under the Investment Agreement the EEStor Principals and their immediate family members have the right to require ZENN, for a 60 day period following closing, to exchange up to 360,000 EEStor common shares for common shares of ZENN on the basis of 15 ZENN common shares for each EEStor share so exchanged. ZENN has been notified by the EEStor Principals that following closing they intend to immediately exchange the full 360,000 shares of EEStor into 5,400,000 shares of ZENN. Assuming completion of the US$1.0 million investment by ZENN and the exchange of the full 360,000 EEStor common shares for common shares of ZENN, ZENN would own approximately 67% of the equity and voting shares of EEStor on an as-converted basis. Under the Investment Agreement ZENN has the right to acquire all 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. Further, the parties have agreed to explore options for merging the companies.

James Kofman, Chairman of ZENN said, "The transaction fully aligns the interests of ZENN and EEStor." Ian Clifford, Founder of ZENN added, "It is a turning point for the two companies, we have finally created a structure for real partnership and collaboration".

The Investment Agreement is subject to a number of conditions including, completion of due diligence to the satisfaction of ZENN, all regulatory approvals, including the approval of the TSX Venture Exchange, completion of the previously announced purchase of 502,344 EEStor Series A Preferred Shares and approval of the ZENN board.

ZENN also announced that it is in the process of completing its previously announced purchase of 502,344 Series A Preferred Shares of EEStor and associated rights. The only outstanding item to the closing is the confirmation of receipt of electronic fund transfers which the Company expects to receive today.

About ZENN Motor Company Inc.
The Company's goal is to be the provider of leading edge power storage solutions and related technologies to the transportation industry. Technologies and solutions, powered by EEStor's electrical energy storage units (EESU) have the potential to enable OEM and Tier 1 partners to deliver advanced electric transportation solutions to their customers.

Information contained in this release relating to EEStor, Inc. or the energy storage technology being developed by EEStor has not been reviewed by EEStor and EEStor does not assume any responsibility for the accuracy or completeness of such information.

Unless otherwise indicated, public disclosures by EEStor of developments in the commercialization of its energy storage technology have not been independently verified by ZENN. 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


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  • 27 Comments
      • 11 Months Ago
      Amazing how the EEStor skeptics all seem to think it's a scam. It could very likely be something much simpler a case of underestimating the difficulty of an undertaking. Is EEStor years late in developing a viable ultra capacitor for powering an EV? Yes. Has it taken much more time and money to do than the principals at EEStor estimated? Yes. Has Zenn had to invest more than they expected? Yes. Does this prove it must be a scam? No, It could well be that Dick Weir and others have been working their tails off to build a viable product. And if they succeed, the world will be changed. They will be vindicated, and the chorus of skeptics will. be silenced. If they have to shut down for lack of funding, it won't be the first time a start up had to shut down for lack of funding. And we will never know whether they might have succeeded with more funding. I have no stake in tFor the sake of the world,heir success. But, For the sake of the world, I sure hope they succeed. And success wii shut their carping critics up forever.
        PeterScott
        • 11 Months Ago
        We aren't skeptics, we are realists. It isn't just being late. This has all the hallmarks of a total scam. It is being ridiculously late, after making all kinds of claims that experts in the field said were impossible from the start, and the failure to demonstrate even a prototype as of yet. Behavior ranging from inexplicable to shady, hyping an impossible product to sucker gullible investors. Multiple promised dates of shipping product for cars, but they still can't even demonstrate a small prototype 7 years AFTER they claimed it would be in cars. If this was real, they could get a lot more than $1million dollars for 51% of the company. They could get Billions if EEstor was real, and if they are selling out controlling interest in the company, it makes sense to partner with a technology company that can actually bring the devices to market, not a NEV builder. I have no trouble calling these people scammers. They should really be in jail by now, IMO.
        2 wheeled menace
        • 11 Months Ago
        So hey; Why would such an awesome startup not get enough funding? They've been around since 2005 and have received $50-100 million dollars in funding and not produced a damn thing. But there is always that one guy who still believes in magic in his heart..
          PeterScott
          • 11 Months Ago
          @2 wheeled menace
          "...not produced a damn thing." I think they produced a nice retirement fund for the "inventors".
        danfred311
        • 11 Months Ago
        Tom, given the scandal and ridicule of the oceans of broken promises and their secrecy, any reasonable person would be more open about it if it wasn't a scam/deranged. Even the tiniest demonstration would go a long way to restore their credibility. But they have exactly nothing and iirc they had some failures to meet external tests. The summary pictures that the facts draw is scathing in the extreme. It is a great mystery how a mind can fail in such a unique fashion as EEstor and Zenn continues to do. former Zenn ceo Ian was caught scamming as well iirc. He is quite the rat. It is simply naive at this point to give them any benefit of doubt.
      rick.danger
      • 11 Months Ago
      The last I heard, EEstor promised to show a working prototype by the end of 2008. That was after they promised to show one in 2007. The last I heard, ZENN quit selling vehicles a few years ago too. So where did they get a million dollars to invest, and why would they even want to? Must be nice to own 51% of nothing. I was hoping I'd heard the last of either of them.
      Grendal
      • 11 Months Ago
      A sad conclusion to a sordid tale. I wonder how real any of it was. Eestor managed to convince Zenn to give them a lot of money. It sounds like Zenn is at the "we've shelled out so much money, what's another couple million to see this to the bitter end?" position. Oh well.
        Joeviocoe
        • 11 Months Ago
        @Grendal
        Unfortunately we both know this is not the conclusion. The "thin edge of the wedge," is a very real, reliable and powerful method to bilk money.. From private investors to government politicians
      PeterScott
      • 11 Months Ago
      This Scam has amazing legs. I think I first heard of EEStor in 2006, when they claimed it would be shipping in cars in 2007. I figured this was a scam from the beginning, but I never figured it would last this long. The gullibility of some people knows no bounds I guess.
      danfred311
      • 11 Months Ago
      I believe it now! :)
      rcavaretti
      • 11 Months Ago
      I have no doubt EEstor is working on something. It just isn't working out as planned. It happens. Move on.
      krona2k
      • 11 Months Ago
      Scam to acquire 51% of Scam for peanuts.
      sirvixisvexed
      • 11 Months Ago
      I laughed as soon as I saw the article and laughed through every word while reading it, and then when I was done, wept at the realization that I actually gave the time to read an entire article about Zenn and EEstor. I feel like an EEwhore
      James
      • 11 Months Ago
      Vaporware.
      motorhead
      • 11 Months Ago
      "besides contemplating their navels?" How about selling EB-5 immigration visas to Chinese like GreenTech Automotive?
      Smoking_dude
      • 11 Months Ago
      It really sucks that they never made a real product. I mean imagine a Tesla that could be recharged even faster than at a supercharger. Imagine a robust and slow aging battery. but its vaporware. but with the combined POWER of ZENN and EESTORE they will become the real leader. :D
      • 10 Months Ago
      EEstor's history seems to parallel development of the lithium sulfur battery at Argonne National Laboratories, successful, sort of. There were patents and demos and cool apps, but then the laboratory, the people, and even the products didn't exactly survive!! And judging by the huge blast craters on the ceilings at Argonne and by the bent steel beams, it must have been the best of times and the worst of times all the way from microcrack to mega blast. But you see I don't care....., I just want to store 300 kwh in a blast insensitive location, how hard can that be? I stick this thing in a fenced pit, far, far from traffic and friends, I store enough energy to heat my house, we do this 20,000 times, we don't shake it, don't look at it sideways, no rear end collisions, no microcracks, everybody lives happily ever after. If the night sky is suddently illuminated with a couple thousand cubic feet of hot plasma... who..... cares? Propane is $5.28 a gallon and I'm using 1200 gallons per year, really, do the math. That's a lot of lithium and sulfur, a lot of little aluminum coated titanium pellets. But $60,000 (min.) over 10 years? You could easily afford a couple of 30 ft diam, 10kw windmills and 20 solar panel thermal panels for that kind of bread, seriously. But you can't afford to wait, and you can't afford 300 solar electric panels with only 5% efficiency!
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