Zenn Motor (TSXV:ZNN) today issued a press release in which it offered commment on an earlier press release from its partner EEStor.
The brief release from EEStor said the Texas-based company had “successfully completed production of an electrical energy storage unit (EESU) dielectric layer that will potentially allow its technology to achieve an energy density which would be competitive against all other electrical energy storage technologies. ” The release went on to say that EEStor: “plans to obtain third party testing and certification of the EESU.”
Zenn Chairman and interim CEO James Kofman said Zenn was “…disappointed that the agreed timeline has not been met.” Shareholders had been expecting that the third party verification would happen by today, as laid out in the revised agreement announced May 29th.
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Just last month, Versant analyst Massimo Fiore, who had reviewed the revised agreement between the pair after declaring Zenn a “Speculative Buy” in April, said it contained “Simple, well defined and clear milestones”. Fiore pointed out that the agreement gave Zenn favoured status with regard to pricing and the right to inform the public of technology milestones. Those milestones, he added, included providing third party verification on how EEStor has created a storage unit that has nearly three times the capacity of the next best technology, information the company said should be available by June 21st.
Nonetheless, Zenn’s Kofman says he remains “….optimistic that EEStor is committed to the disclosure it has agreed to.” adding “Having waited so long, it is clear that nothing short of disclosure certified by third parties will satisfy investors as to the capabilities of the EESUs. In entering into the investment agreement, Zenn was focused on getting investors the information they are waiting for. We understand that delays do not inspire confidence and are working hard to get the necessary disclosure.”
Zenn Motors, which was founded in 2000, originally planned to build its own “Zero Emission No Noise” electric cars. The result was NEV, or “Neighbourhood Electric Vehicle” which hit the markets in 2006. These vehicles were called LSV’s or “low-speed vehicles”, because their top speed was a mere 40 km/h. The NEV, however, never went into mass production. In 2009, Zenn decided to shift directions, and to instead focus on building a highway capable electric drive system to market to major auto manufacturers. In April of 2007, Zenn invested 2.5 million for 3.8% of EEStor, then increased that interest to 10.7% with another $5-million investment in mid-2009.
Shares of Zenn Motor closed today down 26.5% to $.75 cents.