Following the completion of its strategic review, the board of directors of ZENN Motor Company Inc. (TSX-V: ZNN) has implemented a number of significant restructuring changes, including changes to its board and management.
ZENN Motor will be simplifying its corporate structure and focus its financial resources towards supporting its investment in EEStor, Inc. ZENN intends to increase its interaction with EEStor and, where appropriate, collaborate with and assist EEStor.
As part of the restructuring, Richard D. McGraw, founding Chairman, has resigned from the board and was replaced by James E. Kofman, previously Lead Director. Brian Cott has resigned as President & CEO effective immediately.
To reduce costs, ZENN Motor will make a further simplification and restructuring of the company.
EEStor was founded in 2001 by Richard Weir and Carl Nelson, former managers in disk storage design and manufacturing at IBM and Xerox. ZENN Motor holds an approximately 10.7% equity interest in EEStor and have made two equity investments in the aggregate amount of US $7.5 million.
In August 2004, ZENN Motor, tka Feel Good Cars Inc., signed the initial Technology Agreement with EEStor whereby upon payment of a total of US $2.5 million in milestone installments, ZENN Motor would have specific exclusive and non-exclusive rights to a high-energy-density ceramic ultra capacitor, Electrical Energy Storage Unit (EESU), being developed by EEStor.
The EEStor Technology Agreement was amended in January 2007 whereby ZENN Motor acquired exclusive rights to the automotive retrofit market for 4-wheel vehicles that utilize internal combustion, electric, (or a combination thereof) drive systems. In consideration, ZENN Motor gave up its exclusivity to certain lighter-weight high performance sports cars that might otherwise have fallen under the agreement.
EEStor has also received US $3 million funding from Kleiner Perkins Caufield & Byers.
ZENN Motor’s rights to purchase and resell the energy storage technology being developed by EEStor are subject to ZENN Motor’s making additional payments to EEStor on the achievement of certain technical milestones and otherwise complying with the terms of the Technology Agreement. Any failure to make the remaining milestone payment or to do so by the deadline dates required or to otherwise comply with the terms of the agreement, could result in the termination of ZENN Motor’s rights.
