TheEEStory.com

Help me out maybe I am missing something. Zenn simply announced that they haved up their investment (5mil) in eestor. This option has been posted for a while. There is no mention of diluting zenn shares to raise money and even if they do that is normal. In the short term it lowers share price, spec plays are not for the faint of heart, but raising money can be prudent for the long term. Does anyone know where zenn is getting their capitol (5mil)? Zenn is down 10% @ 166k volume, they have traded shares in millions on lesser news so what is so abnormal? In the announcement it said,
"The investment represents the exercise of the maximum additional investment option available to the Company 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 April 30, 2007. The Company's intention to exercise this additional investment option was previously announced on May 21, 2009." How can they aquire 117,757 of a private co?

Actually, there has been news of a share offering. Maximum projected dilution is about 12%. However, that news has been out a while, so it should not be having a big affect today.

I don't know that is why I am putting it out there. If it is 12% then zenn stock seems to be in line.

When you start a corporation you decide how many shares you want for the forseeable future, even if you don't issue them. Most Mom and Pop corporations in NY get 200 shares of no-par stock as part of their basic incorporation. They normally only issue one or two shares to the immediate owners of the company. Sometimes if they have a key employee they will issue all the stock with a small share to the key employee.
In the case of a more serious company they will get authority to issue more shares with the idea of issuing it to investors. Any serious company is going to require certain administrative staff (Accountant, IT person, General Counsel, etc.) and needs some of these people on board before they can start fund raising and prefer to work out a deal where they give these employees options or warrants to purchase stock. there are several ways to handle this for tax purposes. If they receive stock in lieu of salary they have to pay taxes and FICA. So to answer the question, a private company can sell stock to private individuals. It's the way they do it that determines whether or not it's a public offering subject to government supervision.

Cool thanks

Starchild, the reason some here seem to think "The sky is falling!" is because Kleiner Perkins has (reportedly) declined to invest more money in EEStor, and they see that as indicating a lack of confidence.

This is, of course, pure speculation. Presuming KP has indeed declined to make further investment, we still need to know *why* they declined, in order to understand the significance of that. One or two forum members said that KP does not buy "common stock", only "preferred stock", and the latter was not being offered. If that's true, then we need look no further for an explanation.

Lensman wrote:

Starchild, the reason some here seem to think "The sky is falling!" is because Kleiner Perkins has (reportedly) declined to invest more money in EEStor, and they see that as indicating a lack of confidence.

This is, of course, pure speculation. Presuming KP has indeed declined to make further investment, we still need to know *why* they declined, in order to understand the significance of that. One or two forum members said that KP does not buy "common stock", only "preferred stock", and the latter was not being offered. If that's true, then we need look no further for an explanation.

Everybody seems to discount the fact that prior investors appear to continue to be invested. Presumably, they're happy for now with their participation level.

The big guys (KP) has decided that they will "allow" znn to take the 10+% of EEstor if they themself have a good part of the future golden znn through the new direct offering that give them a part of the company. They know where the future are heading and want to be part of it! - So now is a golden oppertunity to go in while the shares in znn still are low because of stressed out smallinvestors distress sales. Myself is now at 35000 ZNN - and are still buying.

wow 35,000 shares nice. I am impressed. You defintely sound like you know what you are talking about.

I have 15,000 shares and holding steady. Not sure if I want to move any more money around to buy more shares. I am invested at a level I am comfortable with and willing to lose most, if not all.

Even at 15,000 shares the upside return is sweet.

Do the "other" investors have the same level of access to information from eestor that zmc has? If they did not invest originally, why would they? Have to admit all is not clear on who is who and what is what, but has anything been that clear so far? As they say at the carnival, "pay your money and take your chance."

dfwrunner wrote:

Everybody seems to discount the fact that prior investors appear to continue to be invested. Presumably, they're happy for now with their participation level.

When have they had an opportunity to divest?

Robert

We don't know who these "other" investors are, and this particular group is not likely to include KP as indicated by their preferred shares category. These other investors are not likely to have signed a NDA, so they don't know any more than we do, but it does seem that they have lost faith by not increasing their investment.

Innovator wrote:

We don't know who these "other" investors are, and this particular group is not likely to include KP as indicated by their preferred shares category. These other investors are not likely to have signed a NDA, so they don't know any more than we do, but it does seem that they have lost faith by not increasing their investment.

I have thought about this quite a bit.. no matter how and slice and dice it, I cannot see how the "other investors" did not exercise their options.

I cannot fathom that these early investors do not have the same info available to ZNN.

According to Ian, what is left is just standard manufacturing processes. If this is true, we are talking about the holy grail of batteries. Why would they not want to invest?

Still keeping eestor as valid, the only conclusion that I can make is that
The cost of this thing is nowhere near originally predicted. This would be quite close to where lithium is today.

Since there is significant investment made in lithium, this would stay ahead of eestor.

Hi Guys, I posted the article below in another string of theeestory.

"Just one possible hypothesis ....

But E_Po may have no good reason to smile and he certainly has no right to. From where I am sitting "technology risk" hasn't changed.

I have been travelling for 36 hrs and when I have landed how fascinating is it for me to find these posts ?!!!!

So we now have the stuff on the table of which for me at least, both dreams and speculation are made :-)

So why don't I add to the pot. What hasn't happened?

The first is that no-one appears to have sold their stakes in either ZMC or EEStor. The second is that no-one (only ZMC) have taken up the option to increase their EEStor stake.

ZMC has arguably the inside running on the use of the EESU technology, if and when it is available. ZMC now has a credible percentage in EEStor at approx. 10%.

Now think like investors guys. None of you on this string are yet. What does this open up?

There are only two parties whose game is on the move. One is ZMC for whom the raising of funds appears (from their public statements) to be their next move. The other is MT who has "cleared the decks for action" by resigning as a director of EEStor. (i.e. no longer with insider trading knowledge)

Before discussing this let's first look at the side show.

What about the other three parties (other than KP who probably had no right) who could have exercised their rights? Well, they didn't; which suggests at least four possible motives. The first is that they outright didn't have confidence in the EESU. The second is that they did not have rights of disclosure on the progress/success of the EESU. The third is that they did not have the funds (times are tough), and the fourth is only that their main pre-occupation is with avoidance of stake dilution.

What we do know is that if the EESU is for real, the Obama energy gravy train will fund EEStor to the hilt. So this tidy up of the capital structure may be the last major play before we have "lift-off". All that may have happened is the tidy up of EEStor capitalisation and funding in a way that had been contemplated by the parties a couple of years ago - perhaps they are all hanging together tighter than before. (hey you can't blame a guy for dreaming).

So now all the key players could well have firmed up on their stakes in EEStor.

Lt's return to ZMC insiders who must also be concerned about the dilution of their equity in ZMC. The size of funding needed for ZMC is sufficiently great that one could see perhaps only two likely possibilities for fund raising. The first being the raising of funds from insiders or anyone else who knows what is happening. The other is that they take pot luck on what the market will offer for a highly illiquid share.

Note the word "illiquid". There has been no significant movement in the ZNN price for some time. The smart money and the insider money is going no-place.

It is a while since ZMC announced it's preliminary intent to raise capital.

A longer while since MT resigned from EEStor. So there are three substantial players on the sidelines who probably do know what is happening. MT, KP and LM.

Would any of these want to buy into the company with the first mover rights to utlitise technology where preservation of first mover advantage is demonstrably a key stratagem?

Alternatively, would IC want to water down his holding where the open market price could otherwise be as low as CAD1.50-2.00?

We have seen what could be the side shows, but what is the main event going to show us? The main event will be the price asked for shares and the degree of dilution palatable for the insiders.

On "techology risk" Y_Po may be right or he may be wrong - and either way I am not fussed. But remember Y_Po, he who laughs last, laughs longest and you may well yet be wrong over technology risk.

But to me, the move at 4.50pm on 2 July is not about technology, it is about business."

I hope this adds to your posting options :-)

Innovator wrote:

We don't know who these "other" investors are, and this particular group is not likely to include KP as indicated by their preferred shares category. These other investors are not likely to have signed a NDA, so they don't know any more than we do, but it does seem that they have lost faith by not increasing their investment.

we are pretty sure who are the investors there was a file with all of them on there.

This is pitiful. Look at all of the hype about eestor. The investors are going to be filthy rich, Zenn will be worth billions, it is the greatest invention in history, it will change the world, etc. Why would KP decline to get peice of that? But now the lack of KP investment is down played. You can not have it both ways. Either it is the greatest and worth billions (in which case KP would never turn it down) or it is not. KP has far more experts, more money and more experience than Zenn at bringing a new product to the market and getting a big return on their investemnt. KP does not turn down billions of dollars for any reason.

right on cechilders
the old saying is significant here,
'if it seems too good to be true, it probably isn't'
we've all been had.
How many times have promises been given in this saga.
How many times have these promises been broken.
Let's wake up and smell the coffee.
It's like these perpetual motion machine stories that have been circling.
It just ain't so.

vine wrote:

I have thought about this quite a bit.. no matter how and slice and dice it, I cannot see how the "other investors" did not exercise their options.

I cannot fathom that these early investors do not have the same info available to ZNN.

According to Ian, what is left is just standard manufacturing processes. If this is true, we are talking about the holy grail of batteries. Why would they not want to invest?

Still keeping eestor as valid, the only conclusion that I can make is that
The cost of this thing is nowhere near originally predicted. This would be quite close to where lithium is today.

Since there is significant investment made in lithium, this would stay ahead of eestor.

Isn't it illegal for someone to buy shares on the basis of information the public does not have? (Unless they follow the SEC rules for advanced disclosure...maybe Canada rules are different, but I can't imagine any country allowing insider trading)

CapacitorMan wrote:

vine wrote:

I have thought about this quite a bit.. no matter how and slice and dice it, I cannot see how the "other investors" did not exercise their options.

I cannot fathom that these early investors do not have the same info available to ZNN.

According to Ian, what is left is just standard manufacturing processes. If this is true, we are talking about the holy grail of batteries. Why would they not want to invest?

Still keeping eestor as valid, the only conclusion that I can make is that
The cost of this thing is nowhere near originally predicted. This would be quite close to where lithium is today.

Since there is significant investment made in lithium, this would stay ahead of eestor.

Isn't it illegal for someone to buy shares on the basis of information the public does not have?

For public companies the answer is almsot always yes, but for a private company like EEStor the same rules don't apply.

Last edited Sat, 04 Jul 2009, 8:24pm by tvillars

whoever the other investors are, they could have easily sold their rights for more than their costs. I would have been glad to buy 100 shares of eestor and give them a little profit. So, their reasons are less than obvious. If the reason for not buying is knowledge the eesu does not work, then zmc will NOT be able to sell their offering to the investment community.

The holders of preferred shares always have a pre-emptive right as part of their shareholders' rights agreement to be the first to buy up offred common shares. So to me it is a certainty that KP (or Topfer trust of whoever) was offred BUT DECLINED those EEstor common shares that ZNN took up.

Maybe Paradigm and TW will have another look before laying out their clients with ZNN shares but brokers are well known to sell garbage stock even after the word is out. So I bet ZNN still raises some dough in this offering but probably a smaller amount at a lower share price.

So, Crossexam, when do we next hear from Paradigm and TW?

I left a message Wednesday (Canada Day) at TWs' Toronto office requesting, date, size, etc. No response yet.

Why would any investor refuse to sign NDA?

You're kidding, right? As a professional, you need to become familiar with the NDA/Non-compete game because these things have a way of rendering your ability to do consultant work null. It can also prevent you from becoming employable in your area of greatest expertise. Keep in mind, investors needs SME's and the SME's are the ones with the greatest professional risk from NDA's. It's a very precarious cliff edge to walk. Usually a company will not allow striking of any portion of their NDA/Non-com which has the effect of limiting the pool of SME's willing to lay their careers on the line. This can be a tool for shady dealers to exclude the deepest experience from exposure to their IP by scaring the smart ones off. It's not really a gamble to them because even if the smart ones DO sign, they still get to control the exposure.

http://www.sconsig.com/tipscons/nda_noncompete.htm

Last edited Sun, 05 Jul 2009, 1:52pm by EEventually

crossexam wrote:

The holders of preferred shares always have a pre-emptive right as part of their shareholders' rights agreement to be the first to buy up offred common shares. So to me it is a certainty that KP (or Topfer trust of whoever) was offred BUT DECLINED those EEstor common shares that ZNN took up.

Maybe Paradigm and TW will have another look before laying out their clients with ZNN shares but brokers are well known to sell garbage stock even after the word is out. So I bet ZNN still raises some dough in this offering but probably a smaller amount at a lower share price.

How do you know that KP has preferred stock? I have had the impression over last several yrs that KP held common. I have also had the impression that this was not KP's preference, but the preference of EEStor. I realize that the VCs typically demand preferred stock, but I also know that VCs have taken many a company away from the founders via the action of preferred stock. In the end, the two parties might agree on some structure that is significantly different from what we may consider to be typical.

Last edited Sun, 05 Jul 2009, 3:05pm by Goooose4

I don't know for sure- all I can say for sure is that with 25 years experience as a cross-border securities lawyer who acts for some VCs, I have never seen serious investors put money into a start-up, no matter what kind of security they bought, without having a shareholders agreement that gave them pre-emptive rights on future issuances of any kind.

larry wrote:

whoever the other investors are, they could have easily sold their rights for more than their costs. I would have been glad to buy 100 shares of eestor and give them a little profit. So, their reasons are less than obvious. If the reason for not buying is knowledge the eesu does not work, then zmc will NOT be able to sell their offering to the investment community.

Why would you think that rights to buy EEStor stock would be transferrable to others? Or transferrable without the consent of EEStor? Or that any stock already owned/held would be salable or transferrable to others without the consent of EEStor?

Options aren't transferrable, so far as I know. The option holder would have to exercise and purchase the private stocks (upon board approval), and then sell them to the new person (upon board approval). Basically, EEStor would have to want it to happen. This of course doesn't mean it hasn't. :)

Right, the investors may be able to sell their EEStor stock (unless it's non-transferable), but they surely don't have the right to sell their right to buy *more* stock!

What baffles me the most here is why everyone seems to assume that there are no private deals in place which we don't know about. Here's a possible scenario, a meeting between reps of three companies:

EEStor: We're offering some new common stock for sale.

ZMC: We want all the common stock we can buy!

KP: We want preferred stock, but if that's not being offered then we'll buy all the common stock we can get.

ZMC: Hey EEstor, why don't you make a private deal with KP to sell them some preferred stock? Then they won't buy any common stock, so we can get more.

EEStor: Okay, sounds good to us.

- - - - - - -

Of course this is pure speculation, and the rumor / inside info we've heard from a couple of forum members suggests that KP really did decline to increase their investment in EEStor, but the point is that we really don't have enuff info to say the investors have expressed a lack of confidence in EEStor. As I understand it, any private deal between EEStor and KP which did not directly involve ZMC would not have to be publicly disclosed by ZMC.