TheEEStory.com

Lensman wrote:

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.

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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.

Would that not give KP more (dangerous levels of) control. I'd be loath to take VC funding with some of the risks outlined in the VC article B just pointed to in another article.

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crossexam wrote:

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.

crossexam,

Do you think that an unprecedented situation could have called for an unprecedented approach from a VC firm?

To my mind, investments (and VC firms) are not about business approaches per se, they are ultimately about making money. If I found myself in the position to cover a huge upside with relatively little money on the table and had a reasonable (insider's) confidence in the outcome in spite of my lack of control, I think I would go for it.

The risk (lack of control, assessment of probable success based on insider's access to info) would be balanced against reward (stratospheric upside, relatively small investment), and a decision would be made from that.

I don't believe anything is written in stone where profits are concerned. Follow the money.

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Goooose4 wrote:

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?

Goooose4, good point. IIRC, there is also language in the EESTor/Zenn Stock Purchase Agreement that indicates that this is indeed the case - that any holder wanting to sell shares would have to obtain agreement from other holders.

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The risk (lack of control, assessment of probable success based on insider's access to info) would be balanced against reward (stratospheric upside, relatively small investment), and a decision would be made from that.

Remember that the stratospheric upside is only available upon either sale of the shares or distribution of profit in the form of some kind of dividend. For VC's, they typically get their upside as a startup goes IPO. The inventors sell out, more experienced businessmen come in, and the VC's cash out after the company goes public and the stock valuation steps forward speculatively to an amount in multiple of the original VC investment.

VC management is a significant overhead when you consider how much money VC directors make doing their core abilities. I think a company that has a business model that may not require public ownership would give lower value to a VC director's time.

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dfwrunner wrote:

Would that not give KP more (dangerous levels of) control. I'd be loath to take VC funding with some of the risks outlined in the VC article B just pointed to in another article.

Dangerous to your Starfleet, Commander, not to this battle station!

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Seriously, your comment is based on an assumption that EEStor or DW is trying to prevent KP from getting too much equity in EEStor. While this is a popular theory on this forum, so far as I know it's *pure* speculation, with no supporting evidence from anything Weir or anyone else at EEStor has ever said.

I've quoted that "EEStor doesn't want investors to get too much equity" hypothesis myself. That doesn't mean it's true. On the other hand, I don't really believe that a private stock deal between EEStor and KP is the most likely scenario. I'm just pointing out there are more possibilities than what people are considering.

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EEventually wrote:

The risk (lack of control, assessment of probable success based on insider's access to info) would be balanced against reward (stratospheric upside, relatively small investment), and a decision would be made from that.

Remember that the stratospheric upside is only available upon either sale of the shares or distribution of profit in the form of some kind of dividend. For VC's, they typically get their upside as a startup goes IPO. The inventors sell out, more experienced businessmen come in, and the VC's cash out after the company goes public and the stock valuation steps forward speculatively to an amount in multiple of the original VC investment.

VC management is a significant overhead when you consider how much money VC directors make doing their core abilities. I think a company that has a business model that may not require public ownership would give lower value to a VC director's time.

Yeah, but it might be an estimated (to Kleiner) 100x, 1,000x or 10,000x or more upside on 0.3% of their KPCB-XIII fund. They're not gonna care if it takes 5 years and an IPO, or 15 years worth of net profit sharing to get it. 0.3% is a pittance compared to the possible profit margin. They wouldn't care about the time scale or the method of payback (within reason - I'm not suggesting 50 years here).

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energy investor wrote:

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 :-)

Nice read and I don't how this aspect slipped by me.

Zenn has always said it's agreement incudes receiving the FIRST eesu's. This is not disputed.

That gives Zenn the seat at the head of table and pushes others just slighty off to the side. That alone could count for others maintaining current positions while being cause for those (Zenn) with the most to gain short term to be the ones to jump in with both feet.

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Lol am i back in Chat?

Production line is said to exist already. Money could go to a multitude of things, like marketing, which they have spent zero to date.

Development of other tech discovered during the way, more R&D to decrease future manufacturing costs, even just finishing touches on the line are possible areas of spend.

Of course I'm assuming "if" the production line actually exists...

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Thomas W. Weisel - check this one out -Member of Board of Directors of Empower America (www.sourcewatch.org/index.php?title=Empower_Ame...)-Mission statement
According to its web site, Empower America was "devoted to ensuring that government actions foster growth, economic well-being, freedom and individual responsibility. The ideas that have fueled America's stunning economic expansion - opportunity, competition, ownership and freedom
Empower Transformed into http://www.freedomworks.org/

Peter Dey is currently the Chairman of Paradigm Capital Inc. Mr. Dey was most recently a Partner of Osler, Hoskin & Harcourt LLP specializing in corporate board issues and mergers and acquisitions. Prior to this role, he was Chairman of Morgan Stanley Canada Limited and involved in developing the Canadian investment banking business and the overall strategic direction of Morgan Stanley in Canada.

These guys know what is going on! Both of them having their roots in the same bucket.
When oil is history they want the front row in the new energy!
So if you want to "hit the wave"....