TheEEStory.com

The only publicly mentioned investment in eestor by KP is for $3M. Considering that in the same timeframe, Zenn paid $2.5M for 3.8% of EESTOR it is not logical that KP got 20+% for $3M. If the initial investment by KP included an option for additional investment upon some unknown milestone, then KP quite likely has already taken their second investment option, raising their ownership to 20+% from the initial likely 4+%. This would have cost them another $12+M. For those wondering why KP didn't invest a second time, this could be the answer, and since the agreement between them is not public(Zenn's is), we would not know what the milestone was or when it happened.

DW said KP investment was used to put in the production line. Surely, no one thinks $3M was all that EESTOR needed for this; just the payroll since the first KP investment had to exceed $3M.

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EEStor and ZENN do seem to have been extraordinarily(?) frugal.

Even so, I have wondered about the money.
The sums we know about just seem too small.

How many millions / where did it all come from.
And what did EEStor give up, for the dough?
Dell get the exclusive rights for laptops?
Maybe for, say, 3 or 5 years or something???

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larry wrote:

DW said KP investment was used to put in the production line. Surely, no one thinks $3M was all that EESTOR needed for this; just the payroll since the first KP investment had to exceed $3M.

Hmmm. *If* the full-sized EEStor factory exists outside Dick Weir's imagination, then indeed a major additional investment by KP would explain where the money came from, and why Dick claimed EEStor had a money shortage in 2008 despite a major investment by KP.

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I think the KP money came before the IC money. The first investor generally gets a better deal than those that come after.

Thanks for the reminder, Lens.

EEStor sold 2 and 3 wheel rights to LightEV, partly because they needed money.

Would that suggest KP was already "in", as far as they were willing, or allowed under somebody's rules, to go?

Thus a potential explanation why KP didn't buy in more, for what we know as EEStor's second round of equity investment that ended up with ZENN getting all available shares, boosting their ownership of EEStor to 10.7%?

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I think it's been pretty well established why KP couldn't buy more equity, hasn't it? They were already at 20% or more. So even if they wanted to, EEStor wouldn't have allowed it.

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I think the KP money came before the IC money. The first investor generally gets a better deal than those that come after.

IC says different.
http://www.zenncars.com/media/documents/globean...

Ian Clifford, savior of the auto industry wrote:

We have a unique relationship with them because I got it at the angel-investor level. If I'd met them after Kleiner, we wouldn't be having this conversation.

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by the way, KP is out.

Meaning, they have run OUT of additional options for investment in EEStor.

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larry wrote:

The only publicly mentioned investment in eestor by KP is for $3M. Considering that in the same timeframe, Zenn paid $2.5M for 3.8% of EESTOR it is not logical that KP got 20+% for $3M. If the initial investment by KP included an option for additional investment upon some unknown milestone, then KP quite likely has already taken their second investment option, raising their ownership to 20+% from the initial likely 4+%. This would have cost them another $12+M. For those wondering why KP didn't invest a second time, this could be the answer, and since the agreement between them is not public(Zenn's is), we would not know what the milestone was or when it happened.

DW said KP investment was used to put in the production line. Surely, no one thinks $3M was all that EESTOR needed for this; just the payroll since the first KP investment had to exceed $3M.

What if the +20% refers only to preferred shares? Did Dick say anything else that would refute this?

Also, can anyone else remember if the EEStor SEC document listed all parties owning over 10% of all shares, or all parties owning over 10% of a class of shares? I can't recall with confidence.

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chitown wrote:

I think DW made it clear that KP owns preferred shares, they are a VC firm and don't meddle in common stock. Zenn owns common (and preferred I assume?). DW isnt selling more preferred.... and from the interview, it seemed like there might have been some tension between eestor and KP, when DW says "they stay friends"...to me that sounds like KP might have wanted more authority, whether over management or other decision making... again Im prob reading too much into this but here is the transcript... "Ummm, they ... We really stopped being a VC company probably about 2 ... 2 1/2 years ago. When we took the first investment with ZENN Capital there that was common stock. And VCs just don't work in common stock. They're invested ... they have to guarantee preferential treatment. Since that went through we've got money through other sources right now. And more money is coming from those sources, non-diluting sources, so they admit it. That we're just not a VC company anymore. But we stay friends. Hey, they own stock in us and they'll get the great rewards because of it."

Examples were provided recently where KP DID invest in common stock. Maybe they do it only rarely, but I think it has been proven incorrect that they don't do it at all.

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Morton Topfer saying that EEStor is an early stage company has to be seen as speaking the party line, whatever that is. Early stage is open to definition, so he needn't have been lying. I think we could all agree that he said whatever was the right thing to say, given his loyalties.

"early stage" is a very relative phrase for someone with MT's credentials. This is a guy who has had a big hand in creating entire industries.

Compare "early stage" AMD or Motorola to where they are now and maybe the notion of EEStor as "early stage" seems more accurate.

MT and KP's definition of "early stage" might be very very different.

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Dan, it is 10% or more of a class of equity securities.

What if KP bought exclusive rights instead of stock.
Read V-Car factory proposed in La.
We may have a new EESTOR powered SUV in the works.

it'll have to come in >1400kg

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Bill300 wrote:

Dan, it is 10% or more of a class of equity securities.

Thanks Bill. So do we know, based on the SEC filing and Dick's comment in the recording, whether KP has +20% of EEStor, or just +20% of the preferred shares? That's what I was getting at. The issue isn't clear to me.

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Dan,

I think the answer to your question may never be known, but the key is to see how other VC's operate. They usually go in for a clean deal and in many cases their preference shares are convertible and contain other rights at some future time. In this instance DW may have allowed KP the option to exit altogether or to convert prefs into ordinary based on a certain favourable formula or even to convey rights to subscribe for further equity at some future point. In the case of the last possibility, there would have been disclosure to IC of those terms and it seems unlikely because DW wishes to retain control.

But the essence is that we can go on speculating until the cows come home and never be close to understanding just what is involved. Exclusivity for power tools or grid storage? Who knows.

In the case of ZMC, they got exclusive rights. We can only wonder what "extras" KP got.

One thing is certain, they would NEVER have left any crumbs on the table for ZMC if KP were in there first :-)

Also, let's have no sympathy for IC over his parsimonious salary and equity - I am sure we will find an incentive structure in his remuneration package for extra shares/options.

Dan,

No we do not. There was never another SEC filing from EESTOR, contrary to West Coast's post.

Another Gives up on EEStor/Zenn

Jim Kingsdale changes mind on EEStor due to KP.

http://seekingalpha.com/article/155571-time-to-...

Time to Forget About Zenn Motor

On July 26th I wrote a piece about oil and energy which also focused on the speculative battery technology company EEstor and it’s minority owner Zenn Motor Company (ZNNMF). Since then I’ve given more thought and some added research to the matter. On July 29th, I posted a correction to my original pieces as follows:

re: the Zenn investment, it seems the information in my piece was incorrect. According to a 7/2/09 press release you can find at: http://www.emediaworld.com/press_release/releas...
the Zenn investment was $5M [not $700,00]. The other noteworthy fact from this press release is that Zenn was able to invest the maximum amount permitted under a prior agreement because other investors (presumably Kleiner Perkins) elected not to invest the amount to which they were entitled.

It is potentially quite troubling that Kleiner Perkins is no longer supporting EEstor. It is also a bit troubling that Mort Topfer, a former Dell top exec, has left the EEstor board for the second time as of June, 2009.

In sum, I must say that the skeptics on EEstor also have a lot of ammunition.

It’s possible that Weir is hookwinking Zenn into bankrolling them now. But the question is why would Weir want to do that if he did not feel he was going to be successful fairly soon. Expectations have been raised for rapid product visibility. Weir must think he can produce.

As I think about the matter further, it seems increasingly likely to me that the EEstor/Kleiner-Perkins relationship probably came apart some time ago and that K-P no longer supports EEstor. There could be personality reasons behind such a split but I doubt it could be unrelated to a cold business judgement on the part of K-P. That is not a good signal for EEstor bulls.

In retrospect, my judgement now is that the degree of risk in Zenn’s stock is just as high as it has ever been. Therefore I have reduced my Zenn holdings. I still have some shares, but I think they are a pure roll of the dice with probably no more than a 10% chance of success. Fortunately, the price of Zenn has been fairly strong since July 26th, so any follower of this site who wants to become more conservative in regard to Zenn, as I have, is likely to be able to sell at a profit.

In sum, there are many more interesting and important investment decisions that require attention than this one speculation, despite the huge potential that a success would have. I would not allocate a lot more brain cells to Zenn. Either it happens and I will wish I had owned a lot more shares or, more likely, Zenn will fade into the the sunset at some point, another Grand Plan that was not practical.

There is already a thread dedicated to this:
http://theeestory.com/topics/2865

KP's investment only discredits eestor, IMO

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Morton Topfer just resigned from AMD's board too.
seem's he may want to retire off into the sunset.

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