Zenn raises $8.2M as it takes bigger stake in EEStor

Toronto-based Zenn Motor (TSX:ZNN) said today it completed the sale of 2.65 million common shares to raise C$9.3 million (US$8.2 million).

The money, in part, is expected to fund the electric vehicle developer's milestone payment to stealthy ultracapacitor developer EEStor. Zenn said earlier this month it invested an additional US$5 million in EEStor, bringing its stake to 10.7 percent and total investment to $7.5 million. 

The rest of the funds are expected to go to fund operating expenses and additional product, customer and business development.

Zenn plans to incorporate ultracapacitors from EEStor into full-speed electric vehicles starting in 2010 (see Zenn CEO reveals details of EEStor's progress).

In May, Zenn said it received third-party verification that EEStor passed its final technology milestone, leaving EEStor with the challenge of bringing its state-of-the-art energy storage system to commercial production (see Zenn to increase stake in EEStor after test verifies ultracapacitor technology). At that time, Zenn held 3.8 percent of EEStor but had the option of boosting its investment to a range of 6.2 percent to 10.5 percent by investing an additional $2 million to $5 million, CEO Ian Clifford told the Cleantech Group.

The amount depended on how much other investors, including Kleiner Perkins Caufield & Byers, wanted to invest as a result of the milestone. In a news release, Zenn officials said that not all of EEStor's shareholders wanted to invest more money in the secretive company.

"The company's ability to maximize its investment in EEStor is a result of certain EEStor shareholders not exercising their follow-on investment rights. These investors had also elected not to participate at the time of [Zenn's] initial EEStor investment in April 2007," the release said.

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