EEStor is citing funding problems to explain what is likely to be another delay of its allegedly disruptive energy storage technology. At least that’s what you can read over at the GM-Volt site, which has posted a dispatch from EEStor CEO Dick Weir about the likely timing now of commercial production of the company’s Electrical Energy Storage Units. “The funding that we did receive was not sufficient to meet the production status late in 2008,” Weir wrote.
I’m not surprised about the likelihood of production in 2009. In my own chats with Weir he has suggested as much. What I am surprised about is the difficulty getting funding. You’d think if EEStor has what it claims to have, and has such an impressive production line, and has certification that what it wants to do it can do, then investors would be falling over themselves to get in early on the action.
Now, one possible scenario is that the investment bar that Weir has raised is too high and that he’s unwilling to let his sweat equity be easily scooped away by sharks of the venture capital world. Clearly, he’s keeping his circle of friends small and tight.
Perhaps Kleiner has offered to invest more but not at acceptable terms to Weir. It’s plausible. But there’s also the fact that EEStor hasn’t released its permittivity tests, which as I understood it was the trigger for further funding from ZENN (but also giving Kleiner a first right of refusal before EEStor was free to solicit funds from elsewhere).
Given the lack of permittivity results (which, if they do exist and are positive, would presumably have to be disclosed by ZENN because of its obligations as a publicly traded company), there’s another explanation: that EEStor is having technical troubles and few want to touch the company until the bumps are ironed out. One thing for sure is that an agreement with Light Electric Vehicles Inc., whoever they are, doesn’t say much about who the company partners with.
And whither Lockheed Martin? It’s a great partner — on paper — but just how committed is Lockheed to a company claiming a delay in getting funding? For conspiricists out there, it could be that Lockheed is so committed that EEStor is intentionally delaying commercial milestones so that military applications can be nailed down behind the scenes. I’ve tried calling the folks at Lockheed for an update. It’s no surprise they don’t return calls.
I’m still prepared to give EEStor and Weir the benefit of the doubt. In a confidential EEStor investor presentation I obtained two years ago, Weir disclosed that he would need $10 million (U.S.) in funding to achieve full production with the ability to manufacture up to 25 52-kilowatt EESUs per hour. Who knows how much money EEStor has truly raised to date (at least $3 million is certain), but what is known is that initial targets for production shipments have not been met.
According to that presentation, EEStor was expecting to have revenues of $67 million in 2008 and have an operating profit of $30 million. Needless to say, nowhere close. Forget about achieving a revenue target of $122 million in 2009 (and profits of $60 million).
But that’s fine. Shit happens. EEStor wouldn’t be the first venture late with production and revenue targets, and many have gone on to become large and successful companies. Given what’s at stake, I’m prepared to quietly cheerlead in hopes that what Weir is trying to do can, some day, lead to a better world.
At the same time, Weir — as much as he has made clear in the past that he doesn’t care what other people think — has to start caring at some point if he hopes to get “other people’s” money. Assuming he truly needs it and that his talk of delay and funding issues is a smokescreen.