All of this is no surprise. ZENN is trying the best it can to conserve cash until EEStor delivers on what it has promised. There are no shocking departures here. All restructuring is orderly, and that is a good sign. And while we’re all impatient to see whether EEStor can deliver, I guess the good news is that the ZENN/EEStor relationship remains strong and the two companies are planning to work more closely together. Being a media guy, however, I’m still uber curious about the role that Allan Greg is playing here on EEStor’s board.

Wallace, like any seasoned exec, wouldn’t just join any board. Obviously he’s done his research and felt comfortable associating with ZENN. For this reason, I view this appointment as quite positive. After all, if EEStor wasn’t going to deliver would Wallace waste him time?

Still waiting, however…

A link to the patent, which was just approved a few days ago by the U.S. patent office, can be found here at the TheEEStory.com. EEStor and ZENN appear to be in complete lock down — no information is flowing from either. I’ve being hearing chatter in the investment community that EEStor has run into some technical (not financial) trouble, but then again, I’ve been hearing this kind of chatter for the past few years since I wrote my first feature on the company in the Toronto Star. I tried to arrange a visit to EEStor’s headquarters in Cedar Park, Texas, for some time this summer. I wanted to gather some information for a book I’m working on that will be released next fall, but Weir — despite my offer to sign a non-disclosure — wouldn’t allow it. He wished me luck and said he doesn’t want or need the attention. (The book, by the way, isn’t just about EEStor, but EEStor will represent a chapter in it. The book will be about barriers to energy innovation… stay tuned).

Fair enough.

The explanation in the patent of how an EESU could benefit the grid is pretty straight forward, so this is really no surprise. But it’s nice to see the company beginning to accumulate a sizable stockpile of patents to protect its IP. Despite the silence out of Cedar Park (and Toronto), I do find it interesting that there are some other ventures hot on EEStor’s heels, just as Weir was expecting. On April 29, for example, the U.S. Department of Energy announced funding as part of its ARPA-E program. One recipient of funding was venture spun out of Penn State University called Recapping Inc., which received $1 million.

“Recapping Inc. and researchers at Pennsylvania State University will seek to develop a novel energy storage device based on a 3D nanocomposite structure with functional oxides that provide a very high effective capacitance. The basic fabrication of the dielectric materials and devices will utilize traditional multilayer ceramic fabrication methods that will provide a cost-effective alternative to battery solutions, with the added benefits of exploiting mechanisms that could maintain higher cycling and possibly deliver charge with high power density. This technology hopes to create a cyclable and economically competitive energy storage device that will catalyze new, related cleantech industries and contribute to the reduction of greenhouse gases and oil imports,” according to the DOE’s description of what Recapping is doing. Notably, who’s the only executive of Recapping Inc.? That would be Alex Kinnier of Khosla Ventures. I tried to contact Kinnier, who wouldn’t talk but said to come back in 12 months.

The drama thickens… (Can you hear the melodramatic music in the background?)

May the 4th be with you.

The last remaining contractual milestone between ZMC and EEStor is the third party verification of delivery of a full production quality EESU that meets certain specifications outlined in the Technology Agreement between the companies. Achievement of this milestone will be announced by ZENN Motor Company via news release to all stakeholders.

Any interim sharing of information or technology between ZMC and EEStor is confidential in nature and will not be publicly disclosed. Any announcements related to EEStor’s technology that fall outside of the contractual milestone described above are strictly within EEStor’s purview to release to the public. ZMC will only comment on EEStor’s progress once the information is made available in the public domain by EEStor.

ZMC remains focused on the development of its ZENNergy drivetrain solutions in anticipation of the successful commercialization of EEStor’s technology. ZMC continues to work with EEStor on a regular basis.

So, that’s where things stand… As Chaucer wrote more than 600 years ago, “Patience is a high virtue.” Or not. I doubt you’ll hear ZENN making any more predictions of when it will receive its first EESU. Still, given the expectations it has built up over the last two years and given that ZENN’s future rests almost entirely on the success of EEStor, the company should probably be more communicative with shareholders. At the same, shareholders need to realize that with those updates ZENN isn’t making hard promises, but merely shedding light on a schedule that — as we’ve certainly learned — is difficult to nail down.

UPDATE: StephenB makes a good point in COMMENTS by parsing ZENN’s statement. It may have received an EESU, but hasn’t announced anything yet until “third party verification of delivery of a full production quality EESU that meets certain specifications.” So, technically, ZENN may — or may not — be on track. We just don’t know.

Like many secretive Kleiner Perkins investments — EEStor, for example — let’s hope the hype and promise leads to something truly disruptive. Speaking of EEStor, tick, tick, tick… the end of the year fast approaches.

The president of Paradigm confirmed what happened but said it’s not known how the recording made it onto the Internet. ZENN, meanwhile, is arguing that the information within the interview is not material or was disclosed previously, so while the leak is embarrassing it’s not breaking any rules. Of course, I’m sure many of you out there who have heard the recording or read the script would beg to differ. It will be interesting to see how this controversy unfolds, and whether financial regulators in Canada decide to look into it further.

(NOTE: The video on Yahoo has been disabled, not surprisingly. But someone over at TheEEStory.com has kindly supplied a transcript.)

Mr. Weir probably had no clue the person interviewing him would post this on the Internet, but it appeared just a few hours ago. Weir talks about the history of EEStor, how he hooked up with Ian Clifford at ZENN Motors, the relationship with Lockheed, and the status of EEStor’s ultracapacitor development. Weir says there’s really nothing standing in the way now from commercial production, and that pre-production of EESU units will begin in the fourth quarter. This is a lengthy, very detailed phone interview, and I don’t believe Weir would be talking this way if he wasn’t confident in the road ahead. It sounds like, from the interview, that somebody is trying to profile EEStor and Weir — perhaps, maybe, for a documentary that’s being made?

(NOTE: I’ve spoken with Dick Weir several times by telephone. This is his voice in the interview, 100 per cent, for those who wonder if it’s some kind of impersonation hoax.)

A few nuggets:

* Says Kleiner Perkin’s owns “20-something per cent” of the company.

* Weir says he and his co-founders still own controlling interest in the company.

* On Lockheed: “I’m really in deep with Lockheed Martin.” He said Lockheed has no investment, but relationship goes way back.

* On EEStor’s value: “If we make an EESU… God only knows what we’ll be valued then.”

* He has two patents on grid-load levelling. “You can put 45 per cent more electricity on the grid and do nothing more than put our batteries on there…. that electricity could supply the electricity to the electric vehicle market as it emerges… we make wind and solar real… you can make a wind farm operate like a coal-fired plant and it’s really cost-effective.”

* On storage for PCs and handhelds. “We can take a battery for a cellphone and give you three to five times more energy storage that would never degrade on you and you can charge in seconds.”

* Electric vehicles: “It’s going to take time to emerge, but I think with ZENN Motors it’s going to be very interesting to see them grow dramatically to capture that market.”

* On portable tools: “I’m already in knee-deep with the people in the portable tool business. They’re waiting for me to emerge and they’ll come on strong.”

* On relationship with ZENN and the EESU: “They buy it for a certain amount and they put it in their car. Right now our contract says $100 per kilowatt-hour, excluding electronics, and it’s extremely attractive. You take a lithium-ion battery right now it’s $350 to $1,200 dollars… nobody is going to compete with us, certainly no lithium-ion.”

* How quick to market for EESU electric car? “Need is always a wonderful thing, and the need is very high for our technology…. there’s nothing corrosive, harmful or explosive in our technology… there’s nothing, there’s no chemistry part of our product. It’s all solid state… I think also ZENN is going to happen very, very quickly… people will want that electric car. They’ll be able to test it, don’t get me wrong, but they’ll be able to pass those tests quickly because we’ve got the UL.”

* On EESU status: “I’m already out there putting EESUs together and I’m still in June. I’m ahead of schedule.” Says ZENN will get pre-production prototypes by the end of this year. “Once I do that, all hell is going to break loose for ZENN as well as EEStor.”

* Ending note: “We’ve done our homework, and you’ll see the results when we get into 2010… you’ll see a very effective and constant ramp-up to our production capabilities.”

I can guarantee one thing: this audio/video will spread like wildfire across the Internet over the next few days.

This isn’t to say EEStor’s relationship with Lockheed is no big deal. The fact that Lockheed would lend its brand to a press release that includes EEStor, and has even named EEStor in a patent, is significant. Also, because we’re dealing with military applications, who knows what kind of collaboration is going on behind the scenes? However, contrary to what’s floating around out there, Lockheed is not an investor. (ed. note: for clarification my source says Lockheed has “not given EEStor a dime,” which would indicate there is no investor or fee paid).

If you want a full story on EEStor’s latest “permittivity” milestone (updated version) and its impact on ZENN shares, check out my Toronto Star article here.