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.

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.

Well, not exactly if you go on to read the post. Unless, of course, having EEStor send information in the mail counts as “working relationship.” That said, the admission by Denise Gray, GM’s director of advanced batteries, that the auto giant has been in touch with EEStor is interesting enough.

Asked whether she’s seen an EESU prototype, Gray backed off a bit. “I probably shouldn’t say if I’ve received parts or not, that’s kind of confidential. But we are in touch with them and we are continuing to encourage them to develop the technology. Because we need as much help as we can possibly get to get the costs down of our battery solution and get the reliability up.”

Man, I can only imagine the kind of non-disclosure agreements these people have to sign. Obviously, EEStor is in discussions with a number of potential partners and customers, yet information about the company still dangles in the territory of rumour and speculation.

My personal prediction: a major announcement from EEStor in March.

A new Lockheed Martin patent published last week by the World Intellectual Property Organization gives us a glimpse of the miltary contractor’s relationship with Cedar Park, Tex.-based EEStor. It could also explain why EEStor has been reluctant so far to reveal its progress.

Lockheed’s patent details plans for “body armor having an electrical energy storage unit formed as a layer that substantially conforms to an armor plate.” According to the document, the electrical energy storage layer has “a plurality of sections.” The idea being that if one section is damaged in combat the other sections would remain operable. Two or more sections can be electrically coupled, either in parallel or series. Electrical connectors would “provide access to electrical power stored in the electrical energy storage layer.”

The armor would be a form-fitting utility garment worn like a vest. The patent goes on to say the electrical energy storage would be composed of lithium ion polymer batteries, or alternatively “one or more solid state, capacitive, electrical energy storage devices, such as those provided by EEStor Inc. of Cedar Park, Texas… Such solid state electrical energy storage devices comprise calcined composition-modified barium titanate coated with aluminum oxide and calcium magnesium aluminosilicate glass.

It’s been well known that Lockheed was participating in the U.S. Department of Defense’s “Wearable Power Competition,” which was announced July 2007. And it’s been long suspected that EEStor’s EESU was part of Lockheed’s entry. Indeed, Lockheed’s team leader in the competition – David Hoelscher — is named as co-inventor on the company’s patent. The patent filing confirms the speculation.

The contest winners were announced Oct. 4 and Lockheed didn’t make it to the Top 3. The winners used lithium-ion batteries, fuel cells or some combination of the two. I’m not sure where Lockheed did end up ranking, but the fact it didn’t rank high could raise a few eyebrows about its relationship with EEStor and confidence in the EESU technology.

But back to the patent. There is also mention of the electrical energy storage layer providing additional protection from bullets and ballistic fragments. And an external fuel-cell would be used to recharge the storage layer in the body armor.

What do we make of all this? An optimist would read Lockheed’s patent and see it as a huge boost of confidence in EEStor. That’s because Lockheed goes out of its way to mention EEStor, whereas mention of lithium-ion and nickel-metal hydride batteries remain generic. An optimist would also read the title of the patent — “Garment Including Electrical Energy Storage Unit” — as another endorsement of EEStor, given that its product has always been called an EESU or Electrical Energy Storage Unit.

A pessimist would focus on Lockheed’s wording in the patent, which could be interpreted as calling the EEStor technology a secondary choice after the preferred choice of lithium-ion batteries. A pessimist might also ask: So what? What if EEStor is mentioned in a patent application? Does it really say anything about EEStor’s technology, whether it works, or whether it can be mass produced?

Me? I think Lockheed could have just as easily not mentioned EEStor in the patent, so I take this as a good sign. But let’s keep in mind the patent was filed on April 8, 2008. This is before DoD awarded its wearable power prize, and it’s nine months of time during which anything could have happened — positive or negative.

So let me just end by calling this yet another interesting development that tells us precious little, makes EEStor seem more real, and keeps us hopefully engaged.

It shouldn’t come as a surprise to anyone. EEStor CEO Dick Weir said as much back in late October. Barring some last-minute help from Santa, ZENN and everyone else will have to wait until 2009. But Clifford is staying positive. “I firmly believe that 2009 will be the year that the automotive industry changes forever — and not just because of the current economic turmoil we are all familiar with, but led by the commercialization of disruptive zero-emission automotive solutions by ZMC.”

Clifford also says he’s encouraged by the latest U.S. patent issued to EEStor dated Dec. 16. It gives EEStor another layer of intellectual property protection, and after a quick scan of this patent it appears Mr. Weir and team have made some important refinements on the road to commercialization. He also goes into much greater detail describing the manufacturing process. According to the patent, “The 31,351 components (of the EESU) are configured into a multilayer array with the use of a solder-bump technique as the enabling technology so as to provide a parallel configuration of components that has the capability to store at least 52.22 kW-h of electrical energy. The total weight of an EESU with this amount of electrical energy storage is 281.56 pounds including the box, connectors, and associated hardware.”

I found the weight interesting, because last I remember — and I may be out-of-date with my facts — EEStor was talking about 52 kilowatt-hours with a weight of 400 pounds. It appears, then, that EEStor is claiming to have improved the energy density by at least 44 per cent. Someone, please correct me if I’m wrong here. In any event, the latest patent offers up some juicy details.

I should point out that the interest that has built up around EEStor, no doubt made more dramatic by the company’s secrecy and bold claims, has become the focus of a new documentary being produced by an L.A. filmmaker. The guy was in town last week interviewing folks at ZENN and yours truly. It will be interesting to see the final product, which could be completed sometime in 2009. I’m told that Dick Weir has so far declined an on-camera interview.

One of the questions this film maker asked me was: Where’s Carl Nelson in all of this? It’s a good question. The man, after all, is a co-founder of EEStor and his name appears along with Weir’s on all patents. I’m not entirely sure what his role is in the company, but he certainly has kept an extremely low profile. Does anyone have insight on Nelson’s role? If so, please share.

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.