-->G<-- and his compatriot PFujimoto.
First, the good news. Zenn's management has been fighting over how to best maximize their EEStor investment. We would all be in big trouble if Zenn's enterprise weren't serious enough to occasionally generate this kind of situation. My partial first clue that this was going on was the distinct lack of communication from Zenn to the public for the year leading up to this AGM: very strange indeed for a little company who seemed to be in every newspaper, magazine and television program in North America the year prior.
Now the bad news. Zenn's management has been fighting over how to best maximize their EEStor investment. Even though it's also good news, it represents a risk of uncertainty that no one following EEStor wants to see. What is the bone of contention? Most importantly, what caused new board member Roger Hammock to become involved is the burn rate at Zenn and not understanding what exactly the money is being spent upon there. Hammock & his business partner own over 1 million shares of Zenn and as he mentioned recently, he has visited EEStor. In plain English, investors like Hammock worry that Zenn is spending money too rapidly requiring a new round of financing which would dilute the value of shares owned by fellows like Hammock. It's typically easy to have conversations about such things but when one of the parties shows up with an army of attorneys threatening a proxy fight, there's more than a small disconnect in force.
As we know now, a press release from ZMC confirmed that Ian Clifford was reimbursed for fees very typically generated when a proxy fight ensues. That means Clifford lead the army of attorneys. Even though the situation didn't actually become a full blown proxy fight, negotiations to prevent it occurred. In these situations, leverage comes from the number of shares a group of dissident shareholders can garner. (please note I claim no financial expertise and am trying to supply a laymen's understanding of something best explained by more competent experts-seek one if you wish to gain knowledge). Accordingly, Ian Clifford lead the action to replace 3 board members with Roger Hammock, Allen Gregg & James Kofman. Since Brian Cott was one of the ones replaced, it doesn't take a genius to guess that Mr. Clifford and Mr. Cott had two different views about how to manage the Zenn fortune & how to conduct business. The key conversation started with a 3 martini lunch a few weeks ago at a quiet French Bistro near Zenn headquarters. "You're fired," one said to the other leading to this retort, "No, *you're* fired." Rejoinder: "I'm telling you now, that you are most certainly fired." Addendum: "Me? I'll do the firing around here and YOU ARE FIRED and FIRED." Setup:"Fire me?" Misstep:"Yes." Whammo:"You have to be employed to play that card..." This continued for several hours--halting briefly so it could be re-located to a nearby 24-hour diner that offers cheeseburgers served on donuts.
After a review of operations by the new board, there will likely be a new CEO brought in. It might be me even though I've never ran a company such as Zenn... since especially... paper bag hats are still viewed as modest threats to confidence. I've got other virtues.
Could Ian Clifford regain the CEO role? Possibly. When I asked Clifford about this, he responded by flexing and kissing his biceps. "These are my guns, B" he said as I sat stunned. He then went on to explain that he doesn't like to pull out his "guns" unless it's really necessary. He prefers to outskate his opponents and deliver acrobatic shots on goal. "When the puck is in the net, they always wonder what just happened. I like it that way," he said as he calmly flicked lint off his $2000 purple Dolce & Gabanna floral print. (I'm kidding, Clifford won't talk to me about this topic at this time).
Ahem. Let's now connect a few other dots. When Ian Clifford left the CEO position, it was pointed out that he would still manage the EEStor relationship. Odd, no? Since some of the new board members met with Dick Weir recently, is it fair to conclude that EEStor had some approval or input on the new team? I think so and expect that the actions of the newly constituted board of directors will answer this question in due time. After all, why would they meet with EEStor prior to all of this action going down? Simply learning about EEStor and it's viability is important for newcomers like Jim Kofman but since Zenn's value derives directly from EEStor, it makes sense that people like Kofman would ask a few questions about what EEStor expects from Zenn...something outlined by the famed Technology Agreement. Incidently, when they met with Weir he was doing one-armed push-ups and eating spinach straight from the can. For dessert, he chewed tobacco & made the spittoon go "DING" every few minutes which brings me to the reality phase of this blog post.
When Dick Weir got "locked up" with Zenn, the balance of power rested with the funding source aka Zenn. Now that EEStor is further down the road, this balance of power shifts to the Mr. EESU. Mr. EESU calls all the shots going forward. Mr. EESU has a mustache some days. Now many may have this convoluted idea that contracts and agreements between companies create all of the necessary rules of the game making relationships unimportant side benefits which may or not need tending. Let me point out that this is utterly and profoundly false. Mr. EESU agrees most assuredly. Disputes over business arrangements almost always originate at the individual level. (eg. Apple vs Adobe, Mr. EESU vs anyone else). When I look across a conference table at you, do I experience disgust or am I filled with joy to see you on my team? I've certainly got to add value but if you detest me, maybe someone else can do my job--someone with whom you can actually talk to and throw back a few beers. Mr. EESU agrees. A drunk said it best one time: "No one screws their friends." (ok, I said that)
So basically, lets get back to EEStor 101. EEStor has all of the power (stored). EEStor determines who they want to do business with & how it should be conducted. EEStor determines which laws of physics govern their novel energy storage device. EEStor--through subtle glances and occasionally hard to decipher body language-- determines the makeup of Zenn's board of directors, management, attorneys, friends, allegiances, causes, fleeting thoughts, cupboard contents, chaos arrangement, decibel level of minor door squeaks, long distance rates, facebook features, AFRL's email discussions, US energy policy, the catechism, what's considered humorous and/or offensive, & who what when & where times infinity. Therefore, if they like you, you're going to be a-ok. If they don't, you better join the Marines & start speed reading through a history of hard drives.