In April of 2008 in Cedar Park, TX, Richard Weir called a meeting together to brief key investors and stakeholders about the progress of EEStor to date, according to sources familiar with the event. The purpose of the meeting was not to talk about the Permittivity milestone, because "the science" of that milestone had been completed as early as September of 2007. What Weir wanted to talk about was the next milestone for EEStor Inc, which is the construction of a new facility with 6-7 production lines to join the one that is now either fully completed or nearing completion. A key difference between the current production line and the future ones is in the instrumentation attached to gather metrics as the EESU's are created. It should come as no surprise that the confidence in EEStor's ability to pass a 3rd party permittivity test (largely trumpeted by Zenn Motors in the context of their confidence at receiving production EESU's in 2008) has significantly to do with how Weir and team have set up their first production line. The idea is that they can already run the permittivity tests and know now and for quite some time that the permittivity tests are old news. So, what's behind the delay in announcing this milestone publicly?
Two things: (1) Before Weir lays the Permittivity tests on the table which would to some degree subject them to a degree of uncontrollable public attention and more importantly, possible insights for competitors, he wanted to protect his intellectual property by filing an additional 21 patents. Its this work on patents that has largely been behind the delay in announcing permittivity. While Zenn Motors is bound by non-disclosure agreements with EEStor, it is also bound by being a public company with a perceived obligation to disclose any material facts about the company such as whether or not there are any issues with passing permittivity. And according to sources familiar with EEStor's status, Zenn is not announcing that because presumably they know well that things are going well. With their additional investment, Zenn Motor will own 6.4% of EEStor although it's been reported elsewhere that that figure could go over 10%...which is not likely to happen since Kleiner Perkins and other investors can excercise options for further funding. It would be highly unusual (although not impossible) for EEStor Inc, to announce permittivity AND not receive a sizeable influx of additional capital capping Zenn's investment at no more than 6.4%.
In addition, sources have said that Kleiner Perkins would likely exercise all of their options for the next round of funding. There were rumors that Kleiner even pressured Weir to reduce or take Zenn out of the picture but Weir rebuffed those efforts to stay loyal to his early backers at Zenn. For their part, Kleiner Perkins clarified what they told me earlier regarding EEStor not being on their website. Originally, what Bill Joy's secretary said was "if a company is not listed on Kleiner's website, then it is not an investment of Kleiner's." This week, she clarified by saying, "if an investment is not listed on the website, it is policy not to comment on it. " Attempts to reach Bill Joy, who presumably manages the EEStor investment failed. Apparently he travels constantly and has no near term public speaking engagements.
And what about that second reason behind the delay in announcement of Permittivity? Marketing. Although it does not appear to me to be a carefully crafted set of plans, it does seem fair to say that a key reason for the EEStor's secrecy has been to whip up additional attention. An idea summed up well by paraphrasing the Toa of Steve, "we're attracted to that which repels us." While it's true, EEStor has an interest in protecting it's intellectual property properly and with great care and thus are not foolish enough to share key aspects of their breakthroughs too soon, I have learned from a source within EEStor that the secrecy serves a dual purpose. I even know who claims to be the architect of that strategy but I agreed not to say so in this article.
There may be at least 5 entities ready to take part in a second round of funding. Kleiner, Zenn, an investment arm within Lockheed Martin, Mort Topfer and a mystery billionaire in Austin, TX. One source was bound not to mention the name of the theoretical investor. A second source flat out said, "the rumor is Michael Dell may be ready to invest at the advise of Mort Topfer." It's important to note that that piece of information is an unsubstantiated rumor. Messages left for Mort Topfer have so far been unanswered.
In addition to the briefing in April, Weir provided an updated tour of the facility he has now. On one end of the facility, there are raw chemicals. At the other end is a printing facility. They print the capacitors 24inches round and then cut them to spec as at an Integrated Circuit Fabrication Plant. What Weir is building is a blueprint of a fully integrated, fully automated production line. This is a "no touch" production line from start to finish. The idea for expansion is to custom modify the production line for the application in question and license the results. The production line is mobile in the sense that it could be assembled at the site of the licensee. For example, at a Toyota Prius or GM Volt assembly line. One source said that the rumor is Weir removes one thing from the plant floor prior to a tour: the printer heads.
A source familiar with the April gathering said it was very probable that EEStor would not simply announce permittivity results but would also announce the new patents, turn on the website and start talking to financial analysts and investment banks on a much wider scale. (A source within EEStor confirms their website design is almost complete) It would seem logical that as we near delivery of production EESU units for Zenn, EEStor would have a plan to maximize visibility to gain capital to expand rapidly. Once their business goes into the public arena, one thing that would set them apart from competitors is an enormous infusion of capital. For now, the Zenn-EEStor-Kleiner stance with regard to publicity is a case study in conflict. Zenn needs publicity to sell cars. EEStor needs publicity to drum up additional funding but publicity too soon would enable or simply embolden competitors. For Kleiner, publicity of EEStor means additional competition from other investment sources. Thus, as you probe around for information, you get alot of different interpretations about what can be revealed and talked about and what can't. All of this creates problems for traditional journalists attempting to cover the story given their obligation to substantiate facts, another factor in the mystery surrounding EEStor.
On a related note, I spoke to a person who has attended various meetings with EEStor involving various investment entities. A sort of pattern seems to have emerged: NDAs are signed, a large financial firm flies their Subject Matter Expert to Cedar Park and a group of people gather in a conference room. The SME starts firing off questions designed to trip up Weir, catch him on some aspect of the science that he should be aware of. These meetings often end up being the SME and Weir going back and forth with everyone else having a dumb look on their face. Then the SME invariably starts to get a smile that he/she can't get rid of and it often stays with them out into the parking lot and all the way to the airport. And on a related note, I've learned that all of the provisions related to succession are now in place, eg, what if Weir gets hit by a bus, etc. The IP is protected then on multiple fronts.
Finally, I'll end with a new application concept: vacuum cleaners. A source within EEStor shared with me a possible application of an EESU to illustrate a point. "Take a vacuum cleaner. Today, you have to drag around a cable and keep plugging/unplugging the unit as you move around the house. With our technology, that would be unnecessary as you would simply charge the unit and be able to vacuum pretty much as much as you wanted with no worries about running out of juice. That's the kind of technology that would cause housewives to send us Christmas Cards each year. "
