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ELECTRO ENERGY INC. ANNOUNCES MERGER WITH
MCG DIVERSIFIED INC.
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Merger Coincides with Private Placement of Approximately $3.0 Million
DANBURY,
Conn., June 9, 2004 – Electro Energy Inc. today
announced the closing of a private placement totaling approximately
$3.0 million
and the simultaneous stock-for-stock merger with MCG Diversified
Inc. (MCGV.OB). The combined company will operate under the name
Electro Energy
Inc. and will assume and execute Electro Energy’s business
plan as its sole business. Electro Energy will retain its senior
management
team and three of its current directors. Shares will be listed
on the Over-the-Counter (OTC) Bulletin Board initially under the
trading
symbol
EEEI.OB. The company plans to apply for listing its shares on the
American Stock Exchange as soon as practicable. Following the closing
of the
private placement and merger, Electro Energy has 13,400,000 outstanding
shares
of common stock, inclusive of shares of its series A preferred
stock that are convertible into 1,200,000 shares of common stock.
Electro Energy Inc., with its patented technology,
develops and manufactures high-power, rechargeable bipolar
nickel-metal hydride
(BP Ni-MH)
and nickel-cadmium (NiCd) batteries and is developing lithium
batteries for use in a wide range of applications. Electro
Energy’s
customer base includes government agencies and defense contractors,
as well
as aerospace and automotive companies.
Today’s private
placement and merger transaction will enable Electro Energy
to pursue the commercialization of its technology
by investing
in manufacturing capabilities and expanding sales and marketing
activities.
Martin G. Klein, founder, Chairman and Chief
Executive Officer, stated, “The
completion of this transaction provides Electro Energy with
a public company platform that enables future business transactions,
provides
additional funding for the commercialization of our unique
battery technology and is a significant step in the company’s
steady progress toward revolutionizing certain segments of
the global battery market.” Prior
to founding Electro Energy, Mr. Klein was one of the founding
principals of Energy Research Corp., now known as Fuel Cell
Energy (NasdaqNM:
FCEL).
Electro Energy’s Technology
Electro Energy’s bipolar nickel-metal hydride battery
design, for which seven U.S. patents and four foreign patents
have been issued and
for which three additional patent applications are in process,
represents a significant departure from conventional battery
configurations. Electro
Energy’s technology employs nickel-metal hydride
chemistry, but utilizes a cell design and electrode fabrication
technology that is significantly
simpler and less costly than conventional cylindrical and
prismatic battery technologies. Electro Energy’s
battery construction, which in the finished product significantly
increases performance, consists
of flat
wafer cells that are stacked one on top of another to make
a multi-cell battery.
Each cell consists of one positive
electrode, separator
layers and one negative electrode contained in face sheets
that
also serve as
the cell
contacts. Multi-cell batteries are constructed by stacking
identical cells so that the positive contact of one cell
contacts the negative
contact of the adjacent cell. The design of Electro Energy’s
products offers a number of significant advantages, including
providing an ability
to discharge efficiently at exceptionally high rates, compact
packaging, and lower manufacturing costs, which are important
in critical applications
such as military communications, military aircraft and
space and medical applications, as well as power-consuming
applications such
as hybrid
electric cars, electric bicycles and scooters, cordless
power tools, load regulation and stationary energy storage.
Electro Energy has developed active relationships
with U.S. government agencies such as the U.S. Army, the Naval
Air
Systems Command,
the U.S. Air Force, the Ballistic Missile Defense Organization,
the National
Aeronautics
and Space Administration, the National Institutes of Health,
the U.S. Department of Energy, and the Partnership for
a New Generation
Vehicle.
These agencies are not only potential purchasers of Electro
Energy’s
batteries but are also sources of significant amounts of
research and development funding.
About Electro Energy:
Electro Energy, headquartered in Danbury, Connecticut,
was founded in March 1992 to focus on the development
and ultimate
commercialization
of a concept for a bipolar nickel-metal hydride (BP Ni-MH)
rechargeable battery. Since its founding, Electro Energy
has developed and
owns both
the patented design of BP Ni-MH batteries and the patented
production process for their manufacture. Electro Energy
has produced and
delivered prototype BP Ni-MH batteries for the U.S. Army
(field radios and silent
watch applications), NASA (satellites), Partnership for
a New Generation Vehicle (hybrid vehicles), NAVAIR and
U.S.
Air Force
(F-18 and
F-16 Aircraft), National Institute of Health (NIH) (heart
assist pumps), and the Department
of Energy (DOE) (distributed energy and power quality),
that have demonstrated performance advantages over existing
technologies.
Electro Energy’s Colorado Springs facility, Electro
Energy Mobile Products Inc., acquired in 2003 from privately
held Eagle Picher Technologies,
supplies Super NiCd’s for U.S. Government satellite
systems, legacy military aircraft such as the B-52, B-1
and Cobra Helicopters,
and manufactures
BP Ni-MH and industrial Ni-Cd products.
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Certain statements in this news release may
contain forward-looking information within the meaning of
Rule 175
under the
Securities Act of 1933 and Rule
3b-6 under the Securities Exchange Act of 1934, and are
subject to the safe harbor created by those rules. All
statements,
other than
statements
of fact, included in this release, including, without
limitation, statements regarding potential future plans
and objectives
of the companies, are
forward-looking statements that involve risks and uncertainties.
There can be no assurance that such statements will prove
to be accurate and actual results and future events could
differ
materially
from
those
anticipated
in such statements. Technical complications that may
arise could prevent the prompt implementation of any
strategically
significant
plan(s)
outlined above. The companies caution that these forward-looking
statements are
further qualified by other factors including, but not
limited to, those set forth in Electro Energy’s
Form 8-K and MCG Diversified, Inc.’s Form
10-QSB for the period ended March 31, 2004, filed with
the
U.S. Securities and Exchange Commission (available
at www.sec.gov).
Electro Energy undertakes no obligation to publicly
update or
revise any forward-looking statements, whether as a
result of new information
, future events,
or otherwise.
Pursuant to a June 1, 2004 agreement, Consulting
For Strategic Growth I, Ltd. (“CFSG”) provides
Electro Energy with consulting, business advisory, investor
relations, public relations and corporate
development services, for which CFSG receives a fixed
monthly fee for the duration of the agreement. Independent
of CFSG’s receipt
of cash compensation from Electro Energy, CFSG may choose
to purchase the
common stock of Electro Energy and thereafter sell those
shares at any time it deems appropriate to do so. |
