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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
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