Axion Power International, Inc. (OTC: AXPW - News) announced that it has closed the third and final tranche of its previously announced $18 million financing agreement with The Quercus Trust of Newport Beach, California. Yesterday's final closing was a $10 million equity investment and, along with two previous investments of $4 million each announced in January and April, completed the agreement between Axion and Quercus first announced in January. Merriman Curhan Ford and Co. acted as sole placement agent for the transaction.In yesterday's final closing, Quercus bought 4,761,905 additional units for $10 million. Each closing unit will consist of one share of Common Stock and a 5-year warrant to purchase one share of Common Stock at an exercise price of $2.60 per share.
Tom Granville, Axion CEO said, "Quercus' continued commitment to our technology and our capabilities is a testament to the strength of our products and the potential global growth of the commercial battery market. It also shows confidence in the management team that we have put in place and recently strengthened by establishing long term contracts, for the express purpose of maintaining continuity and focus. We are constantly looking to add new superior talent to our team. The Quercus funds will be used to further the development and testing of our exciting new PbC(TM) technology. Our PbC batteries represent a significant advance in the new class of emerging environmentally conscious solutions for global energy issues."Granville continued, "The funds will also be used to retire the final portion of the $2,640,000 December 2007 Bridge loan and in so doing remove the last encumbrance on any of Axion's assets including our IP and all manufacturing and test equipment. Bridge lenders previously converted $335,000 of this loan to equity and now one of Axion's directors is converting an additional $800,000 of this Bridge Loan to equity, showing that he too has faith in our future. All conversions are on the same terms as the Quercus transaction."In conclusion Granville said, "We have adequate funding to take us to the next level and allow us to purchase the automated equipment necessary to produce our proprietary PbC products in commercial quantities. The funding also provides us the ability to both upgrade and purchase new equipment for our standard lead-acid lines, thus enabling us to more efficiently manufacture the battery orders that allowed us to meet the final Quercus funding milestone."
About Axion Power International, Inc.
Axion has developed and patented a next generation energy storage device that won the prestigious 2006 Frost & Sullivan Technology Innovation Award for North America in the field of lead-acid batteries. According to Frost & Sullivan, Axion's new PbC batteries have "the potential to revitalize the lead-acid battery industry by breathing new life into an established technology that was not well-suited to the requirements of important new applications like hybrid electric vehicles and renewable power."
PbC(TM) batteries use sophisticated carbon electrode assemblies to replace the simple lead-based negative electrodes used by other lead-acid battery manufacturers. The resulting device offers energy storage approaching lead acid batteries, coupled with far longer cycle life and power output approaching super-capacitors. These low-cost devices recharge rapidly and are environmentally friendly because they use up to 40 percent less lead. Axion has been producing prototype PbC batteries at its lead-acid battery plant in New Castle, Pennsylvania for more than a year using the same cases, positive electrodes, separators, electrolytes and manufacturing equipment used in its other lead-acid battery lines. The only notable manufacturing difference is the use of Axion's proprietary carbon electrode assemblies instead of lead- based negative electrodes.
Axion believes its PbC technology devices are the only class of advanced battery that can be assembled on existing lead-acid battery production lines without significant changes to production equipment and fabrication processes. It also believes it will be able to manufacture carbon electrode assemblies in volume at low cost using standard production methods that are commonly used in other industries. When its electrode manufacturing methods are fully developed, Axion believes it will be able to sell carbon electrode assemblies as virtual plug and play replacements for the lead based negative electrodes used by all other lead acid battery manufacturers.
Axion's goal is to become the leading supplier of carbon electrode assemblies for the lead-acid battery industry.