Axion Power International, Inc. (OTCMKTS:AXPW) shares slid nearly 9% on Tuesday to $0.0112. Share prices have been trading in a 52-week range of $0.00 to $676. The company has 57.90 million shares outstanding at a market cap of $1 million.
Axion Power International is an energy solutions company that has developed carbon/lead batteries, and integrates its batteries into energy storage systems, renewable energy systems, off-grid applications, automotive and other applications. It sells batteries, energy storage systems and engineering services as part of its product offerings, and can assist battery end users to adapt its batteries to various applications.
The company’s lead carbon or PbC batteries and battery components have application in a range of energy storage systems such as power grid stabilization, micro-hybrid vehicles, hybrid commercial trucks, automated guided vehicles, and off-grid and renewable energy storage.
In a press release this week, Axion Power International announced that it has entered into a Tri-Party Letter of Intent with Fengfan Co. Ltd. of Baoding, China and LCB International Inc. on the sale of its technology to the country, as well as Taiwan, Hong Kong and Macau. This also includes non-exclusive licensing rights in North America.
The Letter of Intent was jointly signed by all parties on October 31, 2016 after many months of negotiation. The deal calls for a $5 million cash infusion into Axion over a 24-month period, with Fengfan making an initial cash down payment of $250,000 to Axion by December 1, 2016 upon receiving regulatory approvals.
Apart from this, the three parties are also targeting a definitive Tri-Party Agreement by the end of January 2017. If so, Axion Power International stands to receive quarterly payments by the first quarter of next year. After one year of the achievement of agreed-upon PbC volume production goals and battery performance, the company also stands to receive a royalty of 2% of Fengfan’s net sales of PbC batteries in Greater China and North America, with a guaranteed annual minimum of $1 million.
“We are off and running as we look to 2017 to be a landmark year for Axion. This is our first major win since we re-focused Axion’s strategic direction. We have been working heads-down and full speed ahead with Fengfan and LCB,” remarked Axion Power International CEO Richard Bogan.
He added that their collaborative efforts with the two companies have been able to bear fruit in a short period of time. Meanwhile, executive vice president of Fengfan Zhen Zhijun noted that the addition of PbC technology will greatly expand their product portfolio so that it can address many emerging market needs, adding that they plan on taking Axion’s technology into volume production in China at speed and cost.
“The collaboration will fully leverage the complementary strengths of the three partners to achieve commercial scale applications of PbC technology through a global modular innovation approach – invented in the U.S., made in China and sold around the world,” said LCB principal Dr. WJ Gesang.
To be more specific, the IP package in the agreement covers the sale of Axion’s five PbC patents in China, non-exclusive license to its 15 PbC patents in the United States, and access to all of Axion’s intellectual property rights to PbC technology for use in a wide variety of applications for Fengfan and LCB. Fengfan has been the leading automotive lead acid battery manufacturer in China for decades while LCB is an investment and business development firm focusing on the battery energy storage system for motive and stationary utility applications in Asia.