NEW CASTLE, Pa., Nov. 1, 2016 /PRNewswire/ -- Axion Power International, Inc. (OTCQB: AXPW) has entered into a Tri-Party Letter of Intent with Fengfan Co. Ltd. of Baoding, China (SH. 600482) and LCB International Inc. of BVI, regarding the sale of Axion's PbC® technology in China, Taiwan, Hong Kong and Macau to Fengfan and LCB, along with non-exclusive licensing rights in North America.
A culminating event after many months of negotiation, the Letter of Intent, jointly signed by all parties on October 31, 2016, calls for a $5 million cash infusion into Axion over a 24-month period. As a result of the signing of this Letter of Intent, Fengfan will make an initial cash down payment of $250,000 to Axion by December 1, 2016 upon receiving regulatory approvals.
It is expected that this non-dilutive cash infusion, along with Axion's successful cost cutting measures, will lay a strong foundation for the company's ability to complete other major licensing agreements currently in development internationally.
Concurrent with the signing of this Letter of Intent and the receipt of the $250,000, the three parties are targeting a definitive Tri-Party Agreement by the end of January 2017. Once finalized, quarterly payments to Axion are anticipated to begin in the First Quarter of 2017. Then, starting one year following achievement of agreed-upon PbC volume production goals, or agreed-to PbC battery performance and cost objectives, Axion will receive a royalty of two percent of Fengfan's net sales of PbC batteries in Greater China and North America, with a guaranteed annual minimum of $1 million.
Dr. WJ Gesang, principal of LCB, said, "LCB is glad to bring together Axion and Fengfan in this tri-party strategic partnership. 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."
The IP package includes the sale of Axion's five PbC patents in China; nonexclusive license to its 15 PbC patents in the United States; and will give Fengfan and LCB access to all of Axion's intellectual property rights to PbC technology for use in a wide variety of applications, from automotive to energy storage.
"Fengfan aspires to be the top lead-acid battery manufacturer in China as well as the global marketplace," said Mr. Zhen Zhijun, executive vice president of Fengfan. "The PbC technology will greatly expand Fengfan's product portfolio to address many emerging market needs of high power and high rate partial state of charge applications in automotive and utility energy storage. Fengfan will take the PbC technology, invented by Axion over the past decade, into volume production at China speed and cost."
This licensing agreement is a significant success resulting from the strategic direction laid out for Axion by CEO, Richard Bogan, in February 2016, and the collaborative effort among the parties which began in May 2016.
"We are off and running as we look to 2017 to be a landmark year for Axion," said Bogan. "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. These collaborative efforts with our new partners are bearing significant fruit in a short time. I could not be more pleased with these partners and look forward to the great commercial strides we will jointly make."
About Axion Power International, Inc.
Axion Power is a technology leader in lead-carbon energy storage. Axion's patented lead carbon battery is the only advanced battery technology with an all carbon negative electrode. Axion's negative electrodes are designed to be directly substituted for lead acid negative electrodes producing the unique benefits of the Axion carbon technology. Axion Power's primary goal is to become the leading supplier of carbon electrode assemblies for lead-acid battery companies around the world. For more information, visit www.axionpower.com
About Fengfan Co. Ltd.
Fengfan Co., Ltd. belongs to the China Shipbuilding Industry Corporation. Fengfan was established in 1958 and was listed on the Shanghai Stock Exchange in July of 2004 (SH.600482). Fengfan has been the leading automotive lead acid battery manufacturer in China for decades. Fengfan is on the list of "The Top 100 Automotive Component Suppliers in China" and the list of "The Top 100 Machinery Industry Companies in China". For more information, visit www.sail.com.cn.
About LCB International - BVI
LCB International, Inc. is an investment and business development firm focusing on the battery energy storage system for motive and stationary utility applications in Asia.
Certain statements in this Press Release are "forward-looking statements" within the meaning of the Private Securities Litigation Act of 1995. These forward-looking statements are based on our current expectations and beliefs and are subject to a number of risk factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Such risks and uncertainties include the risk for the Company to complete its development work, as well as the risks inherent in commercializing a new product (including technology risks, market risks, financial risks and implementation risks, and other risks and uncertainties affecting the Company), as well as other risks that have been included in filings with the Securities and Exchange Commission, all of which are available at www.sec.gov. We disclaim any intention or obligation to revise any forward-looking statements, including, without limitation, financial estimates, whether as a result of new information, future events, or otherwise.
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SOURCE Axion Power International, Inc.