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Why I'm an EEstor Skeptic

|Includes:EEStor Corporation (ZNNMF)

EEStor worries me because the only entity that ever talks about them is Zenn Motors (OTCPK:ZNNMF), a Toronto company that is blatantly promoting its ownership of a minority interest in EEstor interest to maintain a $170 million market capitalization that its business fundamentals could never justify. The lawyer in me considers the whole smarmy process public relations through hearsay.

It's not at all encouraging that EEstor has allegedly been making performance claims that approach the maximum theoretical limits of both physics and chemistry. While extraordinary results can frequently be obtained in a laboratory staffed by PhD with unlimited time and budgets, they are not possible from a factory owned by a company with no manufacturing expertise and staffed by guys in gimme caps

I also find the idea that EEstor will go from a first generation prototype at the end of this year to a commercial product next year completely ignores the complexity of taking a phenomenon from the laboratory and turning it into a manufactured product. EEstor apparently needs material purities measured in single digit parts per million. That is $6,000 toilet seat country, not mass produced $100 per kWh energy storage devices. On balance I would be amazed if EEstor had a product sometime in the next decade.

My career is littered with companies that did wonderful things in the laboratory but could never turn the amazing science into a commercial product. As a case in point, I offer Applied Nanotech Holdings (APNT.OB). I was counsel for their IPO in 1992 and the stock had a pretty good run in its early days. To date the company has never generated a penny of revenue that didn't come from contract R&D.

Until I see a lot more hard data coming directly from EEstor supported by credible third party confirmation, I'll continue to believe that EEstor is just another Texas R&D company that's "all hat and no cattle."

Stocks: ZNNMF