Ener1 and Delphi Complete Lithium Battery Transaction

October 20, 2004 by Jeff Shepard

Ener1 Inc. (Fort Lauderdale, FL), a developer of lithium batteries and fuel cells, and Delphi Corp. have completed a transaction to combine their lithium battery operations into a new company. The new company will pursue opportunities for high-energy, long-life lithium batteries in diverse markets, including power tools, automotive, uninterrupted power supplies, medical devices, personal mobility and military applications.

The new company's name, EnerDel, builds upon the venture's capability to deliver new solutions for stored energy and battery power. EnerDel will emphasize the significant performance, size and cost advantages of lithium battery technologies developed by Ener1 and Delphi. Ener1's nanotechnology-based vapor deposition process is expected to offer substantial cost advantages for EnerDel's new battery products due to greater choice of potential electrode materials, faster production times and elimination of binders and coating materials in the production of lithium batteries. EnerDel will be headquartered in Ft. Lauderdale, FL.

Ener1 owns 80.5% of EnerDel's common stock, and Delphi owns 19.5%. Delphi also received EnerDel 8.25% Series A Preferred Stock with a 90-day right to exchange some or all of the preferred for Ener1 common stock at a price of $1.15 per share. Also as part of the transaction, Delphi obtained warrants to purchase up to seven million shares of Ener1 common stock. Initially, Delphi will have one representative on the EnerDel board of directors, which will have six members.