Flux Power Announces Letter of Intent to Acquire KleenSpeed Technologies
Flux Power Holdings, Inc. announced today that it has entered into a non-binding letter of intent (LOI) to acquire KleenSpeed Technologies, Inc.. KleenSpeed develops technology for distributed energy markets, including grid storage. The LOI proposes that upon the successful closing of the acquisition, KleenSpeed will become a wholly-owned subsidiary of Flux Power and Flux Power's Board of Directors will be expanded from three members to five members with KleenSpeed's current CEO, Timothy Collins, joining the Board of Flux Power and assuming the role of Executive Chairman of Flux Power.
While the specific terms of the acquisition will be announced upon the execution of a definitive agreement, the acquisition is expected to be completed within the next twelve months. The LOI contemplates that 11 million shares of Flux Power common stock would be issued to KleenSpeed shareholders upon closing as consideration for the purchase of KleenSpeed. In addition, the LOI contemplates that the consummation of the acquisition will be conditioned upon other customary closing conditions and the successful completion of a private placement of Flux Power's common stock for a minimum of $800,000 and a maximum of $2,500,000, with the proceeds to be used primarily as working capital and future product development.
Flux Power has a successful history of delivering cost efficient, alternate energy storage solutions to customers around the globe. With the successful introduction of its new lithium LiFT Pack for the material handling industry, the company sought a partner that shared its vision for innovation in delivering alternatives to lead-acid batteries and had the capability to take Flux Power's lithium solutions to the next level, as well as expand the technology into additional markets such as grid storage. KleenSpeed was an ideal match.
Timothy Collins co-founded KleenSpeed Technologies in 2007 and currently serves as President and CEO of Securities Research Associates Capital, which he joined in 2005. Upon the successful completion of the acquisition, as Executive Director of the Flux Power Board, he will provide leadership to the executive team, strengthen the company's financing activities and drive the expansion of the product portfolio into new grid storage markets.
"We are looking forward to becoming part of the Flux team. There is a tremendous synergy between our technologies, products, and vision for the alternative energy storage market. The proposed acquisition will enable both of our organizations to leverage the strength of our financial resources, broaden our product development and sales reach globally, and significantly increase our opportunity to grow revenue and returns to our shareholders," said Timothy Collins, CEO of KleenSpeed.