Medis Enters MOU with Russian Groups for Production and Sale of Fuel Cell Power Pack
Medis Technologies Ltd. announced that it has entered into a Memorandum of Understanding (MOU) with two Russian business groups, defining programs for the purchase of Medis 24/7 Power Packs and ultimately for those groups to establish a production line for Medis fuel cell products in Russia. The two groups are the Association for Advanced Technologies of Russia (ASPECT), which represents the business development arm of a large group of high tech Russian entities and is the prime contractor for the largest Russian Federation-funded project for the development of fuel cells for portable applications; and Tenzor MA, a leading Russian technology company primarily operating in the area of complex safety and fire control systems and management and control systems for major facilities such as nuclear power plants.
The parties have established a detailed milestone-based program for the certification of the 24/7 Power Pack in Russia, its marketing and distribution in Russia and finally the establishment of a full production assembly capability by Tenzor for the Russian market. The MOU provides that after satisfactory completion of testing on UL certified units, Tenzor will purchase 10,000 24/7 Power packs from Medis' semi-automatic line in Israel to commence promotion and marketing of the product in Russia. If the outcome of these promotional efforts are satisfactory to both parties, then the parties will move on to the next milestone which include sales in Russia of 250,000 Power Packs per month and then the establishment of a Power Pack assembly and fuel facility at the Tenzor plant capable of producing 1.5 million Power Packs per month. The transaction contemplates an investment by the Russian groups of approximately $25 million to build the automated production line in Russia and the purchase of certain components, including framed electrodes, power management and others from Medis. In addition to the program relating to 24/7 Power Packs, the parties' agreement contemplates their cooperation in the development of larger stationary fuel cells of approximately 2kW for development and sale in the Russian Federation.
Robert K. Lifton, Chairman and CEO of Medis Technologies stated that, "The establishment of this important relationship with Tenzor and ASPECT for the Russian market is a key achievement for advancing Medis' international marketing program as well as expanding our production capacity to meet the demands of those markets. Members of the Medis team, led by the company's Chief Technology Officer Gennadi Finkelshtain, have had a long and successful history of cooperating with Russian entities in advanced technology. We view this as a major expansion of that cooperation to include production and marketing for what we believe is a large and important market for our 24/7 Power Pack. It also represents a template for potential future transactions in other parts of the world."
