Millennium Cell Inc. and Horizon Fuel Cell Technologies announced that they have signed a Letter of Intent ("LOI") to jointly develop and sell products on a global basis. The companies have also entered into a definitive agreement which will result in the exchange of their respective equity valued at $5 million. Under the LOI, each company will receive preferred product pricing, as well as the ability to resell certain products developed by the two companies on a global basis. It is expected that a Definitive Agreement for the business arrangement will be executed within the next 30 days.
To consummate the equity transaction, Millennium Cell issued to Horizon approximately 12% of Millennium Cell’s outstanding shares in exchange for a non-interest bearing convertible note in the principal amount of $5 million. The one-month note from Horizon will automatically convert into approximately 7% of Horizon’s outstanding common stock upon a vote by Horizon’s shareholders. Both parties have agreed to a one year lock-up period for the common stock. A current report on Form 8-K to be filed by Millennium Cell with the Securities and Exchange Commission sets forth the material terms of the transaction with Horizon.
In August 2007, Horizon licensed Millennium Cell’s Hydrogen on Demand® technology for the purpose of co-developing compatible hydrogen storage cartridges for the next wave of Horizon fuel cell products. The intent of this agreement is to strengthen the relationship between the two parties and enhance their ability to jointly develop and sell products on an accelerated basis. Several products have already been identified for development and it is expected that the initial products in this collaboration will be manufactured by Horizon.
Horizon recently demonstrated an emergency power unit – the prototype system provided approximately 10 hours of runtime at 50W utilizing Horizon’s fuel cells powered by Millennium Cell’s Hydrogen on Demand® chemical hydride fuel technology. Horizon and Millennium Cell plan to launch the emergency power unit under in 2008 as a clean, quiet, high energy alternative to lead acid battery based portable power packs. The two companies anticipate developing additional power source products for consumer and military use to be launched in 2008 and 2009.
