Subsequent to the end of the first quarter, Axion Power announced the signing of an agreement to supply its PbC batteries, its PbC energy storage technology and certain PbC components to Alpharetta, GA-based Exide Technologies Inc. The companies intend to utilize the batteries in a 3-phase program beginning with an initial test period with escalating deliveries of batteries by Axion. The goal is to promote batteries for electric vehicles, hybrid electric vehicles, plug-in electric vehicles, electric grid applications, military and marine transport applications, automobiles and light trucks and a variety of other applications.
Chief executive officer Thomas Granville commented, “During the first quarter we had two major initiatives: to bring our carbon electrode manufacturing to New Castle, install it and begin automated production of our proprietary electrode material – and to bring to fruition negotiations with large potential distributors and eventual users of our proprietary product. The first of those goals has now been accomplished – the automated equipment has been completely installed and is being debugged. The achievement of the second of those goals is evidenced by our agreement with Exide. We will be selling product to them for testing and distribution to their customers. This agreement will not restrict us from marketing directly to the applications that are important to us such as power quality, grid storage, wind, solar and the automotive conversion market.”
“An ongoing goal for us has been to reduce expenses, especially SG&A, and our current quarter reflects a sharp reduction in that area. We are also fully cognizant that what distinguishes Axion from other battery companies is our proprietary technology and learned know how. We are always looking for R&D and engineering talent and we have increased our budget and expenditures in this area as we prepare to take the company to a new level of science and manufacturing production.”
Granville continued, “We have also maintained production of our own collector-car batteries and race-car batteries. Additionally, we are producing a line of flooded batteries to more profitably fill some of the capacity created from a slow down in the markets serviced by our major customer, a large lead acid battery company. Toll processing has always been viewed as a ‘filler’ strategy for us and in Q-1 we introduced a line of AGM lead acid batteries – the Sure Energy product, which will eventually fill some of the flooded line production area. This ‘superior margin’ AGM product line will eventually evolve into our PbC product which will use an identical case, cover and separator material. We have also begun work on our aggregate of $2.38 million in grants from the US DOD, the Commonwealth of Pennsylvania and the Advanced Lead Acid Battery Consortium (ALABC). And finally, but most importantly, we are working through the specifications of the products we will be providing to Exide and we anticipate commencing delivery of the initial test quantities of those PbC batteries during the upcoming quarter.”
“There are numerous markets available to us and we are picking our spots. An example is a project to build a renewable-energy electric-car charging station; we are working on that project with a privately held company called Envision Solar, based in San Diego and their partnership includes car manufacturer – Bright Automotive. We are also participating in demonstration projects with NYSERDA for the storage of renewable energy collected from rooftop solar panels at CUNY College in New York City, and on another project with NYSERDA to test our PbC batteries for use with electric grid applications. The utility site demonstration project has repeatedly been delayed by regulatory and other issues having nothing to do with our batteries, but we are optimistic that it will go ahead in the relatively near future,” Granville concluded.
At March 31, 2009 the company had cash of $3.2 million, a current ratio of 3.18:1 and no long-term debt. Stockholders’ equity stood at $6.1 million.
