Lithium Technology Corporation enters strategic alliance and investment agreement with FN Group for large format Li-ion packs for automotive applications

The award of warrants is tied to the achievement of a series of performance targets with the last target being in 2015.

In summary, the maximum number of shares issuable to the FN Group under the terms of the warrants is 4.9 billion and will be awarded to the FN Group when the cumulative volume of contracts for LTC derived through the FN Group reaches approximately 100 times the current annual manufacturing capacity of LTC.

Further, LTC and a member of the FN Group have agreed to enter into a joint venture pursuant to the terms of a Joint Venture and Shareholder’s Agreement which will develop, market and manufacture Complete Energy Management Systems (CEMS). CEMS consist of LTC’s large format Lithium-Ion battery cells and FN Research’s electronics including battery management system, charger and DC-DC convertor. The intent of the parties surrounding the Joint Venture is to provide to the market a complete energy management solution for use in future electric and hybrid electric vehicle power trains. The parties will share equally in the investment in and income from the Joint Venture, while a member of the FN Group will hold 70% of the voting rights of the Joint Venture.

LTC will contribute its experience with several other automotive applications for its battery cells such as Volkswagen’s Flottenversuch, Karmann’s electric vehicle, and eRUF’s and DesignLine’s hybrid buses, which are operational in Baltimore, MD, New York, NY and at the Charlotte, NC Airport.

As part of the transaction, William Chia, Director of Operations of FN Research, will join LTC’s Board of Directors as well as sit on LTC’s audit committee.

FN Research is a UK-based research and development company principally engaged in the development of fully integrated and optimized proprietary systems, sub-systems and components for hybrid electric and electric drive trains.