Zinc8 Energy Solutions Inc - ZAIRF stock

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OTC Symbol: ZAIRF | OTC Tier: Pink Current

Formation

MGX Minerals

Zinc8 Energy Solutions (OTC: ZAIRF, CSE: ABND) traces its roots to a company called MGX Minerals, which spun off a wholly owned subsidiary as MGX Renewables in October 2018. MGX Minerals shareholders received one share of MGX Renewables for every 12.4163 shares of MGX Minerals held as of October 22, 2018. Note that MGX Renewables shares were not listed on any exchange at the time of issuance.  A private placement with expected proceeds of up to $3,000,000 was also announced at this time. The offering was finalized in June 2019 with gross proceeds of $2,005,000 from the issuance of 8,020,000 shares at $0.25 per share, along with 4,010,000 warrants exercisable at a price of $0.35 until November 30, 2020.

MGX Renewables

Shortly after announcing the spin-off, MGX Renewables filed an application for listing on the Canadian Stock Exchange. The company stated, "MGX intends to complete the spin-out of 40% of the common shares of MGX Renewables (“MGX Renewables Shares”) pursuant to a plan of arrangement resulting in MGX shareholders of record on June 29, 2018 receiving one MGX Renewables Share for each 12.4163 MGX common shares (“MGX Shares”) then held (the “First Distribution”), and MGX shareholders of record on October 22, 2018 receiving one MGX Renewables Shares for each 59.8186 MGX Shares then held (the “Second Distribution” and, together with the First Distribution, the “Distribution”)." Conditional approval to list the shares was received in April, 2019 from the CSE, with final approval and trading commencing in July of that year.

Name Changes

While MGX Renewables had been operating under the name Zinc8 Energy Solutions for a long time, an official name change occurred in March 2020. The ticker symbol changed from MGXR to ZAIR. A symbol change to ZAIRF on the U.S. OTC Markets exchange did not become effective until June 2021.

In January, 2024, after a rebranding, a major strategy overhaul, and leadership changes, the company changed its name change to ABOUND Energy Inc. In addition, the ticker symbol on the Canadian Stock Exchange became ABND.

New Facility

In October 2021 the company relocated its engineering teams to a new facility in Richmond, BC and began construction of multiple test systems. The company stated in a press release, "Modifications to the facility's electrical systems have been made to facilitate both engineering verification testing and certification validation testing for multiple ZESS's. In addition, the facility has the requisite space for nine subsystem level engineering teams, each of which are tasked with testing and analyzing a specific subsystem of the ZESS for certification. Each of these ZESS's are being built to test various system levels in parallel for certification and are expected to allow Zinc8 to have a certified product available for the company's production of an initial commercial 40-kilowatt ZESS anticipated in the first quarter of 2023."

Uncertain Future

Zinc8 surprised investors with an announcement in September, 2023 stating that the CEO had resigned and the company was laying off most of it's staff. The announcement stated that the company was assessing various avenues to sustain and further its business and technological advancements. Besides looking into potential sales of its extended-duration energy storage solutions, the company is also investigating ways to license and capitalize on its technology. Moreover, they are considering potential mergers and acquisitions, as well as the potential sale of their assets. Eight days later, a private placement for up to $5,000,000 was announced, which indicated the company would continuing operation in the short term.

Zinc Air Storage System

Zinc Air Regenerative Fuel Cell System

Development of the Zinc Air Storage System (also referred to as Zinc Energy Storage System, 'ZESS') began in 2018 under ZincNyx, a predecessor organization to Zinc8. ZincNyx originally developed a 5kW system and in 2018 began work on a 20kW/160kWh system with goals of lower costs and higher energy density. In addition, this modular system was expected to allow for combining multiple 20kW units which could provide up to one Megawatt.

The system uses zinc and air to provide energy via a regenerative fuel cell based on patented zinc-air battery technology. According to Green Stock News, "Energy from the grid is stored in the form of zinc particles, similar in size to grains of sand. When the energy system is delivering power, the zinc particles are combined with oxygen drawn from the surrounding air. When the system is recharging, zinc particles are regenerated, and oxygen is returned to the surrounding air." The system has several advantages over Lithium batteries including lower cost for longer term energy storage applications.

Projects, Partnerships and Accomplishments

AZUL Energy

In its first partnership since changing to Abound, the company announced a strategic collaboration with AZUL Energy. Abound will act as a service provider of "research capabilities and development resources", with the goal of creating "a non-precious metal catalyst-coated electrode material" that can be used in the place of catalysts made from precious metals. If successful, the result will be a lower cost, yet more durable, alternative to existing cathodes.

Earlier Events

In what is likely the most significant project the company has undertaken, Zinc8 has an agreement with a leading cloud services provider to demonstrate the company's energy storage system for resilient backup. A 10kW/80kWh system is being tested and the contract calls for payment of US$200,000.

In January 2023 Zinc8 was awarded a $500,000 grant from the National Research Council of Canada Industrial Research Assistance Program. The funding will support a two year project which seeks to improve efficiency in Zinc8's energy storage system.

In July of 2022, Senate Majority Leader Charles Schumer issued a news release regarding his support for a Zinc8 manufacturing facility in Ulster, NY, stating, "I made it clear to Zinc8 CEO, Ron MacDonald, that I stand ready to help their potential expansion in the Hudson Valley in any way, including fighting to secure...federal battery research & development incentives".

In 2018 the company signed a LOI with Digital Energy Corporation to install the system at a demonstration site in New York City, with additional installations to follow upon successful completion. A Deployment Agreement in March 2020 indicating that a Zinc8 Energy Storage System will "support and enhance the economics" of a Combined Heat and Power system currently in operation in Brooklyn, New York. Another collaboration with Digital Energy is the installation of a 100kW/1.5MWh system in the Fresh Meadows Community Apartments in Queens, New York.

In January 2020 the company signed a cooperation agreement with The New York Power Authority. "Under the Cooperative Agreement between NYPA and Zinc8, NYPA will contribute a total of USD $2.55 million to the project over a 3-year period. The 100kW/1MWh behind-the-meter energy storage system will be installed at a Demonstration Site in New York State (NYS) for an existing Commercial and Industrial (C&I) customer of NYPA." The University of Buffalo was selected as the demonstration site for a 100kW/1MWh Zinc-Air Battery Energy Storage System.

During 2020 Zinc8 was accepted to participate in the green tech ACRE Incubator Program led by Urban Future Lab at NYU Tandon School of Engineering.

An agreement with Vijai Electricals in India calls for the parties to "explore joint-venture projects concerning the deployment of Zinc8's patented Zinc-Air Energy Storage System" and "explore the potential of manufacturing components of the Zinc-air Energy Storage System in India."

Along with only three other companies, Zin8 was selected as a winner of the New York City Department of Buildings Carbon Neutrality Innovation Challenge. Winners "will be supported for inclusion in the 2020 NYC Building Code".

Zinc8 signed an agreement with Australian Engineering firm SmartConsult for the parties  to explore projects concerning the deployment of Zinc8's patented Zinc-Air Energy Storage System, including uses such as aquatic centres, remote mines and behind-the-meter applications. SmartConsult has deployed over 8.5 MW of solar capacity in over 100 commercial projects.

A project in Surrey, British Columbia known as the '75 House' includes a Zinc8 energy storage system, and the company announced in November 2020 that it would be delivering the system during the following month. There does not seem to be any confirmation from the company that the system was delivered, or how it is performing if it was installed.

Zinc8 was selected to join the Rocky Mountain Institutes’ Third Derivative (D3) Accelerator Program. The goal of this program is to increase the success and reduce the time to commercialization for climate innovation technology.

Zinc8 was one of nine companies selected to join the New York State Manufacturing Accelerator ‘Scale for ClimateTech’ program. According to the press release, "The 10-month program of Scale for ClimateTech helps hardware-focused cleantech startup companies as they land early adopters, scale-up manufacturing, grow their teams, develop relationships with supply chain partners, and transform business operations."

Zinc8 was selected as the ‘Energy Tech Innovator' at the WE3 Summit, which is "a collaboration between Texas based research organization Zpryme and Smart Energy Water".

The Real Estate Board of New York named Zinc8 a "Best-in-Class" solution in the Energy Storage Category for the 2022 PropTech Challenge.

Leadership

Ron Macdonald, who led the company since 2019, resigned as CEO and director in September, 2023, in conjunction with other significant changes. Current Chief Technology Officer and the Executive Vice-President Dr. Simon Fan until a new CEO is chosen by the Board of Directors. This change was a surprise to investors and resulted in a great deal of uncertainty about the future of the company.

Regulatory Approvals and Standards Compliance

In May, 2019 MGX Renewables received material attestation from the Canadian Standards Association for its energy storage systems. In addition, the company "staffed a member on the Standards Technical Panel for UL 9540 and UL 9540A to contribute to development of energy storage safety standards" and "is also contributing to the development of NFPA 855, Standard for the installation of Energy Storage Systems and IEC energy storage standards."

The test systems being built in the Richmond, BC facility will be used for certification to the UL and CSA battery safety standards.

Funding

Initial Funding Round (June 2019)

The first funding round, completed in June 2019 provided proceeds of $2,005,000 with the issuance of 8,020,000 shares and 4,010,000 warrants (redeemable until November 30, 2020 with an exercise price of $0.35).

Private Placements

September 2019

A non-brokered private placement in September 2019 produced proceeds of $500,000 from the sale of 8,333,329 shares (at $0.06 per share) and an equal number of warrants (redeemable for two years at a price of $0.08 in the first year and $0.12 in the second year).

February 2020

A non-brokered private placement in February 2020 resulted in proceeds of $3,066,746 from the sale of 27,879,513 shares (at $0.11 per share) and an equal number of warrants (redeemable for two years at a price of $0.155 during the first year and $0.40 during the second year.

September 2020

In September 2020 a non-brokered private placement was completed, providing proceeds of $1,400,000 from the issuance of 8,750,000 shares at $0.16 per share and an equal number of warrants redeemable for two years at a price of $0.30.

February 2021

A marketed private placement offering of 28,750,000 shares at $0.54 per share for proceeds of $15,525,000 was completed in February 2021. In addition, 1,725,000 warrants were issued to the agents, with an exercise price of $0.54 and redeemable until February 24, 2023.

December 2022

A private placement of 15,000,000 shares at $0.20 was announced in December 2022 which is expected to raise up to $3,000,000. The proceeds will fund research and development as well as support operations, management and administration. Each share will come with a warrant exercisable for up to two years at a price of $0.30 during the first year and $0.40 during the second year.

September 2023

Zinc8 announced planed to offer a maximum of 333,333,333 shares at $0.015 each, aiming to generate $5,000,000 in gross proceeds. A primary order worth $2,000,000 for 133,333,333 shares was stated to be anticipated. The company said it would prioritize its existing shareholders for the remaining $3,000,000. The funds were to cover costs like operational expenses, R&D, business advancement, salaries, investor engagement, marketing, and professional fees. This private placement was never completed.

November 2023

Zinc8 concluded a non-brokered private placement financing, as initially disclosed on November 21, 2023. The Company distributed 10,752,500 units at a rate of $0.05 per unit, resulting in total gross proceeds of $537,625. Each unit comprises one common share and one share purchase warrant. Each full warrant grants the holder the right to purchase an additional common share of the Company at an exercise price of $0.10 until December 22, 2025. Shares and warrants purchased in this placement must be held until April 23, 2024.

February 2024

Abound announced plans for a private placement of up to 4,285,714 units at $0.35 per unit, with the goal of raising $1,500,000. Each unit includes one common share and a warrant for one-half of a share. Warrants have an exercise price of $0.50 and will expire two years after being issued.

NYSERDA Grant (January 2023)

The State of New York has offered Zinc8 Energy Solutions $9 million in incentives to manufacture its energy storage systems in the state. The incentives are part of the New York State Energy Research and Development Authority's (NYSERDA) initiative to support clean energy manufacturing and job creation in the state. The company plans to build a manufacturing facility in New York to produce its energy storage systems, which are designed to store renewable energy generated from sources such as solar and wind.

The incentives offered by NYSERDA include up to $6 million in Excelsior Tax Credits and up to $3 million in capital grants. In exchange, Zinc8 Energy Solutions has committed to investing at least $70 million in the manufacturing facility and creating at least 80 new jobs in the state. The initiative is part of New York's ambitious clean energy goals, which include generating 70% of the state's electricity from renewable sources by 2030 and achieving carbon neutrality by 2050. The state's investment in Zinc8 Energy Solutions is aimed at supporting the development of clean energy technologies and creating new jobs in the growing clean energy sector.

UCIDA Bond (March 2023)

Zinc8 Energy Solutions has received a US $10 million bond from the Ulster County Industrial Development Agency. The bond will be used to finance the construction of a 10 MW zinc-air battery energy storage system at an industrial park in New York. The construction of the 10 MW energy storage system is expected to create over 60 jobs and generate $8 million in economic benefits for the local community.

MGX Minerals Settlement

In March 2020 the company agreed to pay MGX Minerals $1.5 million to settle a debt claim. In addition, 5,500,000 shares of common stock were sold to Zimtu capital for $0.10 per share. The shares were required to be held in escrow for two years. Other aspects of this settlement include mutual releases of all claims by Michael Reimann and Jared Lazerson, with Lazerson receiving 800,000 shares and an equal number of warrants (redeemable for two years at an exercise price of $0.50 per share).