The Wall Street Journal editorial board did something that the local presstitutes didn’t do, and looked into the subject of the non-political “justification” for the first day of Obama’s campaign tour so his campaign, Tom Barrett’s campaign, and the DPW didn’t have to pay for the trip, 30-employee ZBB Energy. They’re not-exactly financially viable:
We wonder who in government looked at ZBB’s filings with the Securities and Exchange Commission. Since going public in June of 2007, ZBB has been hemorrhaging money. The firm lost $4.9 million in fiscal 2008 and $5.5 million in fiscal 2009. In its most recent filing, in May, it said it had lost $6.9 million for the first nine months of its current fiscal year. It explained it had a “cumulative deficit” of $44.1 million and informed shareholders that it “anticipates incurring continuing losses.” It acknowledged that its ability to continue as a “going concern” was predicated on its ability to drum up additional funds.
In March the company engaged in various stock transactions—including a private placement to the company’s directors—to raise some $1.9 million. It obtained a $1.3 million loan from the federal stimulus program and borrowed $1.5 million more from Investors Bank. In June it announced a debt agreement, which would allow it to tap a further $10 million….
The company also acknowledged in its May filing that the 72,000 square foot manufacturing facility it bought in 2006 is “currently producing at less than 10% of its expected capacity.” That means it can’t currently access the $14 million in federal tax credits, which were supposed to help with equipment for a new facility. Meanwhile, private investors have soured on some energy-storage companies. ZBB’s initial public offering was priced at $6 a share in 2007, and it closed yesterday at 70 cents. (Note – it closed today at 66 cents)
ZBB’s chief financial officer, Scott Scampini, acknowledges the losses and tells us that one problem was that the old management thought “people would just jump and buy this stuff.” New management, he says, now has a “real business plan” to become cash-flow positive in “short order”—by becoming cheap enough to be “competitive with fossil fuels.”
I hate to break the bad news, but the two methods of producing energy that are dependent on batteries aren’t going to be competitive on a cost basis anytime soon (at least unless all the conventional methods of producing energy are made prohibitively-expensive) – solar is at least twice as costly as conventional power, and at least in Wisconsin, wind farms is going to become even more expensive than the 50% premium as the Public Service Commission is expected to require compensation to nearby landowners.
WISN-AM’s Mark Belling spent much of the first hour of today’s show on this, including taking a rather testy phone call from ZBB CEO Eric Apfelbach (starting at about the 5:40 mark in Hour 1 Part 2 of today’s podcast). Belling got Apfelbach to admit the Porkulus loan (of which $490,000 was already tapped) didn’t create a single new job despite the anticipation that it would create 175 jobs, and that he is a Crony “Capitalist” who is more than happy to suckle off the teat of government.
