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Posted: Aug 16, 2011
HzO Completes $7 Million Capital Raise
(Nanowerk News) ZAGG Inc. announces the closing of a $7 million Series B Preferred Stock financing for HzO, Inc., a Utah-based company with WaterBlock™ technology for consumer and industrial electronic assemblies.
"I have been a believer in HzO technology since I was first introduced to it, and I felt it could be a global success," said Robert G. Pedersen II, CEO and President of ZAGG. "This financing advances the commercialization of the technology, which we have continued to develop since acquiring it. I believe ZAGG will benefit from this technology long into the future with its equity stake in HzO." During November 2010, ZAGG Inc. acquired from Northwest Maritime Institute ("NMI") a majority stake in HzO with the vision of using the HzO technology to protect mobile electronics.
HzO entered into a Series B Stock Purchase Agreement pursuant to which HzO issued shares of its newly designated Series B Preferred Stock to Harris & Harris Group, Prudence Holdings and Pike Capital Partners for cash of $2.5 million. Upon HzO achieving certain milestones, the investors will invest up to an additional $4.5 million in cash for additional shares of Series B Preferred Stock. In addition, the new investor syndicate, with an additional investment from ZAGG and three ZAGG executives, acquired the remaining interest in HzO still held by NMI, allowing the new HzO investors, ZAGG executives and ZAGG to own 100% of the Company. ZAGG will continue to be the largest equity owner of HzO.
In addition, ZAGG and HzO entered into a distribution and marketing agreement, pursuant to which ZAGG will provide marketing and distribution services for HzO products. Under the terms of the distribution agreement, ZAGG will assist HzO in rolling out its first HzO-coated consumer electronic devices.
The HzO technology is a unique process that creates a nanoscale coating that protects electronics against damage caused by exposure to fluids, which is the leading cause of lost functionality in electronics. The coating is transparent and can be applied to a variety of surfaces including plastic, metal and glass. In addition to water repellence, the coating can repel many oils, synthetic fluids, hazardous materials, dust and dirt. HzO intends to integrate its technology in multiple industries including automotive, first responder devices, military devices and vehicles, solar energy, and industrial applications.