Warranting Change: Global Thermoelectric (GLE) is interested in inventing and applying fuel cell technologies to existing infrastructure. Unlike well-known rival Ballard Power (BLD), Global isn't trying to reinvent the internal combustion engine. Rather, the Global fuel cell works on multiple fuels like propane, gasoline and natural gas all current available with supporting delivery systems.
By Martin Reesink, September 19, 2000
Late August, 2000.
Jim Perry,
President and CEO
Global Thermoelectric Inc. (GLE)
Martin Reesink: Can you confirm the equity financing that was announced on August
22 for (Cdn.)$100 Million, and tell us a little more about how warrants have worked for
you?
Jim F. Perry: Special warrants are a uniquely Canadian financing device. Their chief
advantage is that it is a quick and dirty approach to financing, and you can obtain them
virtually without a prospectus. You are really by-passing the prospectus and putting it
off for a while. You can sell the warrant prior to the prospectus.
So, in one or two days you can have the money in the bank, after you have sold the
warrants. Once the paper work has been performed, then you execute the conversion
back into shares, in our case 2.9 million common shares.
Martin Reesink: How are the warrants' value measured when the deal is announced?
Jim F. Perry: They are valued in dollars, in this case, I can confirm that we have
cash-in-bank financing of $100 million.
Martin Reesink: Where is this funding largely going to used?
Jim F. Perry: Our chief objective is to speed up research and development of our solid
oxide fuel cells (SOFC) As you know, we are a radically different technology than
Ballard's (Ballard Power - TSE: BLD). Theirs is a Proton Exchange Membrane (PEM)
which is a low-temperature device. Ours is solid and high temperature and uses a
ceramic membrane. Our other chief advantage -- the best advantage in my view -- is
that we can use any hydro-carbon fuel: propane, gasoline and natural gas.
Martin Reesink: So ordinary gasoline is also possible as a fuel in your systems?
Jim F. Perry: That's correct. So you can see that the support networks is already in
place. There are gasoline stations everywhere, and we are not going to be hamstrung
half-way through our development because we lack service stations for hydrogen. If
you look at some of the competition there is absolutely no fuel structure or support for
hydrogen. Not yet. They are working on it. But the turn-around is very, very long-term
and the costs enormous.
Martin Reesink: Granted, but what about the pollution facet which is what is
attracting and entrancing consumers and investors alike -- if you are still going to use
gasoline the pollution factor is still going to be a problem isn't it? You will have daunting
regulatory issues.
Jim F. Perry: The pollution factor is a fuel problem, not a fuel cell problem. We're green
too. The entire well-to-wheels issue comes in here. There have been plenty of studies
performed out there that have been done by government, by private outfits and jointly.
So what about pollution? Well, it's in -- it's part of the cycle, isn't it? Take Alberta,
which obtains 90 percent of its power and electric power from conversion of burning
coal plants. If you are planning to produce huge amounts of hydrogen from electrolysis
processes, you still have to generate the energy to produce that, don't you?
So, really all you're doing is displacing the pollution from one place to another. You're
not removing it. You're just hiding it further behind in the fuel consumption chain if you
will. You're still producing pollution -- that's the whole point. We believe more and more
people are going to understand that. The fact that you are not burning it at the wheel
does not take it away from the well or the burn-level problem.
Martin Reesink: Any patents that are going to protect your work as you develop your
auxiliary systems engine supports?
Jim F. Perry: Yes, we have three patents filed in the U.S. to date. As you know,
patents take 2-3 years to get ascertained, so we have a wait yet. But the patents are
in the works and we expect them to act for us in not more than 3 years.
Martin Reesink: What differentiates you from Ballard? Don't you think that they have a
clear advantage given the big players they have signed deals with: Ford (F), Honda and
DaimlerChrysler (DMX)?
Jim F. Perry: As a rule, I do not comment on what Ballard is doing. We are really going
in a different direction, and we have a different philosophy. Ballard's is working to
replace the entire engine. They want a new motor for the vehicle. What we are doing is
working towards an auxiliary.
We still have combustion happening, but at a radically more efficient rate. And with a
fuel cell to power all the auxiliary systems, so that there is much less pull, if you will, on
the actual main engine, so that, in turn, it requires less power -- fuel -- itself. We are
not going anywhere faster than Ballard's. We just are taking a different direction
altogether.
Martin Reesink: So how do you explain the modern hype about fuel cells if we are so
far away from the marketing of fuel-cell vehicles, so far from reaching the consumer?
Jim F. Perry: Well, for one thing, no one has ever crash-tested a fuel-cell engine. That
test alone will require several years. No one has ever crossed that threshold yet and it
is a requirement with Transport Canada and the National Highway and Transportation
Administration (NHTSA) in the U.S. This is before you can put a vehicle on the road. It
just has to be done. I don't think there is any substitution or lee-way there.
Martin Reesink: Where does this new slice of funding now put you in the alternative
fuels technology arena?
Jim F. Perry: With this $100 million in the bank, we have now become a full-fledged,
real player in this field. Our research is going to speed up. The big difference in the
automotive market is that we're looking at auxiliary markets, and that of course involves
a totally different cost structure. We are now working with Delphi, and they are working
with Renault and BMW. So we have our partners as well.
Martin Reesink: Thank you for speaking with Stockscape. We wish you luck in your
newly funded research and development endeavours.
***WARNING: Martin Reesink is a Canadian law school graduate specializing in business law, financial statement and auditor opinion analysis. He has worked in France, Russia and Canada. The text provided to Stockscape by Reesink does not substitute professional and case-specific financial and legal advice.
stockscape.com ... original report
If you are curious about GLE's customer base participation then check out this link also ...
One manufacturer, Global Thermoelectric Inc. of Calgary, Alberta, Canada, exhibited its solid oxide fuel cells design at the September Intelec 2000 show in Phoenix and says that it is getting interest from some major carriers.
"Telecom engineers have expressed frustration that fuel cell
technology always seems to be two years away from commercialization." says Bernie LeSage, vice president of GTI (sic). "We're almost there now, and we think we can get down to the $1 to $2 per watt range that telecom applications require." GTI (sic) currently is lining up partners to participate in testing beta units at remote oil and telecom sites next summer.
telecomclick.com ... telecom report |
