Chapter 24: Deals and Surprises

Dave heard the scream of joy from down the hall. Both Jenny and Nikky surged out of Dave’s office with him in hot pursuit.

JR came running towards them in the other direction waving two magazines and two of the country’s most read newspapers. She looked sexy as hell because she’d realized that tall spike heels and short skirts without undies were an ideal combination to titillate her colleagues and especially Dave.

“WE’RE THE HOTTEST THING IN THE NEWS THIS WEEK. LOOK AT THIS COVERAGE!” She fell all over her teammates as she unfolded the front pages of the papers and the magazines to show them the feature stories. Fortunately, there was a table in the hall where she could spread out the periodicals.

JR crowed, “The Consumer Electronics Show three weeks ago, our booth, even Ashley singing for us, and our presentation made all of this happen. We couldn’t have bought coverage and recognition like this for twenty million dollars. Moreover, Larry is back in his office right now talking to the national networks for the four big guys about how they could cover our batteries and their potential. The Tesla and our batteries are going to become famous. NBC even wants to do a scientific special for an hour about how these will change civilization. CBS wants to do a segment on 60 Minutes.“

Everyone was grinning. Dave was scanning the article in Time magazine. Nikky was making approving noises next to him as Jenny looked over her shoulder at the front-page Wall Street Journal article.

Suddenly, Deborah appeared in the hall at a run. She yelled, “JR, come quick. Elon Musk is on the phone. The man himself! He wants to talk to you about how he can start equipping ALL his cars with EneRG batteries.”

JR screamed in happiness and took off for her office as fast as she could move in her sexy heels. Dave had noted that the wrap-around blouse she wore had been especially revealing.

Nikky shook her head, “We have to do something about our production capacity. We can’t make our cells fast enough.”

Jenny expounded, “License. License. License. Just go for the royalties. We don’t have to make ALL of our products.”

Dave commented, “Let’s see what we’ve got and then I think I need to call a board meeting. This kind of decision may be above my pay grade to make alone.”

Nikky reminded him, “You might want to involve your sexy friend at Bank of America – Wendy Hayden.”

Dave asked, “How much of her money do we have left?”

Nikky did a mock pout, “A little less than a quarter of a billion, but most of that is committed.”

“I’ll ask Mark and Owen what they think. My guess is that she’s in the meeting, too. She kind of bought in for that kind of money.”

JR burst through Dave’s door thirty minutes later. “Musk just bought into the whole concept. It solves the biggest problem with his expansion of Tesla. He doesn’t even care that they cost more than the Lithium Ion cells he’s been using; he wants to have every one of his new cars use our cells by the end of next year, AND he wants to start a program with us to swap-out all his existing fleet. I asked him about the Aluminum Ion batteries, and his reply was that he didn’t want to wait.”

“What’s that amount to on the bottom line.”

“In revenue terms, using the pricing model Larry put together with the guys in finance just for Tesla, they have about 300,000 cars on the road. If we sell them the batteries for them at $3,000 per unit, it’ll start at around $900 million a year to retrofit the existing fleet – nearly a billion, and go up from there as he ramps up production with cars that can go a thousand miles or more without needing to recharge. We’re talking about a multibillion-dollar deal, and then a couple of hundred million a year.”

“And the Apple deal?”

“Last year, Apple sold just under 217-million iPhones worldwide. Just using $100 per iPhone cell, that’d make the yearly projection around $20 billion – A YEAR, but we don’t YET have the manufacturing capacity AND we haven’t gotten into the other makers of cellphones. Of course, there are the foreign knock-offs that aren’t in those numbers.

Dave asked that Jenny set up a video conference call with Mark and Owen, and maybe Wendy, if Mark wanted her on the call. The subject was licensing and accelerating production of the new Lithium batteries.

Two hours later, Dave, JR, and Nikky sat in front of the large TV looking at the three financial backers of EneRG. Jenny sat out of sight off to the side taking notes. Dave had outlined the issues and a couple of the solutions in terms of licensing to existing manufacturers, several of whom did private label branding. He already had the firms he wanted to contract with in his mind.

Wendy spoke, “If I get a say in this, I’d tell you to start production in every place you can. So far, the EneRG cells are vaporware. You’ve got to move beyond this stage.”

Mark said, “I agree, but I’d make sure the contracts you write with anybody allow EneRG to back out with little or no penalties and consequent non-competes with competitive products.”

JR asked, “Do you think they’d even consider such a thing?”

Owen said, “You won’t know until you ask. Enough is known about our product technology and the myriad applications at this point that I bet many of those firms are trying to figure out how to get a little of the action. At least you cornered the world supply of the catalyst, so that’ll slow things down for them. The articles in the Journal, Times, Time, and Business Week make what you’re doing a real feat.”

Dave said, “What about the four domestic plants we have coming on line soon?”

Mark said, “Use them as fast as you can and as much as you can. Run them around the clock. Try to saturate the market with our products. Get the brand out there. You named it; you sell it. Move fast”

Wendy said, “Once the products are out there and performing to spec, we can consider the IPO. When people understand the full implications of this, they’ll drive the IPO into the stratosphere. Also, based on what Elon Musk told you, I’d ramp up your research on the Aluminum Ion batteries; don’t be caught out. Those will be lighter and cheaper.”

Mark said, “Agreed. So, you’ll move on this?”

Dave, JR, and Nikky all nodded and verbally agreed.

Dave said, “I need lawyers skilled in licensing deals. Can either of you help?”

Mark said, “I can lend you two more of my legal team who’re really sharp with contracts. Also, you’ve been running the operation with the finance area running like an incidental back office. You – or we – need to beef that up. There’s a person I know who’s ready for a CFO position that I’d like you to interview. I’ll arrange to have them come and see you. I’ll get the paperwork to you or they can bring it with them. I’m already sold on the person, so if you like them, get them started the next day, so to speak. Keep this search highly confidential as they have a rather privileged position where they’re currently working. Also, I don’t want you too diverted from getting products to market.”

Dave nodded at Owen and Mark, “I’ll be sure to see this person and give them a nickel tour thorough our operations. I take it you’ve both already interviewed the person.”

Owen said, “Several times over the past month. I approve, too; but I won’t insist if you find any problems – and I mean any. All of you should get into the interview act.”

Dave saluted, “Right, Bosses.” Everyone laughed and they ended the video call.

“I consider this a real pleasure to meet you David. Please call me Leslie.” She presented Dave a business card emblazoned with the Worthington Industries logo. The subtitle to her name, Leslie Dekalb, stated that she was General Counsel to Worthington Industries.

A young man passed his business card up. It read, ‘Carl Dove, Assistant General Counsel, Worthington Industries’. He was also high powered. The business suit he wore Dave guessed must have cost upwards of $4,000. The suit was also out of place in the casual EneRG workplace.

Dave passed each of them one of his EneRG business cards. He didn’t list his title on his card. If there were a question, he wanted to be able to explain that he was part of a team of people working on discovering and then getting the latest in battery technology to market. JR, Nikky’s, Larry’s, and Jenny’s cards also used no job titles.

Leslie said, “From the look on your face you were maybe expecting a man?”

Dave shook his head, “Maybe. The name Leslie is devoid of genre, but the other Leslies I know have all been men, so I arrived with that stereotype in mind. Further, no one mentioned your sex when the meeting was set. I even read your C.V., but that doesn’t say ‘his’ or ‘her’ or anything other than your various credentials - impressive, by the way. I apologize if I gave off bad vibes. There are none.”

“No need; you didn’t. It happens all the time. I walk in the room and everybody looks behind me for the ‘real’ Leslie Dekalb.” They all laughed.

“So, what do we do and where do we start with this licensing stuff? I did many contracts in my previous job and we’ve done more than a few in this one, but now we’re protecting a proprietary technology and that’s outside of my pay grade just yet.”

Leslie smiled, “Mark assigned us here for as long as we need to be to get things going. He gave us some broad parameters about licensing based on a meeting you and several others had about a few days ago.”

“And?”

“And, I’ve drafted up a licensing agreement I would like to go over with you. I’m afraid it’s a lot of legalese, but I also think it’ll work in our favor over the long run.”

Dave, JR, Leslie, and Carl spent the next two days going over the licensing agreement and various options, also running the long contracts past Larry and Nikky. Once they had something they liked, Dave got together Nat, the man who’d invented the new battery, and Maury Turner, his new VP of Manufacturing that Dave had headhunted away from General Electric. They pooled their knowledge and research about manufacturing techniques in each of the major battery companies and picked their targets. The top three were A123Systems headquartered in Livonia, Michigan; Panasonic headquartered in Osaka, Japan; and LG Chem headquartered in Seoul, South Korea.

Telephone calls were made and initial meetings set up with some of the senior executives about this new opportunity. All the companies were interested and truly excited to be talking to the small but well-known company. A few other meetings were also scheduled.

Jenny went to work arranging the schedule. She got the use of Owen Bennett’s Gulfstream 650LR corporate jet for Dave and the others to use, and the trip was arranged to start the following weekend.

On Thursday morning, Jenny informed him that Mark’s handpicked selection for the chief financial officer position was coming for a job interview starting at nine a.m. Dave had forgotten about the position, and was told he was expected to both interview the person and take them to lunch. Jenny also had the parameters of the job offer that Mark had suggested for the person and appointments with some of the others for them to interview the person before the lunch.

Dave had wanted to talk to Roy Goodman, his relatively new father-in-law and CFO of Knightsbridge Manufacturing, about the CFO position. He’d befriended the CFO at Florida Power and Light when he worked there so he wasn’t flying blind, but this would be the first time he was in a position to hire someone for that position. He also noted that he didn’t even have any significant paperwork on the person coming in. Jenny promised she’d have the resume in time for the meeting based on what she could dig up and what she could get from Mark Worthington’s office.