An amateur's comments on trading in EEEI today (while not making a
big deal about what happens on any one day with one stock -- and while
acknowledging that anything could happen tomorrow):
EEEI announced its partnership with CalCars at 9:10 AM EST. The
stock then rose rapidly from its previous close of $2.98 to $4.60 at 12:10.
Then the company made its second announcement of the day -- an
investment by In-Q-Tel,and its (welcome) plans to use its bi-polar
technology in Li-Ion batteries as well as Ni-Mh. After rising as high as
$5.23, it closed at $4.45 (below its mid-day price), up almost 50% on 40x
normal daily volume.
Despite the dual announcements, it looks like most of the "pop"
came from the Calcars announcement. We interpret this as a validation point
-- from at least some investors -- for the company's recognition of the
potential market for plug-in hybrids.


http://www.smartmoney.com/onedaywonder/index.cfm?story=20051020
(One-Day Wonder is the name of the column, about rapidly rising stocks)

Rocky Mountain Hybrid
By Lawrence Carrel Published: October 20, 2005

SHOULD INVESTORS BELIEVE the hybrid hype?

Shares of Electro Energy (EEEI) surged 49% to $4.45 Thursday after the
battery maker agreed to design a prototype battery pack that could be used
to power a Toyota Prius. The agreement, which involves no payment to the
company, was inked with the California Cars Initiative, or CalCars, a
nonprofit group that's trying to create a market for plug-in hybrid cars.
Toyota Motor (TM), the manufacturer of the Prius, has no connection to the
deal.

"We have no dealings with Electro Energy," says Nancy Hubbell, a
spokeswoman for Toyota. "And the chances of that happening are minimal.
When it comes to the development of our cars, that is done in-house. We
have engineers in Japan developing our hybrid systems. And our batteries
come from Panasonic. It is one of our business partners, and that is a
long-standing relationship."

Though Electro Energy didn't claim any relationship with Toyota in its
press release, it's not surprising that it wants to connect its name to the
wildly popular Prius. With gasoline prices so high, the Prius, introduced
in 1997, is the best-selling hybrid in the world. Toyota expects this year
to sell more than double the 50,000 vehicles that it sold in 2004. The
Japanese auto maker projects its hybrid sales will hit a million vehicles
by 2010.

Electro Energy, based in Danbury, Conn., said it plans to develop a battery
that can be retrofitted into a Prius. The goal is for the retrofitted
battery to provide enough power during short trips so that the Prius engine
doesn't need to tap its gas reserves. Hybrids have engines that use both
gas and electricity. As a result the vehicles are more fuel-efficient and
less harmful to the environment than traditional internal combustion
engines. CalCars, the nonprofit partner, sees this as a way to promote the
commercial use and mass production of plug-in hybrid electric vehicles.

"The long-term objective would be to commercialize our product and sell it
to auto makers as a component of their cars," says Audra Mace, Electro
Energy's chief financial officer. "We don't currently have manufacturing
capabilities, but we have announced intent to acquire manufacturing
capabilities."

Added Felix Kramer, who founded CalCars in 2002: "We're not paying Electro
Energy anything. It's a joint development project. We don't have a timeline
for when it will be ready. When we have a vehicle, we will make it available."

That's not welcome news for Electro Energy. With a major customer filing
for Chapter 11 bankruptcy protection, Electro Energy's revenues plunged 48%
to $1.8 million for the six months ended June 30. This resulted in a net
loss of $1.9 million, compared with the net loss of $420,004 for the first
half of 2004.

Founded in 1992, Electro Energy develops high-powered, rechargeable bipolar
nickel-metal hydride batteries for a wide range of applications. It
supplies nickel cadmium batteries and components for satellites, aircraft
and other specialty applications. The Pentagon and the Department of Energy
have purchased its research-and-development services.

Adding a wrinkle to the frenetic trading in Electro Energy's shares on
Thursday was the midday announcement that In-Q-Tel, a private nonprofit
venture group established by the Central Intelligence Agency, had boosted
its stake in Electro Energy. On Monday, In-Q-Tel agreed to purchase 241,692
common shares of Electro Energy, plus warrants to buy an additional 75,829
shares at an exercise price of $3.11 per share, for $800,000. The money
will be paid out over 14 months as the company achieves certain development
milestones. Electro Energy's public float is just 8.4 million shares, with
about 50% of the stock held by insiders.

"As a Securities and Exchange Commission registrant, we have an obligation
to report a material event within four business days," says CFO Mace. "And
we have complied with that."

In-Q-Tel was formed by the CIA to invest in technologies that could
potentially benefit national security. In yet a third press release,
Electro Energy said it reached an agreement with In-Q-Tel to develop
advanced rechargeable bipolar lithium ion batteries. The company didn't
specify what the batteries would be used for, and no payments will be made
under the development pact. Work will be done at Electro Energy's battery
manufacturing facility in Colorado Springs, Colo.

Quote:
"There are a lot of groups developing plug-in hybrids," says Toyota
spokeswoman Hubbell. "It's like hot-roders from the 1950s. And the current
generation are technology hot-roders who want to supe up cars like the
Prius — not with tail fins, but technology and hardware like advanced
battery packs. That is separate from our company, but we realize there is a
lot of passion for that."


Electro Energy Inc. (EEEI)
Share price as of Wednesday's close: $2.98
Share price now: $4.45
Change: 49.3%
Volume: 4.0 million shares, daily average 96,700 shares
Last time this high: Sept. 6, 2005
52-week high: $14.50
52-week low: $2.75
Forward P/E before announcement: n/a
Forward P/E after announcement: n/a

-- -- -- -- -- -- -- -- -- -- -- --
Felix Kramer fkramer@...
Founder California Cars Initiative
http://www.calcars.org
http://groups.yahoo.com/group/calcars-news
http://groups.yahoo.com/group/priusplus
http://www.hybridcars.com/blogs/power
-- -- -- -- -- -- -- -- -- -- -- --