SALT LAKE CITY--(BUSINESS WIRE)--ZAGG Inc. (NASDAQ: ZAGG) (www.ZAGG.com) announces the closing of a $7 million Series B Preferred Stock financing for HzO, Inc. ("HzO"), 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.
About ZAGG, Inc.
ZAGG® is a market leader in providing innovative consumer products like films, skins, audio and power solutions that protect, personalize, and enhance the mobile experience. ZAGG's products are distributed worldwide with popular, award-winning brands such as the invisibleSHIELD®, ZAGGskins™, ZAGGsparq™, ZAGGbuds™ and ZAGG LEATHERskins™. In June 2011, ZAGG acquired iFrogz, a privately owned company that develops and markets mobile device cases and audio products in the value-priced, lifestyle sector, with an emphasis on design and creativity. The invisibleSHIELD, ZAGG's patented flagship product, is the original thin film full-body protector, and is available in over 5,000 precision pre-cut designs with a lifetime replacement warranty. ZAGG products are available online at ZAGG.com and in most major retailers. For more product or investor information please visit the Company's web site at www.ZAGG.com.
About Harris and Harris Group
Harris & Harris Group is a publicly traded venture capital company that invests in nanotechnology and microsystems. Detailed information about Harris & Harris Group and its holdings can be found on its website at www.HHVC.com.
About Prudence Holdings, Inc.
Prudence Holdings, Inc. is a private holding company that seeks opportunistic investments with long term value across industry sectors and capital structures and makes both control and non-control investments. Prudence Holdings, and its affiliated entities, focuses on partnering with experienced management teams, identifying specific market niches and reacting quickly to special situations. The principals at Prudence Holdings have made prior investments in the consumer, retail, automotive, industrial and energy sectors.
About Pike Capital Partners
Pike Capital Partners, LP is a private investment partnership based in New York City. The fund makes investments in both public and private markets, across all industries.