Raser Spins Off Electric Vehicle Company

Raser Technologies, Inc. (OTCBB: RZTI) announced today that it has finalized a transaction with a group of private investors lead by California investor Carl E. Berg to form a new electric automotive company focused initially on trucks and SUVs for fleet customers.

According to Raser, Berg has strategic holdings in a leading lithium ion battery company and an electric vehicle manufacturing company specializing in medium duty electric trucks and delivery vehicles. In the transaction Berg will initially capitalize the new company with $4.5 million, of which Raser will receive $2.5 million in cash; $1.5 million was paid at closing and the remainder to be paid by December 20, 2010. The balance of $4.5 million will be used as working capital for the new company.

The name of the new company was not announced.

“We have been working on separating the automotive and renewable energy segments, and believe that this will allow both businesses to operate and attract capital more efficiently,” said Kraig Higginson, Chairman of Raser Technologies. “The new company plans to begin delivering the first extended range electric trucks to fleet customers beginning the end of this year.”

In addition to cash, Raser receives a 39% interest in the new company and will retain the right to appoint one of the three members of the new company’s board of directors.

“I am very pleased with the acquisition and the opportunity for rapid growth in the electric vehicle market based on Raser’s strategic position, orders and their E-REV truck technology," Berg said. "I believe that this automotive company will offer a completely new kind of work truck to help electrify the largest segment of the automobile business and convert thousands of soft orders into deliveries over the next few years.”

Until now, Raser has split its focus between developing geothermal power projects and commercializing a proprietary electric drive technology called Symetron.

In June, Raser signed a Memorandum of Understanding (MOU) with Korea’s Hyundai Heavy Industries (HHI) for the joint development of renewable energy projects and commercial production of electric trucks. Today’s announcement gave no indication as to how this arrangement may be affected.

Raser is one of many green stocks that has struggled to regain market confidence after the financial collapse of 2008. Last month, the company was forced off the NYSE when its share price fell below continued listing standards..