MIAMI, June 2, 2014 (GLOBE NEWSWIRE) -- Abakan Inc. (OTCQB:ABKI) ("Abakan"), an emerging leader in the advanced coatings and metal formulations markets, today announced that it has increased its ownership position in its majority owned subsidiary, MesoCoat Inc. ("MesoCoat"), to a 87.5% direct and 89.9% direct and indirect ownership. The increase is the result of: a) Abakan converting an additional $6,200,000 that it has invested in MesoCoat to equity; b) Abakan exchanging 21.0% of its 40.5% ownership in Powdermet for 65.3% of Powdermet's shares of MesoCoat; and c) by issuing 2,000,000 restricted shares of Abakan to Powdermet, Abakan intends to acquire those remaining shares of MesoCoat held by Powdermet in exchange for those remaining shares of Powdermet which it holds and the issuance of additional shares of Abakan, to the extent necessary, on receipt of independent business valuations of MesoCoat and Powdermet on or before August 31, 2014.
The price per share of the latest conversion of Abakan's investment in MesoCoat is at a 58% premium to the last price that Abakan converted invested capital to equity.
Abakan's commitment to providing lowest total cost of ownership, long life wear and corrosion solutions, led by its CermaClad™ and PComP™ product platforms, is clearly demonstrated by its decision to focus on near term commercial applications ahead of diverse contract R&D activities.
Mr. Robert Miller, Abakan's CEO, announced that Abakan director, Stephen Goss, will replace Andrew Sherman as CEO of MesoCoat effective immediately. Mr. Goss brings operational discipline and commercial focus, in a shift away from the technology development focus to commercial expansion, which transition will continue to be supported by Mr. Sherman.
Mr. Goss stated "Getting our important products to market is the focus of our immediate efforts at MesoCoat. Our products are necessary to meet the ever expanding demand for downtime reducing cladding and coating materials in connection with corrosion and wear protection for oil and gas activities, mining concerns, metal processing, and eventually infrastructure applications. With our renewed focus on manufacturing scale-up, cost reduction, and quality control, we believe that our disruptive CermaClad™ products will be ready for market in the near term, joining our PComP™ product family that has been accepted in the market and where demand currently outstrips our ability to supply. Our decision to focus on MesoCoat in connection with today's announcement will strengthen our overall operations, which when combined with our world-leading technology should deliver significant results."
This decision to divest our ownership of Powdermet, as disclosed in a February 10, 2014, 8K disclosure, was mutually agreed upon by the Boards of Abakan, MesoCoat and Powdermet, and is an acceleration of the staged acquisition planned on Abakan's initial investment in 2009. The significant downturn in Powdermet's traditional aerospace and defense contracting business, and the need to reinvigorate Powdermet's technology platforms, in order to diversify its client base into new industries in the post-government-sequestration environment caused all parties to rethink their respective timelines. A mutual agreement was reached that Mr. Sherman, the founder, CEO, and technology leader of both MesoCoat and Powdermet was no longer in a position to dedicate the time and effort needed to effectively manage both the commercial deployment of MesoCoat's technologies and Powdermet's transition. Mr. Sherman will remain in a technical role, while Mr. Goss will provide the focus and disciplined management needed for near term profitability and commercial success.
Mr. Sherman stated "I am very excited about MesoCoat's transition to becoming a major commercial provider, which is the realization of my long term vision "to bring the benefits of advanced materials to the world". I fully support Mr. Goss and believe he is exactly what the organization needs at this time. We have an exceptional team, and a look forward to the continued advancement and expansion of MesoCoat's revolutionary nanocomposites and large area cladding product portfolios for years to come."
About Abakan Inc.
Abakan develops, manufactures, and markets advanced nanocomposite materials, innovative fabricated metal products and highly engineered metal composites for applications in the oil and gas, petrochemical, mining, aerospace and defense, energy, infrastructure and processing industries. Abakan's technology portfolio currently includes high-speed, large-area metal cladding technology; long-life nanocomposite anti-corrosion and wear coating materials. Abakan's products have demonstrated longer life, higher productivity and extremely high strength-to-weight ratios compared to competing technologies. The Abakan group of companies has been honored by The Wall Street Journal as the #1 Manufacturing Innovation across the globe, by Pipeline Industries Guild as the Top Subsea Pipeline Technology, by Forbes as the #1 Most Promising Material Science Company in the United States, by American Metals Market with the Steel Excellence Award, by Inc. 500 as one of the Fastest Growing Manufacturing Company in the U.S., and has received numerous other trade, industry and technology awards including five R&D 100 Awards and a Technology Innovation Award from the National Institute of Standards and Technology. Over $50 million has been invested in product development and testing by federal agencies, national labs and Abakan in order to deliver products that offer improved performance over the current state of art. Abakan has successfully introduced its metal coatings for metal asset protection and life extension in the oil and gas and mining industries, and is currently focusing on the scale-up and commercialization of its highly disruptive metal cladding products for the oil and gas, oil sands, and mining industries. Abakan currently operates from multiple locations in United States, and intends to expand global operations in North America, Asia and South America.
A number of statements contained in this press release are forward-looking statements. These forward looking statements involve a number of risks and uncertainties including technological obsolescence, market acceptance of future products, competitive market conditions, and the sufficiency of capital resources. The actual results Abakan may achieve could differ materially from any forward-looking statements due to such risks and uncertainties. Abakan encourages the public to read the information provided here in conjunction with its most recent filings on Form 10-K and Form 10-Q. Abakan's public filings may be viewed at www.sec.gov.