Wasion Meter Group Hunan Werko USCL Investment Transaction

Wasion Meter Group is China’s largest utility power meter manufacturing firm and one of the largest worldwide. Wasion’s website is at: http://www.wasion.com/en/

On May 7, 2006 Tom Tamarkin and Sima Toledano of USCL made a business presentation to the Wasion Meter Group, Hunan Werko Power Meter Division in Changsha, China. The PowerPoint presentation was made in English with a local translator providing a complete translation of each slide into Chinese.
Mr.Ji Wei , Chairman Wasion Meter Group center rear standing, Ms. Cherry Lu, Chinese business consultant, Sima Toledano, USCL, Emily Tamarkin, USCL Sitting Mr. Liao Yizhou General Manager, Werko and Tom Tamarkin, President USCL signing MOU.
On May 9, 2006 USCL and the Wasion Meter Group, Hunan Werko Power Meter Division (hereafter referred to as Werko) entered into an investment Memorandum of Understanding wherein Werko agreed to invest $3 million USD cash and $1,000,000 USD in meter design engineering services in exchange for common shares of USCL valued at $1.50 per share. The MOU called for a $500,000 USD cash investment to be made into USCL in exchange for 333,000 shares of stock within 30 days from May 9, 2006. The balance of the investment would be made pursuant to contracts between the parties within 60 days thereafter. USCL received a wire transfer from Hong Kong non May 25, 2006 in the amount of $500,000 pursuant to the Memorandum of Understanding signed May 6, 2006 a copy of which is linked above.

Wasion Meter group
Wasion meter design group in Changsha, China with Tom Tamarkin front center sitting and Dr. Victor Kolesnichenko center rear standing, July 2006
In July 2006 Tom Tamarkin and Dr. Victor Kolesnichenko, USCL’s chief meter design engineer, spent several days in Changsha, China in engineering planning meetings.

In September 2006 Werko sent a team of engineers as well as the VP Engineering to USCL’s Sacramento, California offices and USCL arranged for the Werko team to tour Southern California Edison’s power meter certification Laboratory and meet with SCE senior officials involved in the meter and AMI RFI-RFP process.

The plan was for Wasion Meter Group to augment USCL’s development team to provide a complete meter based on the USCL DM-06 meter specification it wrote for Southern California. It was further anticipated that Wasion would build one meter manufacturing line in its new facility dedicated to the ANSI style (round 240-120 Volt 60 HZ) meters and the combined USCL Wasion team would submit the product to SCE for evaluation.

Dinner at Wasion
Rear of table, L to R Tom Tamarkin, Ji Wei, Chairman Wasion Meter Group, Dr. Victor Kolesnichenko. Changsha China, July 2006
In late September 2006 USCL translated its entire business plan and its related financial section into Chinese so that Werko would have a solid understanding of USCL’s business, status, and strategic planning.

Metering & Smart Energy International published an article regarding the USCL – Hunan Werko Meter Group transaction on 5 September 2006

In October 2006 Werko declined to fund the balance of the $3.5 million transaction. Sima Toledano and Tom Tamarkin traveled to Changsha, China to discuss the matter. Werko indicated their decline to complete the transaction was based on:
  • The competitive bidding nature of the U.S. power meter market.
  • The extremely long sales cycles with U.S. utilities.
  • The regulated nature of the U.S. utility marketplace.
  • The steep engineering learning curve associated with the understanding of the U.S. ANSI meter designs and the associated U.S. 3 phase 240 Volt – 120 Volt 60 Hertz power distribution system.
  • The large capital expenses associated with the manufacturing line of ANSI meters which are only used in North America.
  • The high multimillion USD costs associated with the ANSI testing and certification of the meters required before they could be sold in the U.S.
  • The high cost associated with the FCC type approvals for the meters WAN and LAN radio transceivers.
Therefore it was agreed that USCL would issue Werko a stock certificate for 333,000 shares of USCL common stock in exchange for the $500,000 USCL received from Wasion Meter Group in May 2006. Hunan Werko is a USCL shareholder.

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