E-Power Inc. (NASDAQ:EPOW) shares gained roughly 6% on Thursday following the announcement of a memorandum of understanding with Kehui International Ltd to form a joint venture in the United States.
The venture, to be named E-Power Grid Inc. USA, is slated to focus on microgrids serving AIDC, power equipment and power automation applications. Under the agreement, E-Power will be the majority owner, holding no less than 55% of the joint venture.
As part of the initial capitalization, E-Power will supply $1.5 million in cash to establish the new entity. Kehui International will contribute its patents for what the agreement describes as a "Synchronous Constant Frequency Microgrid" along with ongoing technical support. The monetary valuation of those patents is to be set by a third-party appraisal agency, according to the memorandum.
The joint venture will receive exclusive rights to employ the contributed patent technology within the United States and Canada. The memorandum also incorporates performance milestones designed to preserve long-term access to the patents: the new company must reach $3 million in cumulative sales within the first three years to maintain those rights.
To move the arrangement into effect, both firms have agreed to form a joint task force within 30 days. That team will work to complete corporate registration, arrange the third-party patent appraisals and execute any necessary capital transfers to fund the venture.
The memorandum of understanding outlines ownership percentages, the initial capital contribution, the nature of the intellectual property contribution, the geographic scope of exclusive rights and specific sales thresholds tied to patent retention. It also sets a near-term timeline for administrative and financial steps needed to operationalize the venture.
The agreement leaves the patent valuation to an independent appraiser and conditions long-term patent retention on meeting the stated sales target, creating defined checkpoints both for governance and commercial performance as the venture is established.
Contextual note: The information in this report reflects the terms described in the memorandum and the actions both companies have committed to in that agreement. Where the memorandum specifies timelines, ownership minimums, cash contributions, intellectual property arrangements and sales milestones, those items are reported here as stated.