Arotech Corp. (ARTX) Plans to Discontinue Iron Flow Storage Project Wok
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Arotech Corporation (Nasdaq: ARTX) announced that as of August 31, 2016, it will discontinue all work on its Iron Flow Storage project. Arotech will maintain its Iron Flow Storage intellectual property for sale to a third party willing to take on the expenses of continued development.
Arotech also announced that its former Executive Chairman and current Iron Flow Storage program Chairman Robert S. Ehrlich has agreed to an early termination of his employment agreement, which is currently scheduled to extend until December 31, 2017, in exchange for a lump-sum payment. The lump-sum payment represents a future cost avoidance to Arotech of approximately $140,000 over the amount that Arotech would have had to pay under the terms of Mr. Ehrlich's current employment agreement.
"After intense internal discussion and a thorough review, we have concluded that our business requires us to make a strategic shift away from our Iron Flow Storage technology, which, while highly promising, would require too much additional capital to warrant further development," said Steven Esses, President and CEO of Arotech. "While we believe that the technology has great potential, our commitment to enhance shareholder value has led us to the conclusion that investments to further develop our organic growth efforts and strengthen our operating business in the near- to mid-term provide us with a higher return on invested capital and we cannot put additional funds into such a long-range research and development project. In the context of discontinuing this project, we have also reached an amicable separation agreement with our former CEO and current Iron Flow Storage project head Bob Ehrlich, and we thank him once again for all of his many contributions to Arotech throughout the years. Bob's personality and leadership have been inestimably valuable to us; without him, Arotech might not have survived some difficult times. We will miss Bob, and we wish him every possible success in his future endeavors."
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