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Abakan Inc., which develops, manufactures and markets advanced coatings and metal formulations, announced today that it has increased its ownership position in its majority owned subsidiary, MesoCoat Inc., to a 87.5% direct and 89.9% direct and indirect ownership.

The increase is the result of:

• Abakan converting an additional US$ 6 200 000 that it has invested in MesoCoat to equity.
• Abakan exchanging 21% of its 40.5% ownership in Powdermet for 65.3% of Powdermet鈥檚 shares of MesoCoat.
• 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 31 August, 2014.

The price per share of the latest conversion of Abakan鈥檚 investment in MesoCoat is at a 58% premium to the last price that Abakan converted invested capital to equity.

Abakan鈥檚 long life and corrosion solutions

Abakan鈥檚 commitment to providing lowest total cost of ownership, long life wear and corrosion solutions, led by its CermaClad鈩� and PComP鈩� 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鈥檚 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 鈥淕etting 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鈥檚 announcement will strengthen our overall operations, which when combined with our world-leading technology should deliver significant results.鈥�

Powdermet

This decision to divest ownership of Powdermet, as disclosed in a 10 February 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鈥檚 initial investment in 2009.

The significant downturn in Powdermet鈥檚 traditional aerospace and defense contracting business, and the need to reinvigorate Powdermet鈥檚 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鈥檚 technologies and Powdermet鈥檚 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 鈥淚 am very excited about MesoCoat鈥檚 transition to becoming a major commercial provider, which is the realisation of my long term vision 鈥渢o bring the benefits of advanced materials to the world. I fully support Mr. Goss and believe he is exactly what the organisation needs at this time. We have an exceptional team, and I look forward to the continued advancement and expansion of MesoCoat鈥檚 revolutionary nanocomposites and large area cladding product portfolios for years to come.鈥�

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